Organic Marketing Question

[hobbyfrmr]

It would seem like the organic markets are in the doldrums. The biggest and best oat miller Grain Millers does not have an old crop bid and no new crop bid for milling oats. They claim new organic acres, plenty of supply because they are bought ahead for 8 months. This is the first time in 13 years I have seen this. Has the organic market “matured” and adopted the conventional market buying strategies?
I suspect they have imported organic oats from Eurpoe/Black Sea but I cannot confirm this.
Chicago corn is down keeping organic barley prices suppressed as well.
Strange times.

[pourfarmer]

It would seem like the organic markets are in the doldrums. The biggest and best oat miller Grain Millers does not have an old crop bid and no new crop bid for milling oats. They claim new organic acres, plenty of supply because they are bought ahead for 8 months. This is the first time in 13 years I have seen this. Has the organic market “matured” and adopted the conventional market buying strategies?
I suspect they have imported organic oats from Eurpoe/Black Sea but I cannot confirm this.
Chicago corn is down keeping organic barley prices suppressed as well.
Strange times.

Worse than 2008. No wheat bids, no pea bids. Flax is the only thing moving it seems.

Grain Millers new crop oat contracts filled up in less than 48 hours!

Rumour is that a certain grain co is bringing in black sea grain in large scale, just a rumour but who knows.

[GDR]

Could it be as more and more consumers have their paychecks squeezed making that choice becomes harder? What I have found over the years is that consumers get excited about organic, local, farm raised etc whatever and are willing to pay a premium initially but overtime revert back to the mainstream ways partly because of economics and partly because it is usually just easier.

Or is Hobbyfarmer just planting the seed in our minds to protect his market share!

[GDR]

Out of curiosity do you guys think that selling into the conventional markets you would still be profitable with your business model or do you actually require a premium to be sustainable?

[hobbyfrmr]

Could it be as more and more consumers have their paychecks squeezed making that choice becomes harder? What I have found over the years is that consumers get excited about organic, local, farm raised etc whatever and are willing to pay a premium initially but overtime revert back to the mainstream ways partly because of economics and partly because it is usually just easier.

Or is Hobbyfarmer just planting the seed in our minds to protect his market share!

I would say that is part of the problem. There are enough organic products on the store shelves now that it is a real industry. With the Canadian economy eroding it does not surprise me that consumers are going to become price sensitive in all areas. I can not blame them for sure.

[hobbyfrmr]

Out of curiosity do you guys think that selling into the conventional markets you would still be profitable with your business model or do you actually require a premium to be sustainable?

My math suggests I could get by with oats but probably not peas or feed barley. Its hard to say at this time.
I dont like the look of the industry at this time. I purposely left the conventional market to differentiate and financially gain. Markets do mature and volatility is subdued over time. I just wanted to make sure I am not missing something.

[AlbertaFarmer5]

My wife buys a lot of organic products, against my better judgement. Lately she tells me that they are often the same price or even cheaper than the conventional equivalent. So without a premium in the grocery store, there can't be much room left for a premium at the farmers bin, especially when you add in much longer distance trucking, regulations, segregation, testing, cleaning etc.

If I had continued with my planned organic transition, I would be marketing my first organic crop from a couple of quarters right now, and would be preparing to seed most of the farm by this spring, so I may have made the right choice by postponing a transition.

The imported products is one reason I am scared of that market. I wouldn't want to be competing with overseas markets where regulations are meant to be bribed away, and selling products that are indistinguishable from their conventional competitors (With the exception of preharvest chemicals), so basically anything could be passed off as organic coming from less honest parts of the world, undercutting local honest producers, with no way to prove its validity.

[Taiga]

I started the process but gave up, didn’t feel like paying annual membership fees to be ‘certified’ as I have no local market (buyers) so any premium was to be lost through extra transport costs. Membership was just another parasitic loss from my bank account. I can be certified anytime though if conditions were to change.

[pourfarmer]

I started the process but gave up, didn’t feel like paying annual membership fees to be ‘certified’ as I have no local market (buyers) so any premium was to be lost through extra transport costs. Membership was just another parasitic loss from my bank account. I can be certified anytime though if conditions were to change.

FWIW, my grain travels over 500km to my primary market.