Organic Grain Marketers Struggle to Fill Their Demand -

There aren't a lot of conventional producers willing to make the organic switch, despite premiums

By Peter Reschke, Ontario Farmer staff

What kind of changes would you be willing to make in your operation if it meant getting $700/tonne for your soybeans next season?

How about using only mechanical weed control? No commercial fertilizer? Submitting your farming practices to a third-part audit?

If you're ready to turn the page and read something else, you're like most other conventional crop producers. And that is frustrating Ontario's organic grain marketers. Hampered by what they call a chronic shortage of all organic grains, men like Tom Manley and Roger Rivest are increasingly reaching out to conventional growers. But they're not having a lot of success.

Rivest, of Great Lakes Organic Inc. at Petrolia, says he is currently sourcing supply from 25 U.S. states and four Canadian provinces and he's nowhere close to meeting the demands of this growing market. Manley, who runs Homestead Organics at Berwick, says the lack of supply is hampering his company's growth. "I'm not able to compete in some markets. We're not even fully utilizing our own infrastructure."

In the case of soybeans, Rivest estimates there are currently about 20,000 acres of organic soys grown in this province. "I can use all of that myself," he says.

Manley says he has been forced to source soybeans from China and is bringing in railroad cars full of corn from the U.S.

All that because more farmers in Ontario are reluctant to make a commitment to organic agriculture.

Rivest says he expects growth in the near future will come from existing organic producers. "These farmers know what they're doing. They're getting a little more aggressive and they're ready to expand their acreage."

He isn't optimistic about reaching the conventional grower. "It won't be the older farmers," he says. "They don't want to spend that amount of time on the tractor anymore. If anything, it will be the guys 45 years and younger."

Manley says he has attended plenty of farm shows and conventions in an effort to attract conventional growers. Low commodity prices don't seem to be a catalyst. "I thought it would happen a few years ago when corn hit $100/tonne," he says. "But they're not converting."

OMAF organic production lead Hugh Martin has witnessed the same reluctance. "I find it surprising, considering prices are more than double what they are for conventional commodities."

Homestead Organics is currently contracting new crop corn for 2005 at $270/tonne, food-grade soys at $700/t, feed soybeans at $650, feed wheat at $230, and oats at $200/tonne.

If that's not enough, what will it take to initiate a shift? Both Manley and Rivest point to the provincial government. "The government has to get involved in promoting this to other farmers," Manley says. Telling producers that this is a legitimate long-term opportunity would be a good beginning, he says.

Government is currently spending money promoting other opportunities, like agri-food exports and agritourism, Manley says. Some of those resources could also be invested in promoting organic agriculture.

Rivest says he has an easier time accessing funding in Quebec or Michigan than in Ontario. He would also like to see support through crop insurance and see some of the soybean checkoff dollars, some of which are paid in by organic producers, be used for organic research and promotion.

The problem, Manley says, is that government is side-stepping the issue because it views acceptance of organic production as a criticism of conventional methods. "You have to get over that," he says. "Just because you promote organics doesn't mean the rest of agriculture is bad."

THERE IS NO question consumer demand for organic products is increasing rapidly. Rivest says some of that has to do with the way supermarkets display organics. There has been a shift from setting aside specific aisles to integrating organic products among the rest of the brands. That has increased consumption, Rivest says.

Consumers don't want to be seen shopping in an "organic" aisle. But they'll readily pick the organic apple juice, for example, if it's standing right beside the other brands, he says.

As younger consumers raise their children on organic food, that preference is passed on to the next generation, he says. "A lot of dynamics are changing to create this demand."

It has also changed organic marketing. Rivest says just three years ago 90 per cent of organic commodities were exported as raw materials of processed products. Now there's a 50:50 split between export and domestic usage. "Within the next couple of years it will be 80 per cent domestic usage," he predicts.

So, why are conventional crop producers so reluctant to tap into this market? For one thing, it requires a long-term commitment to achieve certification and begin selling into the organic market. This is not a niche market opportunity, Manley cautions. It's a complete change of farming philosophy. "You can't just get in for the short term and get back out."

At the same time, he says the change isn't as costly or daunting as it's often portrayed. Step one is to develop a transition plan, he says. If you've got 300 acres, divide them into thirds and "do one field at a time. Start with your best land."

You can have a field certified organic within 36 months of the last chemical application, Manley says. So, if the last time you sprayed or applied fertilizer was in July, the clock is already ticking. "You now need two seasons of organic management."

One concern for growers is the cost associated with the transition period - lower yields and no premium prices. Manley agrees there is a yield decline but it is temporary and often offset by the lower input costs. In fact, he says, growers who adopt some of the organic crop production principles while still marketing into the conventional commodity market often find they're making more money than they did before.

Some organic marketers are also trying to ease the pain of transition by offering some premium contracts during the transition period. Rivest, for example, says he is offering spot market prices somewhere between conventional and organic rates for transition crops. For transition soybeans, he is currently paying $10.50 a bushel.

Labour concerns are also a deterrent for some but Manley says that hurdle is also over-rated. "All you're doing is spending more time on a tractor seat (to do mechanical weed control). Is that worth two times the price you're now getting? I think it is."

And consider the fact that equipment is also evolving, Manley says. Organic farmers today use larger, lighter equipment, like 30-foot wide tine cultivators. "You can cover a lot of area fairly quickly with a light tractor."

Martin says a good source of information for anyone thinking about making the switch is to go to the OMAF organics web site. "I tell them to go to Google and type in 'OMAF organic crops'." That opens the door to variety of resources from fact sheets and marketing information to certifying bodies and grower organizations. Joining one of the latter, such as the Ecological Farmers' Association of Ontario, can be an invaluable source of information for the beginner, Martin says.

Martin says success "depends on the individual. Some people have no problem doing it."

But it does take a lot of commitment. "You can't just seed the crop and forget it until fall," Martin says. "It takes more time and learning."

"It's a lifetime choice."

This article first appeared in the Tuesday, February 8, 2005 issue of Ontario Farmer
© Copyright 2005, Sun Media Corporation. It is reproduced here with permission.