WATERLOO, N.Y. — It’s one thing to succeed in growing organic grain. It’s an entirely other matter to market and sell it. That’s why Heath M. Dewey, agricultural market reporter with USDA Agricultural Marketing Service in Greeley, Colorado, presented “Understanding Organic Market Categories” at the recent New York Certified Organic meeting.
Dewey explained the information the USDA has to collect from the individual reporting the trade so it can be put in its corresponding category on the report. FOB Farm Gate, or free on board, refers to thresher run grain with no freight, commissions or handling charges included. It can be either food or feed grade. The information also includes price per unit of measure.
“Most of the commodities on the report are in the format of dollars per bushel,” he said. “Soybean meal is reported in dollars per short ton and soybean oil is in dollars per pound.”
Dewey also spoke on grower bids.
“They represent the price willing buyers are offering for feed and food grade organic grain during the reporting period,” Dewey said. “Willing buyers must be in the market to submit a bid.”
Dewey said that the prices will be reported in a spread format and no average price is published. The bids can be reported either FOB or delivered elevator or warehouse.
He then said that the grower spot market represents a transaction that occurs directly between the grower or marketing agent and a buyer or broker.
“When receiving trades from a marketing agent, the price reported reflects the net amount of money paid to the grower,” Dewey said.
Any commodity bought or sold during the reporting period that is received within 14 days of the agreed transaction is considered a spot market trade.
The categories include food or feed, FOB farm gate and delivered elevator or warehouse.
“The grower forward contract is a transaction that occurs directly between a grower or marketing agent and a buyer (or) broker,” Dewey said. “The commodity will be received by the purchaser more than 14 days from the transaction origination date. Only contracts procured during the reporting period will be published.”
He added that the details required to publish the trade include whether it’s food or feed grade, FOB farm gate or delivered elevator or warehouse, volume, cost per unit of measure and delivery period.
Dewey also described the dealer spot market as a transaction that occurs between a dealer or broker and an end user during the reporting period.
“Depending on the commodity, this will include thresher run, cleaned and/or processed,” Dewey said.
The details required to publish the trade include whether it’s food or feed, FOB farm gate or delivered to the end user, volume and cost per unit of measure.
The dealer forward contract transaction happens between a dealer or broker and an end user during the reporting period, according to Dewey.
“The commodity will be received by the purchaser more than 14 days from the transaction origination date,” he said. “Only contracts procured during the reporting period will be published.”
With organic feedstuffs, Dewey said that the transaction occurs between a grower and buyer.
The information is gathered from Market News hay reports that were published during the reporting period and gathered directly from growers.
“The trade details they’re required to publish include hay type, package, quality, volume by tons, price per unit of measure, hay origin and whether it’s FOB or delivered,” Dewey said.
Dewey listed USDA organic reports, including those referring to livestock, poultry and grain as Bi-weekly National Organic Grain and Feedstuffs Report, Bi-weekly Midwest Organic Grain and Feedstuffs Report, and Organic Poultry and Eggs.
Dairymen can look at Market Overview, Retail Overview, Fluid Overview and Bi-weekly dairy Organic Report. Growers of specialty crops can check National Fruit and Vegetable Organic Summary and cotton growers can refer to annual Organic Cotton Market Report. Those who trade in retail organic can refer to National Retail Report local and organic and conventional, and Retail Summarized Dataset.
Import of organic corn went down to 6.4 million bushels in 2019 from 8.6 million in 2018, according to the USDA FAS GATS annual organic corn import totals. In the past seven years, 2016 represented the highest year of corn imports, 21.6 million
Dewey said that the sources of organic corn in 2019 included Argentina (69%), Canada (11%), Brazil (8%), Romania (7%) and Mexico (5%).
Organic soybeans followed a somewhat similar pattern with 9.9 million bushels in 2019, compared with 12 million in 2018, and a high peak in 2017 with 16 million, the highest level in the past nine years.
The countries of origin in 2019 include Argentina (33%), India (30%), Ukraine (15%), Russia (8%), Canada and Kazakhstan (5% each), Moldova (2%) and at 1% or less, Uruguay, Mexico, Brazil, Spain, Turkey, China, Togo and Germany.
Imported organic durum wheat also peaked in 2017 with 1.3 million bushels, decreased to 809,616 in 2018 and rebounded in 2019 with 1.1 million. Argentina represents 54% of important organic durum wheat and Canada represents 46%.