A newsletter for our friends and
associates
January 2002
The winter cereals performed very well this year. The heavy snow cover and a quick thaw with minimal spring frost avoided winterkill. The spring cereals also faired well and the protein level was very good.
The soybeans were disappointing. We sold seed for 550 acres but only saw about 150 tonnes. The protein is lower than usual; the lack of rain has probably prevented the synthesis of protein in the soybeans. The flax crop in western Canada, a major source of protein for our feeds, is reported to be lower in protein as well. Over half the organic corn in Eastern Ontario was lost to mustard competition. The remaining crop is of good bushel weight but lower than usual in protein.
We had 2,000 acres of buckwheat under contract and only received 230 tonnes. The June plantings germinated unevenly and the hot summer blasted the flowers. However a few late plantings, around July 18th, produced over half a tonne per acre, by missing the summer heat and benefiting from a late frost.
The lovely spring gave us hope for growth in our processing volume. We had plans for a truck scale and more bin space. But as the summer advanced, we shelved our investment plans and embarked on a cost cutting exercise.
Thanks to a good winter in Eastern Ontario versus a partial crop failure in Europe and SW Ontario, we suddenly moved 300 tonnes of spelt compared to almost nothing last year. Strong demand for organic animal products has pushed feed to two thirds of our business. Our production volume is holding steady, despite a lack of local grain, because we import feed grains from other provinces and the USA.
We are past our fifth harvest already! Homestead Organics has evolved to become more than a marketer of soybeans; we are an organic farm service business. Our mission is to serve and develop organic agriculture. It is all about dedication to organic agriculture, working within the community, and serving farmers. We have a versatile offer: field crop processing & marketing, livestock feed & supplements, field and garden seed, soil amendments, groceries, and education.
Organic farmers rely on microbial activity to digest organic matter or minerals and transfer nutrients to the plants. The sudden disappearance of snow in 2001 and the absence of spring rains left the soil cold. This stalled microbial activity and delayed the release of nutrients. The three weeks of rain in May again hampered microbial activity. The cold wet soil crusted and promoted mustard. Any organic soil amendments such as minerals, compost or starter fertilizers had little effect, as the microbes were inactive.
The cereals, being cold weather crops, appreciated these conditions and the type of microbial activity characteristic of a cold spring. But the warm weather crops, corn and soybeans, are dependent on a different microbial activity. Their emergence was slow and competitiveness against weeds was reduced. The heavy rain in May promoted shallow root systems and they were then betrayed by a lack of moisture later on.
The ingredients for surviving the drought this year were: a little rain, medium clay-loam soil, lots of organic matter, excellent soil tilth, good vertical drainage, tile drainage, very healthy microbial populations, good weed prevention, and minimal dependence on mechanical weed control.
The consumer continues to demand more organic food, and retailers are responding. President's Choice introduced a broad line of processed organic foods. Medium and large retailers dedicate space to processed goods and fresh organic produce. Canadian Geographic Magazine just published a lengthy report on organic food. Organic animal products is the strongest growing segment.
The price of food soybeans was set in contracts last spring at about $575 but spot prices hit $700 or more this fall because of poor yields. The feed soybean prices for the new crop moved from the prediction of $450 last summer to $550 this fall. Spelt has been up and down. A price in 1999 of $400 to $500 promoted over-production. The glut is over as the crop faltered in Europe and SW Ontario during 2001; we are paying $350 for 11% protein. High protein bread wheat can fetch $275. The feed cereals are strong at $210 to $230, but corn is very popular, reaching $285.
These attractive prices may be misleading as they motivate farmers to convert to organic production. Prices cannot "collapse" overnight because of the 3 year transition and the mandatory crop rotation. But the poor weather for two years in a row is hiding a pent up supply. It would be a very different price picture if Canada had decent weather. Looking forward, be prepared for downward price pressures as good weather puts all the organic acres to work, as new growers enter the fold, and as developing countries learn to compete.
Thanks to a vigilant search for grains, we are able to limit the price increase to an average of only 8%, as of January 1st 2002, that is C$2 per 40kg on the popular products such as poultry grower, layer, hog feed, dairy feed, lamb creep.
Please forgive me for repeating myself. Respect your soil conditions and your crop rotation first. If you still want to know what we need, then we need almost everything, but especially feed soybeans and corn! Here is my preliminary shopping list, subject to market fluctuations: 1000 tonnes of corn, 500 tonnes of feed soybeans, 300 tonnes of food soybeans, 200 tonnes of spelt, 300 tonnes of barley, 200 tonnes of oats, 100 tonnes of feed wheat, 50 tonnes of rye, 100 tonnes of triticale, 1000 tonnes of conventional buckwheat, 200 tonnes of organic buckwheat.
Our marketing pool has been our predominant buying method, especially from those farmers who rely on our storage services. It has been working very well, providing a steady cash flow to the farmers and allowing them to participate in the market rallies over several months. But some farmers still prefer the reliability of a forward contract. It may be an attractive option in the event of good weather and a steady increase in acreage.
Therefore, Homestead Organics will diversify its marketing options for 2002. We will deliver grain to markets from a combination of three marketing options. Farmers who store their grain with us can only use the pool or the forward contract. This spring, as we move seed to your farm, remind us to review the marketing options with you.
- Join a grain pool by delivering your crop at any time. The pool is a series of quarterly payments at the average spot price of each quarter. Delivery volumes and schedules are very flexible since payments are only made on the consumed volume. So the farmer takes advantage of the average spot price over a period of time.
- Hold the crop in your storage and wait for a spot price that suits your needs. We will accept to purchase at a spot price when we like the price, we can agree with you on the payment terms, and we need the crop.
- Sign a forward contract, either before or after harvest, with a fixed price, a delivery schedule and a fixed payment schedule. Forward contracts are discretionary. We will offer prices, volumes and schedules that are competitive AND safe for us. Since feeds move steadily, we will readily entertain contracts for feed grains in safe volumes. But food grains are only contracted when we have a contracted market, such as our annual conventional buckwheat contract.
Organic standards require certified organic seed for 2003, either common or pedigree seed. We strongly support this move as organic seed production will, in the long term, reduce the risk of GMO contamination, promote organic production in other segments of agriculture, and enable the development of varieties that are better suited to organic practices. However, this will take time. In the short term, organic seed comes with limited variety options, especially in certain species such as forages and hybrid corn. As a buyer of organic grain, Homestead Organics strongly encourages farmers to use organic seed, but we will buy certified organic crops produced from almost any appropriate seed; the exceptions being specific IP programs.
As a seed retailer, we are not prepared to sell common seed for mainstream crops, even if it is organic. We offer only pedigree seed for corn, soybeans, wheat, barley, oats, and commercial forages. We do however sell organic common seed for the less popular crops of buckwheat, rye, spelt, triticale, oil radish, red clover cover crop, and timothy cover crop.
To promote organic seed production, we are presently assembling an inventory of certified organic pedigree seed for soybeans, wheat, barley and oats. They will be varieties that you are familiar with and are appropriate for Eastern Ontario. We will have the complete list ready by the end of January. There may not be enough organic seed for everyone, so advance orders are critical. Exchanges and returns are accepted early in the season as long as we can find another home for your seed lot.
Homestead Organics is a retailer for Pickseed, Advantage and Hyland seeds. From Pickseed, will have a complete selection of excellent untreated forages, either individual species or elaborate mixes. Pickseed also offers two high quality hybrid corn varieties, untreated and available all season, although advance orders are more reliable. Advantage brings us OAC Atwood, the workhorse of food grade soybeans for Eastern Ontario. Hyland offers untreated seed corn, AC Grant barley, and Bounty soybeans.
We have great news for organic gardeners, both hobbyists and market gardeners:
- 30 species of certified organic vegetable and herb seeds: small pouches at $1.99 or in larger bulk orders.
- certified organic mulches: buckwheat or spelt hulls; easy to handle, a lovely colour backdrop, and important nutrients during decay over the years. Call and ask us about our personal experience with these mulches during the drought of 2001.
- a wide selection of soil amendments, organic garden and lawn fertilizers, and foliar sprays to improve your garden production.
In our evolution as an organic farm supply business, we are responsive to customer requests for new services:
- excellent organic dried fruit, nuts, oils, and dairy products.
- Rodale magazines: Organic Gardener, Organic Life, and more.
- Organic feeding guides for a wide range of farm animals.
- pick up their day old chicks at our mill.
- rations for ducks, pheasants, and horses.