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KANSAS CITY, MISSOURI, US — Steady growth and continuous demand have defined the organics market for several decades. In 2020, during the height of the COVID pandemic, total sales of organic food and non-food products garnered more than $60 billion, according to a 2021 Organic Industry Survey released by the Organic Trade Association.
But analysts from Mercaris, a market information service and online trading platform for organic and other identity-preserved commodities and ingredients, wondered how the organics market will handle current economic trends. Kellee James, founder and chief executive officer of Mercaris, and Ryan Koory, vice president of economics at Mercaris, presented their insights and outlooks during a breakout session at the Sosland Publishing Co. annual Purchasing Seminar in early June.
“Organic food sales continue to outpace conventional food sales,” Koory said, showing that organic food sales grew 9% from 2009 to 2019 compared with conventional food sales that only grew 3% over the same period.
Koory said organic food sales in the United States grew by 13% in 2020, reasoning that sales reflected consumers’ retail purchases, where consumers have greater access to and buying power for organic products, since other food opportunities, like restaurants and schools, were closed. Koory said post-pandemic consumer behavior has not reset, and organic sales continue to grow, but he and other analysts are watching consumers’ reaction to inflation strains.
Organic prices are firm. A bushel of organic corn costs $11.24, the highest price since August 2015. And organic soybeans are now at an all-time high of $39.50 per bushel. Koory said tight soybean supplies and diminished imports from India, a primary exporter of organic soybean products, was supportive of the record-setting soybean prices. He acknowledged that finding appropriate exporters was difficult due to other countries’ pesticide standards and transparency concerns.
Also, the Russian invasion of Ukraine had an impact on organic soybean supplies. Ukraine was a major exporter of organic soybeans and grains, but certifications were no longer being processed due to the war, and previously certified fields that were now littered with war debris may be in jeopardy of losing their certification status, and recertification is at least a three-year process.
US organic corn, however, verged on entering a bearish position, Koory said. He pointed toward healthy production and expanded acres along with steady year-over-year carryover supplies as potential pressures to organic corn prices. He also said organic corn farmers were considering siphoning away some acres to plant soybeans to meet increasing demand, primarily from organic poultry farmers.
But US organic wheat production needed lots of improvement before prices decline, with values currently between $17 and $21 per bushel.
“Hard red winter wheat acres have been too dry, and hard red spring wheat acres have been too wet,” Koory said.
Since Russia’s invasion of Ukraine in February, the world’s wheat supply has been thrown into question, with poorer nations facing scarcity and a potential food crisis, according to the United Nations.
Following are countries among the world’s least developed that are the most dependent on Russia and Ukraine for their annual wheat supply (2020), according to the UN Conference on Trade and Development. Nations in Africa import 44% of their wheat from Russia and Ukraine, according to the UN.
Sources: unctad.org and knoema.com/atlas.
Held every three years, VICTAM International is one of the world’s largest dedicated events for the animal feed processing industries. Co-located with VICTAM International is GRAPAS Europe, which is focused on the grain, flour and rice processing industries.
This is also the first show that is a result of the partnership between VICTAM and VIV Europe, which brings together the global feed to food industry for the production and processing of poultry meat, eggs, pork, beef, fish and dairy.
The event continues to June 2 at the Jaarbeurs exhibition grounds in Utrecht, Netherlands.
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