Organic Grain Market View
You may have seen recent press stating the Australian organic cereals industry has experienced shortages in grain. We have some challenges and with these come major opportunities.
Supply has declined while demand steadily increases
For a whole variety of reasons including succession, water access and natural attrition people have been leaving the system. However the fundamental reason why we have less growers today is because we haven’t been actively managing the funnel of new entrants into the organic system.
At the same time we have seen demand for organic cereals increase in all sectors – domestic & export and feed & milling.
Prices have increased significantly in response to higher demand.
In 2014 we saw prices double and up to triple conventional grain prices ex farm. These prices are not sustainable long term. They will eventually lead to reduced demand or an increase in imported grain products. Most processors are importing products to some degree, but it is not ideal and does not support their own milling operations.
The real market is significantly higher than our current production – so how are we going about changing that?
The good news is that there is a model that we can follow – the roadmap looks something like this:
- Optimise existing organic certified production
- Encourage and support new organic production
- Develop research and share knowledge
- Actively engage in policy to support organic production in Australia.
- Stabilise pricing and develop long term supply relationships with flexibility.
Optimise – Our certified organic properties are a precious resource – Primal Foods are actively working with people who are certified and not producing and helping them to either start producing again or using other organic producers to share farm with them. We are also encouraging producers to diversify production from strictly wheat, barley and oats to include spelt, rye, oilseeds and pulses – this diversification supports soils as well as maximises returns.
New production & support – NCO & ACO have responded to the call – first NCO and then ACO recreated grower liaison roles, resources to support growers, increase sharing of information between growers and encourage new growers to consider the benefits of organics. Both are supporting projects initiated by Primal Foods to certify new properties.
Primal Foods released a range of alternative feeds to grain this year, to enable dairy and poultry producers to manage performance with less grain. We are also seeking out, those growers who employ biodynamic principles, but are not certified organic and working through plans to gain certification and manage transition. We also identified markets for organic in-conversion grain so that new organic growers are able to achieve some premium for their grain.
Research – this is where we really need some help. We have identified previous research and will soon have a place on our website for people to access it. Ongoing research in weed control, soil development and seed selection needs to be taking place on farms and shared with all producers.
Opportunities for organic production have never looked brighter and in our view we are better placed than most other countries around the world to capitalise on these.
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