Is now the right time to move to organic production?

It’s been a rough couple years for organic producers on the Prairies. They’ve been hit hard by factors largely outside their control: weather and markets.

Problems with weather are not unique to organic producers nor to the last couple years, but the recent weather problems have been unusual.

We are more used to drought than extended flooding, and we understand better how to deal with it.

No one can farm well when their fields are lakes and their weeds are cattails, except perhaps the wild rice growers.

However, for those not completely flooded, it seems that excess moisture in spring and fall hit organic producers harder than their non-organic neighbours. The land needs to dry longer after flooding before taking out the cultivator out than it does to bring out the sprayer.

Markets have also been problematic. Organic markets are still niche markets, strongly influenced by supply and demand, with little stabilizing structure. This means markets fluctuate, or in singer Katy Perry’s words,“you’re hot, then you’re cold … you’re up, then you’re down.”

Grain prices were way up in 2007. Mainstream processors and distributors were looking at entering the organic market, and production couldn’t keep up with demand. Wheat was trending upward to $30 per bushel.

In retrospect, we should have known what would happen.

We had seen flax prices skyrocket toward $50 per bu. in 2005. These kinds of prices are great for the few who can tap into them. They are terrible for market development. Buyers get scared off. By 2006, many organic flax buyers were buying product from China.

In 2008, many organic grain buyers were looking at their options. Core organic companies stockpiled against further price increases. Companies that were thinking of entering organics in a big way rethought their strategies and moved to natural. And producers, hoping to cash in on high prices, started to transition to organic. Organic producers brought more land into organic production.

On top of all this came the U.S. recession and the European economic crisis, which reduced demand. Argentina and Kazakhstan increased supply.

Organic production increased while organic demand flat-lined.

Organic grain quit moving. Some organic producers sold into conventional markets. Some held onto product far longer than was comfortable. Some dropped their organic certification.

There was a time when “falling number” was a measure of wheat quality. Now it seems to describe organic producers.

It is hard get accurate numbers, but many people are suggesting that the number of organic producers on the Prairies is down 10 to 30 percent since the peak in early 2008.

Is now the right time to get out of organics? If you’ve been biding your time, waiting to empty the bins and retire, perhaps it is.

It took a while for the glut in the market to be used up. Now we are just beginning to see prairie organic product move again at prices well above conventional. Bins are finally beginning to empty. Most buyers and brokers are cautiously optimistic.

Land prices are relatively high and rental agreements reflect those prices. Commodity and cattle prices are relatively high. It’s always good to cash out when prices are good. For those near the end of their farming years, this may be the right time.

On the other hand…

Is it the right time to go back to chemical supported farming? This year’s bumper crop, high canola prices and the ability to knock back the thistles when it’s too wet to take tillage equipment into the field may seem tempting.

But if it’s essentially an economic decision, don’t forget that it is net and not gross earnings that count. Return on an organic crop is nearly all of it. Return on conventional crops is gross, less technology fees, fertilizer costs, herbicide costs and pesticide costs.

The contamination that prevents many producers from growing organic canola still hurts, especially in a good canola year. However, in most crops, a reduction in yield is more than offset by reduced input costs and generally higher organic prices.

For many people, whether to farm organically is more than an economic decision. The farm has to make economic sense, of course, but for many it also has to make environmental sense. I’ve heard many organic producers say they would never go back.

Organic farming uses less energy, especially in terms of fossil fuels converted to nitrogen fertilizers. It also avoids the use of synthetic fertilizers, herbicides and pesticides.

This significantly reduces the amount of chemicals in the water, air and food supply. The use of green manures, composts and animal manures improves the diversity and function of life in the soil.

Perhaps it is time to get into organic farming. Let’s hope the flooding cycle has run its course. Let’s hope the shaky economic recovery stabilizes. Let’s assume that what we do makes a difference.

The time to get in may well be when others are getting out. And we may be just beginning to turn the corner toward better days for organics.

Brenda Frick, Ph. D., P. Ag. is an extension agrologist and researcher in organic agriculture. She welcomes your comments at 306-260-0663 or email organic@usask.ca.

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