Saskatchewan Wheat Pool plans to turn its recently acquired central Saskatchewan mill into an all-organic facility have drawn support and cautious skepticism in the organic crop industry.
Earl Geddes, a market development manager with the Canadian Wheat Board, said switching Humboldt Flour Mills to specialize in organic grain ties in well with the growing overseas demand for western Canadian organic grain products.
“It’s just about to take off,” said Geddes, of Winnipeg.
The mill, located in the central Saskatchewan town of Humboldt, is expected to use about 4,000 tonnes of wheat a year to produce about 3,000 tonnes of flour products like unbleached white flour, bakers
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and whole wheat flour, wheat bran, cream of wheat and sprouting wheat.
Saskatchewan Wheat Pool executive vice-president Bruce Johnson said in a news release that converting the mill allows the company to meet customer needs in one of the most rapid growth areas in agriculture.
Geddes said while Europe has been a traditional market for organic grain sales, there is a growing market for Canadian prairie grains in Japan and the United States.
He said one problem in developing organic markets has been a lack of a larger processing facility able to offer a consistent supply and fill large orders.
“Individual farmers going into the market couldn’t put together a consistent product.”
Most buyers, he said, want pro-cessed organic products and not bulk grain, but it’s too expensive for a large mill to shut down and clean equipment to make organic products. However, a mid-sized mill dedicated to organic grain could fill the void.
Organic grain producer Ian Cushon, of Oxbow, Sask., said he hopes the mill finds new markets for Canadians.
“I know there are customers out there looking for flour products,” said Cushon, who is former head of the Organic Development Council of Saskatchewan. He said he knows of at least one large order from Michigan that couldn’t be filled because existing organic mills on the Prairies were too small.
Cushon said dealing with a larger company like Sask Pool eliminates problems of not getting paid on delivery. Some small companies did not pay producers in a reasonable time after delivery, he said. He added he will likely take advantage of the new facility, depending on the premiums paid by the mill.
But Neil Strayer, an organic producer from Moose Jaw, Sask., said organic farmers will get the best price by selling directly to processing plants in Europe or the U.S.
“With Sask Wheat Pool’s overhead we’ll find the premiums aren’t going to be great,” said Strayer, who operates Growers International Inc., a company that sells organic grain internationally and may find itself competing for organic grain with Sask Pool.
To get the best price, organic producers should create their own direct link to markets, said Strayer, who has been selling his product to Europe for almost 15 years.
International sales
Dwayne Bassendowski, senior merchandiser of organic products with Sask Pool, said dealing with a larger company can be more beneficial to farmers. The larger company has worldwide contacts and a large credit and logistics department that can put together deals, often at a lower price than smaller dealers.
Strayer, who has been a key player in developing organic crop production, particularly in Western Canada, said the pool should try harder to help farmers increase their knowledge of organic grain production rather than just operate as a grain marketer.
“The wheat pool’s attitude is build it and they will come. They haven’t done enough at a grower base. I don’t think the pool’s commitment is at the grower base.”
The pool also plans to convert its Armour Siding facility near Regina into a certified organic elevator and phase out its existing facility at Ernfold, Sask.
Sask Pool bought Humboldt Flour Mills in May.
All about certification
- There are about 625 certified organic farms in Western Canada, 70 percent of those in Saskatchewan.
- Each farm has an average 550 cultivated acres.
- There are some organically raised cattle but little demand.
- The SRC is working on a feasibility study to find markets for certified organic prairie beef.
- The Saskatchewan Research Council operates an Organic Products Information Service. Producers pay a fee to list their crops on this service and international buyers access the service to fill their orders.
- There are about 150 farmers registered on OPIS.
- About 12 traders move about 80 percent of the organic grain in Western Canada.
- Premiums paid to producers can range from 30 to 100 percent above regular grain prices. Higher premiums are paid for hard-to-grow crops like canola and pulses, which don’t compete well with weeds.
- The main crops, in order of size, are wheat, oats, barley, oilseeds and pulses.
Source: Saskatchewan Research Council
