The organic livestock trade in North America has been importing feedgrains for the last few years from countries such as China, India and Bulgaria to supplement a shortage in the United States and Canada.
That buying practice may soon decelerate because it could be harming the industry’s reputation and some buyers aren’t happy with the quality of the imported product, says an organic inspector in Manitoba.
“I’m anticipating that we’re going to see imports drop dramatically,” said Stuart McMillan, secretary with the International Organic Inspectors Association.
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“I wouldn’t be surprised to see if they’ve already dropped, in the past two months.”
The validity of organic feed imports to supply production of organic milk or eggs in North America became a significant story in May when the Washington Post ran a piece on imported organic corn and soy that wasn’t organic.
The Post reported on three fraudulent shipments, including 36 million pounds of soybeans that originated in Ukraine and were shipped through Turkey en route to Stockton, California.
The beans started the journey as conventional feed but miraculously earned an “organic” label during the trip, increasing the value of the shipment by $4 million.
Organic grain buyers have been importing feedgrains, mostly from Asia and Eastern Europe, for a few years because there wasn’t sufficient production in Canada and the U.S.
However, there have been concerns about the legitimacy of organic practices in China, India and Ukraine, which is often ranked as the most corrupt country in Europe.
The Washington Post story shone a bright light on the issue, McMillan said.
“It was already being investigated and worked on at the level of the justice department, the USDA and right down to (organic) certifiers,” he said.
“Our system is working as it should to address and catch potential fraudulent operators.”
The Post article focused on imports entering the U.S., but Canada also imports organic soybeans, corn and other feed ingredients.
The federal government doesn’t keep data on imports of organic feed, so it’s difficult to estimate volumes.
“I know they are coming in. I don’t know how much,” Becky Lipton, executive director of Organic Alberta, said last year.
“There’s a shortage across the board in North America…. There’s a shortage of all organic grains. That includes feed and food grade.”
McMillan said importing organic feed became a necessity in 2014 and 2015 because of a significant shortfall in the U.S. and Canada.
Supplies were so tight that American growers were rejecting offers of $15 per bushel for organic corn.
“The buyers, who were supplying the feed mills, couldn’t pay enough to pull out the last few kernels kicking around in the bin,” McMillan said.
“They were pulling (organic) milling wheat out of Canada and putting it into chicken rations in the States.”
Organic buyers turned to imports, and the practice quickly became a normal part of the industry.
However, some in the organic trade are now asking questions about the quality and credibility of imported grain.
McMillan has spoken to organic livestock producers on Canada’s West Coast who were dissatisfied with imported soymeal.
“They felt (suppliers) had squeezed so much oil out it was lacking in energy. They found production differences between domestic and imported feed ingredients.”
As well, in the wake of the Post coverage, organic retailers might put more pressure on suppliers to ensure that organic milk or organic eggs are legitimately organic.
“I would say overall this (media) coverage … will strengthen domestic markets (for organic feed),” McMillan said.
Organic grain buyers now have more options because organic production in North America increased in 2016.
“Currently, right now, we are not short (organic) feedgrains,” McMillan said.
“Barring a disaster in 2017 we’ll probably have sufficient domestic supply to meet that (domestic) demand.”
Organic grain supplies, in Canada at least, should expand in the next few years because the industry has been attracting new entrants.
The number of farmers beginning the three year transition to organic jumped in 2016, so there should be more growers and additional grain production by 2019.
