Organic Grain Marketing and Price Trends February 2020 ......2020/02/19 · Source: Organic Trade...
Transcript of Organic Grain Marketing and Price Trends February 2020 ......2020/02/19 · Source: Organic Trade...
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Organic Grain Marketing and Price TrendsFebruary 2020Jessie Bovay
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Introduction To Mercaris Organic Supply Picture Understanding Organic Demand Organic Corn and Soy Premiums Marketing Options
OVERVIEW
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Market Data Service & Trading Platform
for organic, non-GMO, and other Identity-Preserved (IP) agricultural commodities
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Organic markets are… different Thin markets
Limited risk management options
Market transparency issues
Limited organic processing and storage availability
Consumer demand
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Mercaris Data ServiceMake Informed Business Decisions
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MERCARIS DATA SERVICES
Screenshots, Mercaris Data Service Reports
Volume Weighted Average Prices Spot & Forward Food & Feed U.S. Regional Canadian
IP vs. Conventional Price Tracking Trade Volume Reports Acreage Infrastructure/Mapping Demand Analysis
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DATA SOURCINGMercaris Market Survey
Over 50 different first handlers participate weekly in the Survey, averaging 15 new data points a week
The reported bushels represent 25% of the organic bushels grown in U.S. and Canada
34 states/ provinces are represented in the Survey
Six years of historical archives
Commodities reported:
Organic cornOrganic barleyOrganic soybeans
Organic soybean mealOrganic oatsOrganic wheat
Organic ryeNon-GMO cornNon-GMO soybeans
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SUPPLY PICTUREMercaris Estimated 2019 Total U.S. Organic Crop Land Acres Harvested
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19.0
20.8 23.3
25.4
0
5
10
15
20
25
30
35
2015/2016 2016/2017 2017/2018 2018/2019
Org
anic
Soy
bean
s M
illio
n Bu
shel
s
U.S. Production Imports*Source: Mercaris, USDA, USCBP* Imports include organic SMB adjusted to whole bean equivalent values
76% of US Supplies
21.1
21.0
15.6 16.1
0
10
20
30
40
50
60
2015/2016 2016/2017 2017/2018 2018/2019
Org
anic
Cor
n M
illio
n Bu
shel
s
U.S. Production Imports*Source: Mercaris, USDA, USCBP* Imports include organic cracked corn
28% of US Supplies
SUPPLY PICTURE
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UNDERSTANDING DEMAND
Subcategory 2018Sales
2018Growth
Fruit & Vegetables 17,374$ 5.5%Breads & Grains 5,408$ 6.4%Beverages 6,461$ 8.8%Snack Foods 2,824$ 7.2%Packaged & Prepared Foods
6,270$ 7.8%
Condiments 1,723$ 5.8%Dairy 5,651$ -0.8%Eggs 858$ 9.3%Meat, Poultry & Fish 1,292$ 11.4%Total 47,862$ 5.9%Source: Organic Trade Association, Mercaris Ca lculations
The U.S. total organic market in 2018 broke through the $50 billion mark for the first time, with sales hitting a record $52.5 billion, up 6.3 percent from the previous year.
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ORGANIC CORN AND SOY PREMIUMS
Organic corn averaged $5.75/bu (168%) over conventional and $601/acre (91%) over conventional
Organic* Conventional‡ Organic* Conventional‡ Organic* Conventional‡ Organic* Conventional‡
MY Average Price2 $9.31 $3.56 $8.25 $3.37 $9.57 $3.34 $9.50 $3.49Yield (bu/acre)4 115.4 175.0 143.2 197.0 146.0 201.0 152.1 210.0 Revenue Per Acre $1,074.85 $623.29 $1,180.92 $664.71 $1,396.61 $670.34 $1,444.49 $732.48Organic Premum Per Acre
MY Average Price3 $20.64 $9.34 $18.67 $9.56 $19.34 $9.31 $19.23 $8.27Yield (bu/acre)4 44.6 56.0 45.9 59.0 45.2 58.0 48.8 65.0 Revenue Per Acre $920.69 $522.95 $856.84 $563.79 $874.02 $540.03 $938.23 $537.68Organic Premum Per AcreSource: *Mercaris, ‡USDA
2018/191
$712
$401
Corn
Soybeans
$452 $516 $726
$398 $293 $334
Notes: 1. Based on observations from Sep 2018-June 2019, 2. Corn organic prices are Corn Belt average delivered to first handler, conventional prices are USDA Central Il, Yellow No. 2 delivered3. Soybean organic prices are Corn Belt average delivered to first handler, conventional prices are USDA Central Il, Yellow No. 1 delivered4. Average yields for Illinois
2015/16 2016/17 2017/18
Organic soy has averaged $10.18/bu (109%) over conventional and $345/acre (62%) over conventional
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DISRUPTORS
MARKETING OPTIONS
Local markets
Regional buyers/ Cooperatives
National CPG’s/ beverage companies
International direct sales
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Secure, centralized transactions
Real-time price discovery
Ensures credit worthiness, contract performance
Ability to host auctions, bilateral trades, or continuous cash markets
MERCARIS ONLINE TRADING PLATFORM
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CONTRACTING
Traditional spot/ forward contracts
Acreage/ production contracts
Whole rotation contracts
Transition contracts/ loans/ leases
Barter/ trade
IP agreements
MARKETING OPTIONS
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Final Thoughts
Get certified
Producer networks
Land lease/ rental
On-farm storage
Do buyer research…
MARKETING OPTIONS
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