Organic grain is gaining ground

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SALEM, Ohio — It’s not an easy path, but there has been a significant increase in the number of certified organic grain operations.

John Bobbe, a Wisconsin grain farmer and executive director of Organic Farmers Agency for Relationship Marketing or OFARM, expects the organic grain industry will grow by 14 percent each year for the next three years.

“The organic industry is the fastest-growing segment of the food industry. There is no doubt about it,” said Bobbe.

Food and feed grade

He said the biggest crops are corn, soybeans and wheat. There are food grade and feed grade in each crop.

Organic growing systems have lower yields compared to their conventionally grown counterparts, however, according to a report from the Organic Trade Association, the organic sector posted its largest-ever dollar gain in 2015.

Total organic product sales grew by $4.2 billion, now reaching $43.3 billion.

Both Bobbe and Ohio organic grain farmer Dave Shively say the organic markets are profitable due to the significant price premiums paid for certified organic crops.

Not an easy path

Bobbe said organic grain farming is not easy and it’s not the path for some who may want to make the jump from the conventional grain market.

“It’s a great way to farm. However, you have to go in with your eyes open. There are problems on the conventional side and problems on the organic side as well,” said Bobbe.

He said some farmers have been joining the organic ranks simply because of the weak grain prices. However, that’s not the reason to do it, said it can end up costing money — and greater losses for the farmer.

Shively, who farms 80 acres in Henry County, Ohio, and grows organic corn, soybeans, wheat, alfalfa and a rotation of cover crops including rye, said there is a greater profit margin in organic grains than conventional grain. However, both Bobbe and Shively agree it’s a market with its own risks.

Three-year transition

The process can take years to switch a farm entirely to organic growing. Bobbe said a farmer can expect at least a three-year wait to get the land certified as organic.

The date begins from the last application of herbicide, fungicide or fertilizer onto the land.

In those three years, farmers are forced to sell their grains on the conventional market.

In addition, farmers are required to have a crop rotation by the national organic rules, and the crop rotation must be documented.

Sometimes the rotation may include more than soybeans, corn and hay, and may include wheat, rye or barley.

To become a certified organic farm through the USDA, the farmer must have a farm plan that identifies the fields and what will be grown in them in the rotation.

The record has to be on file so that there can be complete traceability when it comes to the grains from the farm and even what field on the farm.

“The whole idea of organics is for it to be traced. You have to have traceability,” said Bobbe.

Buffer strips

Traceability isn’t the only issue farmers have to be aware of when it come to organic grains.

One issue is buffer strips. In order to be certified organic, farmers have to include buffer strips in their acreage in order to keep conventional and organic separate. If the farmers don’t use buffer strips, then they must sell their grain as conventional grain when they harvest it.

Pollen drift

Another matter that has to be explored is the genetic pollen drift.

Bobbe said corn pollen can drift for three miles, and is a major issue when it comes to the organic food grade market.

He said that in the European markets, the food grade corn has to be within tolerance levels.

Bobbe said many farmers try to eliminate pollen contamination by planting two weeks later than conventional farmers.

Controlling weeds

The additional two weeks also gives the farmer the benefit of being able to work the ground and get ahead of the weeds.

Shively said controlling weeds can be very challenging for organic farmers, adding it takes a fair amount of cultivation to control the weeds at times.

However, many organic farmers are trying to get away from tillage, just like conventional farmers, and are instead turning to cover crops.

He said the cover crops help reduce weed pressure in the fields.

Shively said many conventional farmers are geared toward applying spray to weeds, but organic growers can’t do that, which can be frustrating.

“It’s a life-changing thing to do. You have to change your entire mindset when it comes to transition from conventional to organic grains,” said Shively.

He said part of the mindset has to be a concentration on producing a healthier food that hasn’t been modified or sprayed.

Growing market

According to data released by the USDA’s National Organic Program, the number of domestic certified organic operations increased by almost 12 percent between 2014 and 2015, representing the highest growth rate since 2008 and an increase of nearly 300 percent since the count began in 2002. Organic Farm Ops (Progress) (1)

There are now 21,900 certified organic operations in the United States and 31,160 around the world, according to data released by the USDA — a 300 percent increase since 2002.

“I think the concern over the GMO grains will grow and the organic market is going to remain strong. I see it continuing to grow,” said Shively.

The total retail market for organic products is now valued at more than $39 billion in the United States and over $75 billion worldwide.

Organic grain imports

However, the worldwide organic market is growing just like the American organic market, and there are organic grain imports coming into the United States.

Bobbe said up to 70 percent of the organic soybeans in the United States are imported and up to 40 percent of the corn.

“There is no doubt we need more farmers to transition to organic grains,” said Bobbe.

But both Shively and Bobbe feel that the transition has to be completed a little at a time.

“It takes years to transition a farm completely,” said Shively.

Resources available

If a farmer is serious about making the jump to organics, there are resources available to help.

Certified organic program

  • http://certification.oeffa.org/costshare.php
  • EQIP-OI is the most well-known, but with a $20,000 limit, most folks opt for general EQIP since it has a $200,000 limit. OI is not direct transition assistance, but helps fund conservation
  • www.nrcs.usda.gov/wps/portal/nrcs/detail/national/programs/?cid=nrcs143_008224
  • Some states subsidize education:
  • www.mda.state.mn.us/food/organic/transitioncostshare.aspx)
  • www.paorganic.org/transitioning-farmers
  • Organic Valley provides resources and support
  • www.farmers.coop
  • lConservation Security Program (USDA-NRCS): Provides technical and annual financial assistance to farmers and ranchers to reward new and ongoing good stewardship practices that enhance natural resources and the environment. Organic producers adopting or maintaining whole farm conservation plans may qualify for CSP support.
  • www.nrcs.usda.gov/programs/csp/

One thing Bobbe suggested is to talk to neighboring farmers involved in the organic market. Find out where they are marketing their grain and how they are handling the transition.

He said farmers who work together often find advantages to marketing.

Making the transition

In Ohio, another source is the Ohio Ecological Food and Farm Association, which can assist in making the transition from conventional grain to organic grains. OEFFA administers the organic cost-share program for Ohio. This covers the costs of certification itself and is open to all organic producers, not just grain farmers.

Other resources to look for help is the local Farm Service Agency and the Natural Resources Conservation Service offices. In 2015, USDA made more than $11.5 million available to assist organic operations with their certification costs.

Food grade grains

Bobbe said organic farmers producing food grade grains can glean a higher price, but there are strict guidelines to making it into the food grade market.

For example, if soybeans develop blue or purple stain, they are rejected from the food market and must be sold for feed grade.

Marketing

Another challenge for some farmers can be the marketing of the grain, as Bobbe said it takes more time to find buyers for organic grains than conventional grains.

“To do organic grain marketing on your own, it’s going to take 20 minutes of your time one day a week,” said Bobbe.

He added that there is a cost of marketing organic grain and it cannot be done without a contract.

“There is no free lunch. It will cost between 5.5 percent and 6.5 percent,” said Bobbie.

Bobbe said the cost should not be the only concern. He advises to watch who is writing the contract as well, and make sure it’s fair and it doesn’t benefit one party or the other.

1 COMMENT

  1. If farmers are considering transitioning they should work with OFARM to ensure producers retain control of the organic market and strengthen their position in the market. Whilst the market is booming is a great time to invest in developing your supply chains and working with your customers. Making these connections now and taking the time to work with your customers will build a more resilient supply chain for the times when things aren’t quite so good.

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