Markets and Marketing for Organic and Transitional Grains in Québec
by Jean Duval, agronomist, MSc., Soil Science
A summary from interviewing successful organic grain farmers and other people involved in the sector.
A group of farmers called “Association des cultures sans herbicides” was formed in the mid ’90s around St. Hyacinthe, the heart of the St. Lawrence lowlands field crops region. The goal of this member-based group was to promote the growing of grains without chemicals. They first organized contests to see how large a yield of corn and soybeans they could get without chemicals. After they realized that they could get very good yields with proper mechanical weed control methods and good rotations, they went on to see if there was a market for these ‘almost organic’ grains. With the help of government extension people like Pierre Lachance, they first found markets in Northeastern US where certain organic certification bodies were THEN allowing a certain percentage of non-organic grains for animal rations (5%). This market quickly vanished however as accreditation systems imposed organic certifying agencies to require 100% organic feed. Other markets had to be developed.
Some major soybeans buyers were at that time developing niche markets for export to Japan. To access this market with a premium, the Association decided in the late ’90s to develop a certification system for grains without chemicals with the help of MAPAQ (the Québec Ministry of Agriculture).
The certification system in place for grains without chemicals is now called ‘Healthy Grain’ or ‘Grain de santé’ in French. It does not require that a farm be in transition to organic agriculture. It only requires that no chemicals be used the year the crop is sold. In practice, however, most farmers selling under this certification are in organic transition or are potentially looking at organic certification or are organic farmers that buy new land that has to be in transition.
The certification system is similar to organic in several ways (e.g. inputs allowed) but the inspection procedure is much stricter. There can be up to ten inspections (which can be done by a weed scout) during the course of the season. Certain administrative regions of Québec subsidize this scouting. Standards are also getting stricter. For example, it is required now that some cereals be sown in soybean fields to make sure that there is no use of herbicides or remnant of herbicides from previous season. Farmers have to be member of the association and declare their acreage in ‘Healthy Grain’ before April 1st of each year.
These ‘no chemicals’ grains have basically two markets. Soybeans, often contracted directly from the buyer, are exported to Japan. The premium is up to $100 per tonne more than the conventional price. Japanese buyers regularly come and visit some of the ‘Healthy Grain’ farms.
The other grains (corn and small grains) are mostly bought by a large pork producer who has developed an export market for a type of ‘green’ pork – a pork fed with less ‘chemical’ grains. This buyer actually mixes ‘Healthy Grain’ grains with conventional grains but can pretend to contribute to a ‘greener’ agriculture this way. In the case of small grains and corn, the premium is much less than for soybeans, and, since there is basically only one main buyer, grain lots are more easily rejected for various reasons – toxins most often.
Since the late ’90s, most of the new organic grain farmers have started by being ‘Healthy Grain’ farmers. It is an excellent way for them to become acquainted with the organic certification system and establish their network for marketing. The acreage in Québec under ‘Healthy Grain’ certification is expanding rapidly.
Networking: one the keys to successful marketing
There is no pooling or cooperative type of marketing for organic grains in Québec, at least not yet. However, most organic grain farmers are actively networking and exchanging information on price and related issues. This has been facilitated by the creation of a ‘Syndicat des producteurs de grains biologiques’, part of the ‘Federation de l’agriculture biologique du Québec’, now affiliated with UPA (Union des producteurs agricoles). Most organic grain farmers are members of this syndicate. They have a few meetings in the winter where they discuss marketing issues. Most members also regularly contact each other by phone to inform each other of price issues. This collaboration has been possible because of the steady growth in the market. If the market gets saturated, no one knows if this mutual help will stay the same but, for now, most experienced farmers are generous with their time to help newcomers in the market.
Among other marketing tools, a Ministry of Agriculture extension agent prepares a list of potential buyers in the province for organic grains every year. The 2003 list had 26 entries. For grains produced without contracts, a list of the certified grain farms (on a voluntary basis) and the grain stock they have for selling is published also every year and made available to the buyers.
Markets for each type of grain
Soybeans for human consumption for export markets (Japan and Europe) has been the driving force behind the development of organic grains in Québec since the mid-’90s. A few major buyers – who happened to also be varieties developers based in the province (e.g. Pro-grain, Ceresco) – offer contracts. However, with the development of organic livestock production, there is an increasing demand for animal feed-grade soybeans. Since farmers aim at the human consumption market, the supply for animal grade soybeans has been very low some years and abundant in other years, depending on the season. There is also an emerging market for human consumption soybeans within the province because of new important products, one of soymilk and another of Protein isolate.
Although there is a limited market for human consumption corn (corn flour for tortillas, etc.), most organic corn from Québec is sold for animal feed, with a large portion going to northeastern U.S. organic dairy farms where land is often not as good as in Québec for growing feed corn. With the development of organic meat production in the province however, more and more of the corn is used in the province.
There are half a dozen medium-sized stone-ground flour mills in Québec that mill mostly if not totally organic grains in large part for the booming ‘micro-bakery’ industry. Not long ago, these organic mills were buying most of their organic milling wheat from the Canadian prairies. As these buyers were very demanding on the quality (protein content, falling index), organic wheat grown in Québec often ended up as feed wheat.
However, in the last few years considerable efforts have been made by Québec’s organic grain farmers, with the help of the Ministry of Agriculture and in collaboration with the mills, to identify and grow varieties that satisfy the milling qualities required by the millers. This collaboration will likely be profitable for both farmers and millers.
Other Small Grains
Mixed grains are popular, especially outside of the St. Lawrence lowlands, but pure stands of oats or barley are not common on Québec’s organic farms. Mixed grains are usually sold directly from one farm to another as feedstock.
Although winter rye is appreciated for weed control, the market for organic rye is not large in Québec and it often ends up on the conventional market. Spelt is not grown to any large extent in the province except in the Eastern Townships as it rarely survives winter, yields are often low and it requires dehulling.
In 2003, a provincial committee composed of three organic grain farmers, an agronomist and an agro-economist established a budget for the production of various grains in a four-year rotation organic system. This budget is available for free on the Internet at the organic section of the provincial agricultural info site: http://www.agrireseau.qc.ca. Budgets for several organic grains are also available on the same site. When all costs are considered, corn and soybeans appear much more interesting to grow than small grains. However, small grains are essential for the maintenance of a healthy organic production system.
For more information about markets and marketing in Québec and across Canada, order Gaining Ground: Making a Successful Transition to Organic Farming from the publications page.