At the recent Guelph Organic Conference I attended two workshops on organic grain marketing. Ontario grows about 50,000 acres of certified organic grains. Some of this is for livestock feed and some is for flour, soy milk, tofu, cereals, etc. Organic grain prices have fallen from levels of 2-3 years ago and bins are full of organic grains waiting for better prices. The consensus at these meetings was that organic prices will increase over the next year but not right away.

From 2000 to 2006 prices were relatively stable and priced well above conventional grain prices. In 2007 and early 2008 organic grain prices increased dramatically and this made it very expensive for organic livestock producers and organic food processors. In late 2008 the recession hit and the growth of organic markets slowed significantly. Some major organic food processors stop using organic ingredients and this further reduced the market demand. Organic grain prices now are comparable to those of 2000-2006 even though they are much below 2007-8 when prices peaked.

Conventional grains were priced lower in 2000-2006, they spiked in 2007-8 and then dramatically dropped in late 2008 due to market factors. In late 2010 prices for non-organic grains have rapidly increased again to near all-time market highs. This further makes organic grains look bad as net returns per acre for growing organic grains is similar or in some cases less than growing non-organic grains.

In 2011 some growers in the USA and Canada are considering getting out of organic. Short term this makes sense economically, but I hope growers stay in organic for the following reasons:

• There are many good non-economic reasons to be into organic - environment, personal satisfaction, less reliance on input suppliers, lower input costs, etc;

• You invested a lot into your organic certification, if you get out it is a lot of work to come back;

• Prices are predicted to recover and in some areas we are beginning to see this;

• If some farmers are exiting organic that will reduce grain supplies next year and increase prices;

• Lower prices are making organic livestock production more enticing will increase feed requirements.

There is also an argument for increasing organic grain production. If you start transitioning acres into organic in 2011, your first organic harvest will be likely in 2013 or 2014 and by then prices will likely be much better than they are now based on historical and expected organic growth trends. Organic is expected to continue to grow at 10-15% per year. The higher non-organic prices in 2011 make it more to profitable to grow grains during the transition period. This reduces the economic risk during the transition period.

I hope organic continues to grow in 2011 as we continue to adjust to changes in the sector from the past 2 years. I see a bright future for organic foods and see current issues as just potholes in the road of life.