Marketing Grain 101

By Mark Bernard

The marketing of organic grain is very different than conventional grain, in that most of the time organic grain is sold or has a guaranteed market before it is harvested and sometimes before it is planted. So in writing this article at this time of year it could be considered late for this season or really early for the next season of grain production. Either way I hope that you are able to take information that is relative to you and your operation.

Price may likely be the biggest issue raised when I am talking to a farmer. Organic grains or produce have always brought a premium over conventional products. The question still remains of how much of a premium and what is the end price. There are quite a few factors that will influence price and set the price of the grain that is for sale.

First, there is no way you will be able to survive if you sell grain under your cost of production. This being said you need to know your cost of production. For every farm cost of production will vary and most of the cost of production information released on the internet is developed as benchmarks or guides for you to base your farm on. Being aware of all cost involved will provide the farmer with the most accurate basis from which to set prices.

Second, you must be able to convince the buyer on the reasons your product is worth the price. The quality of the grain will adjust the price, given the intended market. Also the quantity has a big factor in deciding the price. This may include having the grain cleaned to a certain grade or having a protein test completed on samples first. Having adequate storage for grain allows you to have options and possibly wait for a better deal but, when storage is utilized then this will add to the cost of the grain as you will auger the grain in and out and may require aeration.

Next, know your buyer. Most buyers will want to buy at a low price while the seller is awaiting the high price. Develop a relationship with your buyer early; understand the desired grain quality and work toward achieving that. Invite the buyer, if possible, to the field to see the crop growing. Depending on the buyer, some of the byproducts (manure, for example) may be able to come back to your farm. Also, be aware of the amount of grain that is grown by other farmers in your area destined for the same market but may be in too small of quantity to ship affordably. This has the potential of saving the buyer or seller(s) some additional costs.

Plan early for the growing season. Talk to some potential buyers and other farmers about what types of crops you will be able to grow in your given rotation. Flour mills or feed mills will require consistent supply and need to plan well in advance. So find out what they are interested in and let them know your intentions, allowing them to plan better production.

Price is only one of the many components of marketing organic grains but is usually the first thing talked about. It is important to have a well rounded approach to selling your grains starting with producing the best quality product that is possible. In upcoming newsletters we will try and touch on other topics including different types of organic grain production.

One project of the Maritime Organic Grains Network is to create an inventory of the Maritime organic grain acreage. This inventory will create the ability for all farmers and processors in the region to plan better. Livestock producers and grain processors will know where grains can be sourced and providing the opportunity to plan for years in advance.

 

Mark Bernard is the PEI Research Coordinator for Organic Agriculture Centre of Canada (OACC). We would be happy to answer your comments or questions. Please email oacc@nsac.ca or call 902-893-7256.

Posted July 2008

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