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June 19th, 2024
In this article, we will review the main elements of the Ontario organic corn market section of the report “Corn and Grain Value Chain Report” developed by the Organic Grain Hub at the request of the Organic Council of Ontario (see below for the official report link).
Canadian Organic Corn Market
Organic grain corn is grown on a commercial scale in only two provinces in Canada. Up until 2020, Ontario grew more organic corn than Quebec, but since then, more organic corn is grown in Quebec to service the large number of hog and poultry operations in that province. In both provinces, organic corn is currently grown almost exclusively for the feed market.
Ontario corn farms location and acreage
More than a third (38%) of Ontario’s 1,000 organic producers (379) grew organic field crop corn in 2023, 50% more than grew organic wheat. Just like with organic wheat most of the corn growers are in the southwest part of the province. This makes sense because the usual crop rotation for organic fields in Ontario includes corn, soy, and wheat. So, many of the farms growing wheat are also the ones growing corn.
Organic field crop corn acreage expanded by 600% between 2003 and 2022 (see figure below).
In 2022, total acreage was 28,811, down 4% over 2021. This was 1% of total Ontario corn acreage.
After estimating acreage for seed, popping corn, and on-farm uses such as silage, 25,310 acres of organic corn was left. From this we calculated a volume of 74,410 MT.
Farm gate value of corn
Disposition of organic grain corn is very different than that for conventional corn. Unlike in mainstream agriculture, in the organic sector, there are no food or industrial markets such as ethanol, leaving only the feed market.
The total farmgate value of organic corn was $38.5 million in 2022. We estimated that value, based on the average price Ontario organic producers received for their corn in 2022 ($13.14/bu).
Not surprisingly, Ontario feed mills contributed most to farmgate value with 38% of the total value, followed closely by export, which are the two market channels that we will explore below.
Market channel: Feed mills
Forty-two percent of the organic corn grown in Ontario is sold to local feed mills. The two larger mills that purchase the bulk of it are W-S Feed & Supplies and Jones Feed Mill. There are also several smaller players including several national feed companies that package and distribute organic poultry feed for backyard growers (see the wheat article for more information).
Market channel: Export to the US
Thirty-five percent of organic corn is exported, versus only 7% of conventional grain corn. Nearly all organic corn exports from Ontario end up in the US.
Organic corn exports to the US exhibit a seasonal pattern. For Ontario, March and April are the months with the highest exports and export volumes are lowest between September and November.
Up until 2021, exports from Ontario were low, totaling around $5 million annually. Exports began to rise beginning in 2021 and peaked in 2022 at $13.6 million on a volume of 26,447 MT. In 2023, the gap between Ontario and Quebec widened with exports from Ontario declining to $7.7 million on 14,476 MT, while exports from Quebec were $19.3 million on 31,736 MT.
Top destinations in the US
Ontario organic corn exports are destined for organic feed mills in the US. Four states, Pennsylvania, New York, Michigan, and Indiana made up 95% of the organic corn exported from Ontario between 2017 and 2022.
Between 2017 and 2023, Pennsylvania received 34% of the organic corn imported from Canada while New York received 33%. A cluster of 40 large organic feed mills based mostly in Lancaster County, Pennsylvania is the largest buyer of Ontario organic corn. These eastern US mills mix the corn with other organic grain into rations that feed the largest clusters of organic broiler chickens in the US.
Compared to livestock, Pennsylvania produces very little organic feed, relying on imports to fuel organic livestock production. Most of the feed grains are transported from the US Midwest. However, Ontario and Quebec have a competitive advantage, with transportation savings in the order of $1 -1.50 per bushel. The exchange rate is a wild card, but for the past few years, it has been in Canada’s favour.
US Demands:
In recent years, the US has ramped up its organic livestock numbers. According to the USDA's 2021 survey, the top three organic products by sales were milk ($1.6 billion), broilers ($1.5 billion), and eggs ($1.2 billion). However, the number of organic livestock dipped between 2021 and 2022 but picked back up in 2023. Last year, the beef herd saw the biggest jump at 8%, while laying hen numbers dropped by 4%. Organic broiler numbers, which drive demand for organic corn from Canada, have held steady for the last three years.
Despite boosting its supply, the US still imports about 26% of the organic corn used for feeding organic poultry. Demand for Canadian organic corn by the US depends on many factors, including the size and growth of the domestic livestock industry (particularly poultry), US organic corn production, and the price of imports from other countries relative to Canada.
The Figure below shows US organic corn imports from all countries. Up until 2021, Argentina was by far the largest source of US organic corn imports, but volumes began to decline in 2022, potentially because of poor growing conditions. As imports from Argentina declined, imports from Canada increased. In the first quarter of 2024, no imports from Argentina were reported with all US organic corn imports coming from Turkey and Canada. Imports from Canada made up 38%, the country’s largest share in recent history.
The situation with organic corn and other grain imports to the US is confusing to say the least. Here is a quick recap. The US has recently increased production (both acreage and yields) of organic corn to keep pace with expanding organic livestock production. Although imports did decrease in 2020, they have increased each year since 2021. This has produced surpluses in 2023 and 2024 of 4 – 4.5 million bushels. Perversely, even as production surpluses were mounting, prices continued to rise between 2021 and the spring of 2023 and the US continued to import organic corn. The only explanation that addresses why the US continued to import product that it didn’t need was that grain traders found imports at a lower price than domestic organic corn.
So, what does this mean for Canadian organic corn exporters? On the one hand, Canada’s share of US organic corn imports has been increasing since 2021, while on the other, the total volume of exports has been declining since 2022. Tightening US organic regulations meant to decrease fraud, continuing global turmoil and weather challenges in Argentina all favour Canada as a preferred importer. However, the fact that the US is serious about decreasing its dependence on organic imports and that it is successfully increasing domestic production means that Canadian organic farmers should be exploring options to diversify organic corn markets.
This report was made possible thanks to the following organizations and government agencies:
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