SILVER SPRING, MARYLAND, US — US organic corn and wheat prices will be challenged with a larger-than-anticipated beginning stocks and an increase in harvested areas over the 2019-20 marketing year, according to Mercaris, the organic and non-GMO trading platform and market information company.
Planting and harvest conditions in 2019 were not optimal, but corn and wheat harvests were still pushed above previous estimates. In addition, corn imports rose sharply at the end of the 2018-19 marketing year, 12% above projections, Mercaris said. The commodity saw an increase in harvested area.
Mercaris estimates US organic corn production to total 39.7 million bushels in 2019-20, up 9% from the previous outlook.
“Feed-grade organic corn prices have experienced a lot of pressure since last August, as harvest exceeded the industry’s expectation,” said Ryan Koory, director of economics for Mercaris. “With buyers expecting tighter 2019-20 supplies, a lot of organic corn was imported and stored at the end of 2018-19, putting corn markets in a perpetually long supply position this year.”
US organic wheat production experienced a 15% year-over-year jump in 2019 with a total of 20 million bushels, Mercaris said.
Meanwhile, US organic soybeans are expected to fair better as strong demand remains for the commodity coupled with lower imports.
“With China and the Black Sea region sending less organic soybean meal to the US, domestic organic soybean crush has picked up the slack, tightening the overall US soybean supply situation,” Koory said. “We may see this pressure back off this fall if we experience a good organic soybean harvest. But, through the remainder of 2019-20 organic soybean prices look firmly supported.”
Similar to corn, the US organic soybean production is estimated to be up 9% at 7.6 million bushels in the 2019-20 marketing year, Mercaris said.
Mercaris’ spring outlook did not specifically address risks that the coronavirus (COVID-19) pandemic could bring to the US organic market but did point out potential issues that may impact it.
Some possible issues and risks include: supply and production issues, changes in consumer behavior that could lead to economic downturn, value of the US dollar, government subsidies and relief packages and access to capital.
Mercaris is a comprehensive source of market data and online trading for feed-grade and food-grade organic and non-GMO commodities based in Silver Spring, Maryland, US. For more information visit www.mercaris.com.
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