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Tracking Movement of Canadian Organic Grain around the Globe

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In this article, we provide insights about where your organic grains go once they leave your farm, with a focus on export markets. Whether you sell your grain directly to an international buyer or to a local grain merchant, chances are good that the grain will end up either in the US or overseas. Below we track volumes, values and destinations.


Canada does have a growing food processing industry to add values to grains. Some organic grains end up in food products sold in Canadian retail and food service settings. In future articles, we’ll take a detailed look at this domestic market, but first the exports.


The Data

Canada has 14 organic harmonized series (HS) export codes for organic cereals, oilseeds and pulses, but as of now, we have no similar import codes for organic grains. This means that other than anecdotal reports of organic grains coming into Canada from grain buyers, we have no hard data on imports. Canada currently tracks international exports of organic peas, wheat, oats, flax, barley, lentils, corn and soybeans.


Export data are collected at the border and collated by Statistics Canada and Agriculture and Agri-Food Canada. Keep in mind that these data rely on exporters to choose the correct codes to describe their products. We have encountered some cases, for example, lentil exports in 2020, that exceed the estimated volumes of those crops produced in Canada. This suggests that at least in the past, exporters have miscoded some products. While this example suggests that conventional grains are being counted as organic, we think that most of the errors are under - rather than over-estimates. A detailed analysis by Mercaris in the US a few years ago compared import data collected by the Foreign Ag Service of the United States Department of Agriculture (FAS/USDA) to data from other sources, including cargo ship manifests. They found that the amount of organic grain coming into the US was underestimated by the USDA, even for those grains that have HS codes. Of course, we also know that there are many organic grains for which neither the US or Canada have HS codes, including millet, mustard, rye, sunflower, sorghum, specialty wheats and other cereals, pulses and oilseeds.


With at least one major certifier refusing to volunteer acreage data, Canada can no longer generate reliable data on domestic organic grain production. We do know that organic farmers in the Prairie region who are responsible for the vast majority of Canada’s organic grain production, with the exception of soybeans and corn, are disappearing at significant rates, because of retirement or reversion to conventional grain production. According to the Canada Organic Trade Association (COTA), in 2023, in 2022, Canada lost 18% of its total organic field crop acres as compared to 2020. In 2022, there were 1,104,443 acres of organic field crops versus 1,352,891 acres in 2020, a loss of 250,000 acres.



Key Findings from the Export Data


Total Tracked Exports


Organic grain exports from Canada peaked in 2020 with sales of $453.7 million (768,656 MT). Exports declined by 41% in 2021 to $267.6 million (389,509 MT), before rising again in 2022 to $360.4 million (405,997 MT). By the end of July 2023, global tracked organic grain exports were worth $187.1 million (52% of 2022 exports), slightly under the $209 million expected to be on par with 2022 export levels (Figs. 1 and 2).


Figure 1.



Figure 2.



Leading Canadian Organic Exports


In 2022, the leading tracked organic grain exports by value were soybeans ($85.8 million), green lentils ($68.9 million), wheat ($51.0 million), and corn ($34.7 million).


Figure 3 Value of Canadian Exports by Crop, 2022 ($CDN, millions)





Source: Statistics Canada data retrieved from CATSNET Analytics, AAFC


Leading Export Destinations


Organic grain export destinations are diverse, however, exports to the US still dwarf exports to all other countries, with $128 million in sales in 2022. This is 35% of all organic grain exports from Canada in 2022. China was the second largest export destination in 2022 with $40 million in sales, followed by Japan at $27 million. Outside of our neighbour to the south, for years now, Asian destinations have supplanted European export destinations for Canadian organic businesses. In 2018, Canada exported $38.3 million in organic grains to European countries (including those in Eastern Europe). In 2022, organic grain exports to Europe were down by 30%. In 2022, exports to European countries (including Eastern Europe) accounted for only 7% of Canada’s total organic grain exports (by value). This is likely due to gradually increasing organic grain production in Western Europe, combined with recent massive increases in organic grain production in eastern European countries that are much closer to Western Europe than Canada is. We are watching the situation with the Ukrainian war closely as this will no doubt affect the movement of organic grains globally. Prior to recent grain embargos from the Black Sea region, Russia and the Ukraine were both major exporters of the grains that Canada produces.


Figure 4 Top Export Destinations for Tracked Canadian Organic Grains by Value ($CDN, millions)



Key export crops for Canada’s top two destinations are shown in Table 1 below.


Table 1 Top organic grain exports to the US and China




Export Details by Crop


Below we provide more detail on some of Canada’s tracked organic grain exports. We will look at other crops in the next issue.


Lentils

Since 2018, the majority of organic lentils exported from Canada are green types, a category that includes green and French green lentils of all sizes. Lentil exports peaked in 2020 at $258.8 million in sales and 365.2 million kg in volume (Figure 5). Both the value and volume of organic lentil exports declined dramatically in 2021 to $85.4 million and sales (88.4 million kg). The vast majority (96%) of all organic lentil types are grown and exported directly from the province of Saskatchewan.


Figure 5 Value of lentil exports from Canada between 2018 and 2022



Export destinations are diverse and US and Asian countries are not major buyers. Key export destinations include African, South American and European countries (Figure 6).



Figure 6 Top five export destinations for Canadian organic lentils in 2022



Soybeans

In 2022, Canada exported $85.8 million in bulk organic soybeans, a volume of 71,617 MT. Unlike other organic grains, soybean exports did not drop during the pandemic, increasing by about $20 million per year between 2018 and 2022.


Figure 7 Value of organic soybean exports from Canada to all countries between 2018 and July 2023 ($CDN)



Export destinations for Canadian organic soybeans are shown in Figure 8. The US is the leading destination with $41.1 million in exports in 2022. At the end of July, organic soybean exports were only at 39% of the 2022 export value.

Even though the US has made it a priority to increase domestic production of organic soy, a key feed grain that underpins the US domestic organic livestock industry, and has successfully grown production by 64% between 2019 and 2021, soybean imports are still going up. In 2022, the US imported $356.7 million in bulk soybeans, up 94% over 2021.


Almost all Canadian organic soybeans were exported from Quebec and Ontario in 2022, with 59% originating in Ontario and 40% from Quebec. Beans originating in Ontario are more likely to go to Japan (36% of 42,063 MT in 2022, versus 21% to the US), while 65% of the volume of beans exported from Quebec (28,458 MT in 2022) headed to the US. This may reflect differences in end uses. The US primarily buys beans for the feed industry, while Asia often purchases beans at a higher value for food processing for products such as tofu. Other key export destinations include China, the Netherlands, Taiwan and Malaysia. None of the organic soybeans exported from Canada to China originate in Quebec. These are shipped from Ontario.



Figure 8 Top five export destinations for Canadian organic soybeans ($CDN)




Although Canada does not track the export of value-added organic grain products, data from the USDA/FAS show $15.5 million US in imports to Canada of organic soybean cake and meal between January and July 2023 (Figure 9).


Figure 9 US organic imports of bulk organic soybeans and soybean meal and cake from Canada in 2023 ($US, x $1,000)



Wheat

Organic wheat exports from Canada were worth $50.9 million in 2022 (76,302 MT), a decline of 24% in value and 51% in volume since 2018 (Figure 10). So far in 2023, Canada is on track to export more organic wheat than it did in 2022 with $35.0 million (50,626 MT) exported by the end of July.


Hard red spring wheat exports dominate the wheat category, with sales of $26.8 million in 2022 (49,380 MT), followed by Durum at $13.4 million on sales of 17,641 MT. However, since hard red spring exports collapsed in 2021, the differential value between wheat types has been narrowing. The ‘other wheat’ category includes all other wheat classes, including soft and winter wheats. The value of exports in this category in 2022 was $10.7 million, with only $2.8 million exported by the end of July.


Exports of organic wheat have declined significantly since 2020 when sales peaked at $95.9 million on 249,223 MT,a trend that mirrors decline in production. However, 2022 saw a rebound of 31% in value over 2021. Volumes were nearly identical, indicating the grain sold at a higher price.


Saskatchewan dominates the Canadian market for organic Durum wheat. Eighty-one percent of the value of the crop is exported from this province. The remaining Durum (by value) is exported from Alberta ($2.5 million) and Manitoba ($104,891).

Other wheat exports were worth $10.7 million on 9,281 MT in 2022. Exports in this category were down midway through 2023 ($2.7 million on 2,577 MT). Thirty-five percent of the value of exports in this category originate from Saskatchewan, 31% from Alberta, 19% from Manitoba and 11% from Ontario. The vast majority (95%) of these wheats end up in the US.


Figure 10 Organic wheat exports in 2022 ($CDN)



Key destinations for Canadian organic hard red spring wheat are the US and Asia, including China, Thailand, Indonesia and Malaysia (Figure 10). The majority of this crop originates in the Prairie region and Saskatchewan leads exports with $9.5 million, followed by Alberta with $8.8 million, Manitoba with $5.1 million and Ontario with $3.0 million in 2022. The US is the leading destination for all four provinces. For hard red spring, the US made up 34% of the value of exports to all countries while the four Asian countries listed above made up 42% of the value. For Durum wheat, export destinations are quite different from those for hard red spring. Belgium received $5.7 million worth of Canadian Durum in 2022, just nudging out the US at $5.4 million.


Figure 11 Top 5 export destinations for organic wheat ($CDN)




While Canada does not have any value-added HS export codes for organic grain products, the US does track imports of whole wheat organic flour. The value of these imports from Canada are shown in Table 2.


Table 2. US imports of organic whole wheat flour from Canada, 2018-2023 ($USD, x $1,000)




Peas

In 2022, organic pea exports from Canada were worth $39.7 million (49,429 MT).


Figure 12 Organic pea exports in 2022 ($CDN)



Source: Statistics Canada data retrieved from CATSNET Analytics, AAFC

The vast majority of these products are destined for China (Figure 13, $31 million and 39,511 MT in 2022). So far, in 2023, organic pea exports to China are down considerably ($11.8 million and 15,919 MT).


Figure 13 Top 5 export destinations for organic peas ($CDN)



Figure 14 Organic pea exports to China 2018 to July 2023 ($CDN, millions)




Flax

By July of this year, export values of organic flax have already more than doubled exports for the entire previous year. Both the volume and value of flax exports increased, with value increasing more (197% versus 147%).


Figure 15 Organic flax exports in 2022 ($CDN)




The United Kingdom and the US are the top buyers of Canadian organic flax.


Figure 16 Top 5 export destinations for organic flax in 2022


Table 3 shows organic flax oil imports from Canada between 2018 and April 2023


Table 3 Flax oil imports to the US from Canada 2018 – 2023 ($US, x 1,000)




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