Organic Corn Prices Remain Depressed Despite Decline in Organic Cracked Corn Imports
Organic corn prices remain depressed despite a decline in organic cracked corn imports. Organic cracked corn imports increased steadily during the ramp-up in organic poultry demand in the United States during the 2017/2018 marketing season but have tailed off during the 2019/2020 season.
There was a dearth of organic cracked corn imports in September 2020 which was in line with the Jacobsens expectations. Despite the lack of organic cracked corn, organic corn prices have remained depressed. The Jacobsen estimates that no organic cracked corn imports arrived in September in the United States, which compares to approximately 1,600 tons which appeared in September of 2019. Historically, September has experienced robust volumes of organic cracked corn imports. For example, in September of 2018, approximately 22K tons of organic cracked corn was imported into the US.
While organic cracked corn remains a bone of contention, especially for US domestic organic farmers, the volume has declined in the past marketing year. The Jacobsen estimates that organic cracked corn imports for the 2019/2020 season were down 27% year over year, compared to the 2018/2019 marketing year.
The decline in cracked corn imports is likely a function of the drop in organic whole corn prices and the robust increase in organic whole corn available in the US. With the harvest season upon us, organic corn prices will continue to face pressure unless demand accelerates quickly or, organic cracked corn and whole corn imports moderate throughout the 2020/2021 season. The downturn in organic corn prices has not impacted the strong demand and upward price movements of organic soybeans.
The 2019/2020 season was littered with low test weight organic corn, that was sold at a discount. The Jacobsen does not expect the 2020/2021 season to see this same phenomenon, which could help buoy organic corn prices if demand remains robust and imports begin to decline.