Organic corn prices could rise if imports of organic cracked corn slow

Organic pet food markets are experiencing high volatility, and it’s likely there will be more to come. The US market focused on the lack of organic soybeans and soybean meal due to a perfect storm leading to a sharp drop in imports from India. Market participants could face another price shock that could be even more costly. Imports of organic cracked corn have been a staple for the past 4 years, and many animal feed mills in the United States rely on organic cracked corn as a source of food energy.

Imports of cracked organic corn are stable

Organic cracked corn imports have remained stable for the past two years, having declined as domestic organic corn production increased. In 2019, approximately 211,000 metric tons of organic cracked corn was imported into the United States. In 2020, that figure dropped to 180,000 metric tons. In 2021, approximately 175,000 metric tons of organic cracked corn entered the United States for organic food consumption. The stable nature of this product has allowed many companies to rely on on-time deliveries to manage their organic milling operations.

Where does organic corn come from?

Cracked Organic Corn is organic ‘cracked’ corn in Giresun, Turkey. A survey of merchandisers conducted by Fastmarkets/the Jacobsen estimates that around 70% of organic cracked corn in Turkey comes from Russia and Ukraine. Not only will it be difficult, since the harvest begins in about 3 months, to plant organic corn, but also it will be almost impossible to get such corn in Russia.

Transport insurance

In addition, it will be difficult to obtain transport insurance outside the Black Sea region. The geopolitical environment could change, but obtaining insurance is likely to be very difficult, and if possible, expensive. If the organic corn can make it to the United States, that extra expense will likely be shared with the customer.

What will happen to the prices

Geopolitical events occur in a region of the world relevant to organic food consumers. About 33% of the organic soy that entered the United States in 2021 came from Ukraine or Russia. The organic feed market has already braced itself for rising prices for organic soybeans and soybean meal. Now the next shoe might drop. If half of the organic corn that enters Turkey from Russia or Ukraine does not arrive, nearly 60,000 metric tons of organic cracked corn will not reach US shores. While the past crop in the United States has been robust, it will not offset Argentina’s low organic corn crop and organic crack corn disruption.

About Marco C. Nichols

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