Mercaris Murmurings: Organic Soybean Prices Still Strong

Nov 24, 2021

Organic soybean prices remained strong into November, even as the end of harvest nears. As of Nov. 14, Mercaris estimated U.S. organic soybean harvest at 88% complete, putting it on pace to be nearly complete by early December. With harvest steadily progressing, yields continue to look positive, suggesting that Mercaris pre-harvest estimate of 37.5 bushels per-acre may need to be revised higher.

Despite the prospect of an excellent U.S. harvest, the market appears supported by a persistently tight outlook for U.S. organic soy imports. Over the first two months of the current market year, U.S. organic soybean imports only reached 22,900 MT according to Mercaris estimates, down 60% year-over-year. Likewise, maritime imports of organic soybean meal reached 62,300 MT according to Mercaris estimates, down 68% y/y.

Adding to the bullish support currently offered by imports, October brought two developments that could lead long-term price support. First, on Oct. 20 India’s Agricultural and Processed Food Products Export Development Authority (APEDA) issued a decision barring four organic certifying agencies (CU Inspections India Pvt Ltd, ECOCERT India Pvt Ltd, Indian Organic Certification Agency, Aditi Organic Certifications Pvt Ltd) from registering any new processors or exporters of organic products.

Furthermore, APEDA issued a year-long suspension for OneCert International, effectively prohibiting the organization’s ability to provide organic certification altogether. This announcement will likely impede the re-certification efforts many Indian operations are pursuing following the National Organic Program’s (NOP) January decision to end its recognition agreement with India, making it difficult to achieve recertification by the July 12, 2022 deadline set by the NOP.

Second, the Department of Commerce (DOC) released a Decision Memorandum regarding its determination in the anti-dumping duty (ADD) portion of its investigation of organic soybean meal from India. In the memorandum, the DOC determined that Indian-sourced organic soybean meal is likely being sold in U.S. markets at less than fair market value, thus warranting an ADD in addition to the CVD. The DOC’s ADD findings were split along the same adverse facts available (AFA) line as the CVD finding. For those who were assessed the rate of 266.37% in August’s CVD finding, the DOC determined that an ADD rate of 18.85% is appropriate. For those who were not assessed the AFA rate, the DOC determined that an ADD of 3.11% is appropriate. However, the ADD is based on the DOC determining that Indian organic soybean meal is being sold at below-market prices in the U.S. As part of this finding, the DOC also determined 7.02% offset should be applied to the ADD rate based on the potential impact of Indian subsides. As a result, non-AFA operations will potentially face an ADD of 0% (3.11% – 7.02%). For all others, who were assessed the AFA rate, their affective ADD rate will be 11.83% + (18.85% – 7.02%).

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Video: The 15-Year Bet Behind Every New Variety!

Canada is trying to decide how much agricultural research capacity it can afford to lose. Brian Rossnagel believes the better question is whether the country can afford to rebuild it.

The longtime barley and oat breeder makes the case with a simple fact about his profession: the consequences of today’s decisions may not become visible for 10 or 15 years.

“Pick the right parents. That’s the biggest thing,” Rossnagel says. “If you pick the wrong parents, you’re not going to get anywhere—and you don’t know that until 10 years, 15 years later.”

That warning carries particular weight as Agriculture and Agri-Food Canada moves to reduce spending and streamline parts of its science operations. The department’s 2026–27 plan anticipates the loss of approximately 665 positions by 2028–29 and says some research will be reduced where capacity exists in academia or industry. AAFC says the changes will make its science operations more cost-effective over the long term.

For Canada’s seed industry, Rossnagel’s career illustrates what is at stake.

This fall, the retired University of Saskatchewan breeder will be inducted into the Canadian Agricultural Hall of Fame. During his 35-year career at the Crop Development Centre, he helped develop more than 100 barley and oat varieties, including CDC Austenson—one of Western Canada’s most widely grown feed barleys. His induction recognizes not only those varieties, but the collaboration and research system that made them possible.

Rossnagel is quick to emphasize that none of it was the work of one person.

“The first thing I thought about was all the other people who contributed to whatever success I and my program had over the years,” he says. “We know that it’s not an individual who does this. It’s a group—a team.”

That team extends well beyond the breeder whose name appears beside a variety. It includes technicians, pathologists, quality specialists, statisticians, regional testing sites, seed growers and industry partners. It also includes the breeders who came before and those who will carry the germplasm forward.

CDC Fraser barley, for example, moved through three breeding careers. Its parents came from Brian Harvey’s program. Rossnagel advanced the material after Harvey retired, and Aaron Beattie later guided it through registration and release.

That kind of handoff is normal in plant breeding. The person who makes the original cross may never see the resulting variety reach farmers.

It also explains why lost research capacity cannot simply be switched back on when budgets improve.

“If you shut it off, it’s very, very difficult—and particularly costly—to start it up again,” Rossnagel says. “If you have to start from scratch, it’s going to be at least 10 years before anybody notices whether you’re getting anything done or not.”

The concern is not simply how many experimental lines Canada can process. Modern equipment, statistical tools and genetic technologies allow today’s breeding programs to evaluate tens of thousands of lines—far more than Rossnagel could handle when he entered the field in the early 1970s.

But efficiency and automation do not generate every idea.

“If you pare back down, and instead of having six or seven individual scientists concentrating on wheat breeding, you go down and say three people could handle all this, well, that’s half the ideas gone,” he says. “Particularly if you happen to lose the three people who had the really neat and innovative ideas, boy, that’s a problem.”

It is a timely distinction for Canadian agriculture. Consolidating programs may preserve the volume of material moving through a system, at least initially. It may not preserve the diversity of thinking, regional knowledge or willingness to pursue unconventional crosses.

That regional knowledge matters because Canadian agriculture is not one uniform production environment. A variety suited to southern Alberta may face different disease, moisture and maturity pressures than one grown in Manitoba, Ontario or Atlantic Canada.

“Agriculture is applied biology,” Rossnagel says. “Biology, all around the Earth, moves from the poles to the equator. It does not move from Newfoundland to B.C. like politics do.”