Written by Molly Hamilton, Crop Science Extension Assistant, NCSU

Marketing organic grains is very different from marketing conventional grains. Organic grain is usually sold to a specific buyer, while a conventional grower can deposit a whole harvest at the local grain elevator. For North Carolina farmers, the organic grain buyers are almost always farther away than conventional markets, which mean freight costs are an additional consideration. The National Organic Final Rule (NOFR) indicates that organic grain needs to be handled, processed and stored in facilities separate from conventionally grown and handled grain. This means that, in a split operation (a farm with both conventional and organic grain production), harvesting, transportation and storage equipment need to be separate in time or space from equipment used in handling conventional grain. However, organically produced crops can gather higher premiums than conventional crops, so the extra trouble in getting the crop to market may be worth it in the end, financially.

The Marketplace

Nearly all organic grains are marketed as either livestock feed or for human consumption. Organic human food grade grain generally earns a higher premium than organic grain for livestock feed. However, growing for the livestock feed grade market lowers the risk of going organic for those who are new to organic farming. Growing organic grain for the human food grade market requires a lot of attention to detail and experience with organic grain production and marketing. Quality specifications are more stringent than livestock feed grade grain and markets are usually harder to identify. Often a specific variety is required by a buyer of a human food grade grain. For most North Carolina farmers, the livestock feed market is more easily accessible than the human food grade grain market. However, there are markets for North Carolina grown food-grade organic wheat that are easily accessible.

Marketing Plan

It is always a good idea to have a marketing plan, especially when marketing organic grains. Marketing should begin even before the crop is planted. Research is a key component of marketing organic grains, and should begin early. Talk to organic grain buyers, organic certifiers, your suppliers, and other organic grain farmers. The Internet also has quite a lot of up-to-date information and can be a good resource. See Marketing Resources. It is important to know your customer, whether they are a broker, a processor, a retailer or the end-user, and know what they want. It is also important to know if the buyer is looking for a certain variety of grain, a certain quantity or has certain quality specifications for the grain. Most buyers want to buy organic grain on a clean, delivered basis and to obtain other arrangements the farmer may need to negotiate with the buyer. It is also important to know what price the buyer is willing to pay (and honor) for grain, and when and how they will pay. Transportation is another critical consideration in a marketing plan. How will the product get to the consumer and when? What are the costs? Good record keeping, also part of a marketing plan, will keep a farmer knowledgeable about how profitable the operation is and where improvements can be made.

Storage

Storage may be critical for marketing organic grains. Buyers sometimes do not have sufficient storage capacity and/or cash-flow to accept an entire crop at one time. A crop may need to be stored for several weeks or months. Often, a better price for the grain is offered a few months after harvest, so storage may also be an economic advantage. To maintain grain quality during storage, insects must be kept out and the grain must be stored at proper heat and moisture conditions. Split operations will need separate storage bins or will need to thoroughly clean storage bins (swept, vacuumed and/or blown out with pressurized air) to prevent commingling of organic and conventional products. Storage bins should be identified and records should be maintained of their contents.

Genetic contamination

Harvesting and storage are an essential part of organic grain marketing, and organic standards prohibit the use of genetically modified organisms. A positive test result (GMO % above a certain level) can cause a buyer to reject a whole load. If the farm is a split operation, thorough cleaning of harvest equipment (including hauling equipment and all augers) between operations for conventional and organic crops is very important. Grain receiving pits, augers or conveyors, elevator legs, dryers, and storage bins are all sources of contamination and should be cleaned to minimize mixing. Running some organic grain at maximum capacity through the system to clean out any residual transgenic grain can also help reduce contamination risks. It may also be prudent to harvest the outside rows of organic grain fields (especially wind-pollinated grains) first and store and sell this grain as conventional. Doing this eliminates much of the contamination risk associated with cross-pollination from transgenic crops. Organic integrity must be maintained throughout the growing, harvesting, storage and transportation processes.

Transportation

Organic grain buyers generally need the grain delivered to their facilities and they pay on a delivered basis. This means that the grower is often responsible for transportation of the grain. Trucks that transport grain from the farm to buyers should be cleaned thoroughly before loading organic grain. It is important to remember to clean the hopper bottoms and any covering (e.g. canvas) on the truck as well as the bed. Document the cleaning, as this may be needed by the buyer and certifier. Documentation can be a written statement or affidavit that says when the cleaning was done and how—it shows that the producer is taking responsibility for the cleanliness of the transportation vehicle.

Grain Quality

Grain quality is very important to human grade grain as well as livestock feed grain. The quality of the grain determines its value. High quality grain must be clean and weed seed-free, undamaged, uncontaminated, and identifiable. Controlling weeds, pests and volunteer crops in the field can help keep quality high.

Contracts

Organic grain buyers will sometimes contract with producers to supply a grain crop within a specified time period at a specified price. Contracts are legal agreements between the farmer and the buyer, and are more common to large grain producers in the western states than grain producers in the eastern US. However, some specialty organic grain crops, such as buckwheat or sunflowers, may require contracts.

Getting Paid

To ensure you are paid once your crop is harvested and delivered, start by finding out information about the buyer. How soon after the crop is delivered will they pay you? What experiences have other farmers had with them? Check with the buyer’s organic certification agency or your certification agency and ask if other organic growers had problems with the buyer. When dealing with a new buyer, it may be prudent to sell the minimum quantity at first to avoid losses.

Completed paperwork may be needed to get paid. Organic grain marketing depends on documentation. When delivering grain to a buyer, be sure to have all required paperwork, such as a bill of lading, clean truck affidavit or truck cleaning document, weigh slip, and a copy of the organic certificate under which the product is certified (proof of certification is critical). Check with the buyer to see if they require any other documentation.

Finding Organic Grain Buyers

To find a buyer for your organic grain, contact organic grain mills, brokers, and processors directly. Networking with other farmers, buyers or state agencies may also be very helpful in finding buyers. You can see the list of buyers interested in NC produced organic grains on this website here. This list is not a comprehensive list of all organic grain buyers and there may be other companies that will buy NC organic grain that are not on this list. One way to find new buyers is to explore the internet. Many organic grain buyers are on the web.

Organic Forage Crop Market in NC

Some dairy farms in North Carolina, especially in the western part of the state, are beginning to work on transitioning to organic. It is expected that, roughly, 500 to 750 dairy cows will be certified organic by sometime 2006 in western NC and supplying milk to a certified organic milk processor in the area. These herds will need about 3 tons of supplements and 4 to 5 tons of forage dry matter per cow per year. This adds up to over 1800 tons of organic grain supplement and 2400 tons of organic forage needed--a great market for organic forage crops.

 

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