Insight on organic grains: Mercaris provides supply and pricing data
The company also hosts an on-line auction to facilitate organic and non-G.M.O. trade
The first survey took place in 2012. Then Mercaris officially launched as a company about three years ago, seeking to fill a market need for data such as acreage and pricing on organic grains, said Alex Heilman, director of sales.
“We essentially created the largest organic and non-G.M.O. grain survey across North America,” he said.
Mercaris, based in Silver Spring, Md., through its data plans provides information on organic and non-bioengineered/non-G.M.O. corn, organic and non-bioengineered/non-G.M.O. soybean, and organic wheat. The company in the future hopes to add soybean meal and oils, said Mr. Heilman, who previously worked in commodity sales and merchandising for Miller Milling Co., Minneapolis.
Kellee James, chief executive officer, founded Mercaris after spending five years at start-up company Chicago Climate Exchange (CCX), an electronic trading platform and registry for spot, futures and options on carbon, sulfur, clean energy and other environmental derivatives. Chris Duesing, co-founder and chief technology officer for Mercaris, has 15 years of experience in software development and most recently was the director of application development for the CCX.
Mercaris publishes monthly market updates, quarterly imports reports, an annual acreage report and annual commodity reports. Pricing, at a minimum, comes out once a week, Mr. Heilman said.
“That is the bulk and backbone of what we do,” he said of pricing.
Mercaris runs national average prices and also breaks out prices regionally, between food and feed and between spot and forward. Mercaris divides regions into three in the United States (central, east and west) and two in Canada (east and west).
A Mercaris Auction Platform, an electronic venue, facilitates the buying and selling of identity-preserved agricultural commodities. Mercaris on April 13 said more than 280,000 bus of organic grain had been traded year to date on the on-line platform, which was more volume than traded in all of 2016. The auction covers organic, transitional and non-bioengineered/non-G.M.O. corn, soybeans, wheat and other small grains.
For its clients, Mercaris offers several different data plans, Mr. Heilman said. A less expensive one is geared toward farmers. A more inclusive data plan is geared toward large grain companies, large dairies, consumer product goods companies and venture capitalists.
A geospatial mapping tool helps support the milling industry specifically. It may show potential areas of opportunity, where voids in the market may be and where competitors are.
To obtain data, Mercaris surveys the first handlers of grain, primarily elevators. About 60 first handlers participate in the survey now.
“Those participants are everyone from small, regional, one-location elevator (operations) all the way up through some large multinational companies that maybe have 25-plus locations,” Mr. Heilman said.
Non-disclosure agreements are signed. Grain handlers share volume pricing and other data. Mercaris aggregates the data to publish reports.
Mercaris also tracks imports of organic wheat, corn and soybeans. Imports account for more than 50% of domestic consumption in each of those three organic crops, Mr. Heilman said. Organic durum wheat imports in 2016 reached 976,000 bus at an average price of $13.76 per bu on a delivered cost basis, according to the U.S. Department of Agriculture’s Foreign Agricultural Service. Organic soybean imports in 2016 reached 13.8 million bus worth $270 million, and organic yellow dent corn imports reached 21.7 million bus worth $160.4 million.
Mercaris reported domestic organic acreage in 2016 of 482,207 for wheat, 292,919 for corn and 150,789 for soybeans.
Exports of organic wheat, corn and soybeans grown in the United States hardly exist because of demand from domestic buyers.
“Organic demand completely outpaces organic supply domestically,” Mr. Heilman said “This market does need to grow pretty drastically.”
Tracking organic pricing and supply has become less difficult over the past few years.
“When we first started doing this, the organic markets essentially were really shrouded in secrecy,” Mr. Heilman said. “There wasn’t necessarily a drive for more market transparency. There were a few larger players who had kind of cornered the market, so to speak, and so more insight was not necessarily a good thing.
“However, the industry has changed pretty significantly in the last couple of years. There are also a lot more smaller players that are stepping in who really do rely on a little more market transparency in order to grow their business and also grow their access to acres.”