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Organic soybean prices are on the rise. Merchandisers are quoting prices in PA near $22.50 per bushel. Meal prices are also on the rise, moving north of the $800 level with transactions for the Q3 printing above those levels. Organic corn prices remain stuck in the mud.
The demand side of the ledger remains upbeat, as the United States attempts to reopen the economy. The trend in driving continues to move higher and is now up 16% compared to the period just ahead of the quarantine in late February. Of course, some of this information is skewed since driving generally increases after Memorial Day.
The areas that were hit the hardest, including the New York City area is still down across all forms of transport including driving, walking, and transit. The New York City economy represents 5% of the US total GDP, which will make it difficult for growth to accelerate without New York playing a hand in the re-expansion.
The quarantine across the US destroyed the supply chain for conventional food, but also shed light on what could occur if there is a “new normal”. Retail shoppers are used to the lack of supply of certain products including baking goods, snacks, meat, and dairy.
The organic dairy sector has benefited from strong retail demand in April and May. Retail organic whole milk prices reached high in early May, with the 4-week moving average reaching the highest level seen in the past 24-months. Prices have eased in early June, but the squeeze in prices reflects the lack of supply chain for organic dairy if people continue to shop at the supermarkets. Foot traffic at supermarkets remains elevated, and demand at delivery services such as Instacart also remains high. While organic milk has seen an uptick in sales, organic plant-based milk sales are also moving higher. After trending lower for most of 2018-2019, organic plant-based milk sales have picked up and formed a bottom.