< Back to Posts

In this Issue: A Message from Kellee James, Mercaris to Focus on Price Discovery for IP Crops, Upcoming Events, Get Involved View this email in your browser

Welcome to Mercaris Monthly

Dear Readers:

Welcome to the first installment of the Mercaris Monthly Newsletter. When we first launched Mercaris, it was with a sense of urgency. The world’s population has reached 7 billion (and counting!), environmental challenges abound, and extreme weather and a changing climate have made it clear that sustainability must play a prominent role in the decades to come.

Agriculture is on the frontline of these challenges and opportunities. How will we produce enough food to meet demand without destroying the natural systems we depend on to maintain human and animal health? 

When it comes to the food they eat, an ever greater number of consumers are asking these questions, and organic and non-GMO agricultural production provide valuable answers. Of course, it will require a long term and multi-faceted effort to create a sustainable food system. Great work is being done in the areas of plant and soil science, consumer education and outreach, and farm policy. We support and applaud such efforts.

Our focus is to help develop market information and marketing tools for the organic and non-GMO supply chain. Mercaris seeks to enable participants to better understand supply and demand factors for these growing markets, to foster greater transparency and efficiency, and to allow buyers and sellers to meet and conduct business more easily. 

We’re excited about the services we’ll provide to the organic and non-GMO food, feed & fiber sector. We envision this newsletter as a way to keep you, our stakeholders, up-to-date on our work to disseminate market information about identity-preserved (IP) crops and as a forum for presenting ideas on product development at Mercaris. 

We welcome your feedback as we move forward. Thank you for reading and we hope this is the beginning of a long and fruitful partnership.

Kellee James
Founder and CEO

Mercaris to Focus on Price Discovery for IP Crops

As consumer demand for identity-preserved (IP) agricultural products grows, a lack of clear market signals may be inhibiting supply while increasing risk and transaction costs to market participants.  Without transparent price signals, farmers may be reluctant to undertake the additional cost and risk involved with growing, certifying, and segregating IP crops. The resulting impact on supply likely raises buyer difficulty and transaction costs associated with securing sufficient volumes of these crops, while negatively impacting planning efficiency and the expansion of this promising consumer market. 

In conventional agricultural markets, the existence of liquid cash and futures markets, as well as significant data collection on the part of USDA, go a long way toward addressing the market limitations common to the agricultural sector. Regular and frequent estimates of supply and demand for conventional crops, paired with robust pricing data, lead to more efficient planting and investment decisions.

By contrast, such rich informational tools do not exist for organic and non-GMO crops. Though USDA has invested some resources in attempting to quantify organic acreage and production on a periodic basis, those efforts have been sporadic and highly sensitive to the availability of funding. USDA does publish spot market prices for selected organic grains on a national basis every two weeks (when available), but timely, regionally-specific cash market information for the sector remains sparse. 

Mercaris seeks to fill the gap in the market for IP crops by addressing this lack of information in the cash market, particularly through price discovery. Specifically, we are in the process of building a data series of original prices by collecting transactional data from IP grain buyers, beginning with organic corn, organic soybeans, and non-GMO soybeans.  Mercaris will derive weekly weighted-average spot and forward prices by region, and in the future will add new IP crops and potentially increase reporting to daily for those that demonstrate sufficient trading frequency.

Next steps for Mercaris include establishing data collection regions and outreach to potential survey participants. Both efforts are in their early stages, though Mercaris has begun signing non-disclosure agreements with entities willing to provide transaction data. Readers might be of assistance to these efforts either by participating in the Mercaris price survey or by weighing in on how we delineate the various regions.

Last, obtaining volume data through a weekly price survey will provide a sense of market size and lead to more comprehensive market analysis. Though weekly volume data will not be made available to subscribers in order to protect confidentiality, we expect to use it internally to estimate aggregate supply or production and eventually create supply/use balance sheets for these IP crops.

The ultimate goal of providing this new information source is to assist stakeholders in the organic and non-GMO supply chain in their day-to-day operations as they manage, plan, and grow their businesses and serve their own customer bases.

Thank you for reading. Feedback as we begin this endeavor is most welcome. You may reach me at [email protected] or (301) 495-4906.

Tiffany Arthur
Director of Agricultural Research and Product Development

Upcoming Events

January 11-12, 2013
Minnesota Organic Conference 
St. Cloud, MN

February 21-23, 2013
MOSES Organic Farming Conference
LaCrosse, WI

March 7-10, 2013
Natural Products Expo West, Anaheim, CA

We will be attending the above events. Contact us for more information!

Get Involved

There are many ways to engage with us. Visit our website to sign up for the latest news and for more information.

Mercaris is looking for people to join our Expert Working Group on Grains & Oilseeds.

Our working group consists of thought leaders who provide technical input on the information products we offer to the industry. If you represent an organization with experience with organic or non-GMO feed or food grains, and would like to have strategic input into Mercaris products and services, contact us!
Copyright © *|CURRENT_YEAR|* *|LIST:COMPANY|*, All rights reserved.

Our mailing address is:
unsubscribe from this list   forward to a friend