Nov 8 2021
The Food Biz Episode 15: The Ins and Outs of Organic
On this week’s episode of The Food Biz, hosts Kristyn Tarpey and Ryan Nelson are joined by Kellee James, Founder and CEO at Mercaris. Data from Mercaris makes it easy to gain insights into Organic and non-GMO commodity prices, perform analytics, and trade identity preserved-commodities.
The three discuss the differences between conventional and organic grains, the alternative meat market, the impending fertilizer shortage, and much more.
Kristyn kicks off the episode by asking Kelle how she got started in the industry. Kelle explains that she comes from a military family and moved all over the place as a child. A lot of army bases were in rural areas, and many of them had horse stables, so she grew up riding horses. She got more involved with horses while attending the University of Kentucky, and slowly, she became more and more involved in the Ag world.
After graduating from Graduate School, she got her first taste of startup life by working for the Chicago Climate Exchange. The Chicago Climate exchange was a legally binding greenhouse gas reduction and trading system for emission sources.
Kristyn then asks how Kelle became interested in sustainability. Kelle explains that she’s always been attracted to food, water, energy, and ag markets because these are the base of civilization. She believes if you are going to be in these markets, you should have access to good information to make decisions. She noticed a need in the market for reliable information and data on organic and non-GMO prices and created Mercaris to help people capitalize on the growing demand in this market. The conversation continues as they discuss the growth in the animal protein market. Kelle finds alternative meat especially interesting and thinks it’s a space to watch.
Ryan then asks how many people they have reporting to Mercaris. Kelle says they have about 60 or so first handlers of grain across the US and Canada that submit data to them on an ongoing basis. What the reporters get out of this is they give data and they get data back. Kelle notes that growers and first handlers do not want to report as they may believe they are getting above market price and don’t want others to know. However, Kelle says there is always going to be an average, and some people will be above, and some will be below. She adds that some of the initial skepticism they saw 5 years ago has come down a bit and people have realized this is an accepted way of doing business.
The conversation transitions as Kristyn asks Kelle if she thinks organic grains and oilseeds are tracking conventionally and if she thinks organic growers should watch and follow the conventional markets. Kelle answers that organic markets do not track close enough to conventional to help make buy, sell, and hold decisions. She adds that the prices of organics are independently volatile. However, she does believe it’s important to track both organic and conventional markets because more and more businesses throughout the supply chain have a hand in both markets.
Finally, the three discuss if the impending fertilizer shortage will have an impact on the organic food market. Kelle explains that organic farming has a lower input cost even in a normal year where fertilizer prices aren’t off the charts. She’s not sure if farmers will switch from conventional to organic due to a one-year run-up in input costs as there’s a lot of factors that go into organic farming, such as increased labor, finding a buyer, crop rotation, etc.
This episode covered a lot of ground, so make sure to listen to the entire episode on Spotify or in the Apple Podcasts App! While you’re there, don’t forget to subscribe. Also, feel free to reach out to us by email at email@example.com with any discussion topics, questions, comments, or overall feedback; Ryan and Kristyn would love to hear from you!