As a boy in South Dakota, Cal Stengel grew up watching farmers spray their fields with chemicals like DDT, and apply huge amounts of chemical fertilizers. After a number of years, their shallow water table began to show harmful concentrations of nitrates, and local lakes were suffering algae blooms. "People on the farm, in the industry, have been thinking that nature is big enough to absorb whatever we put on it. If you look at it at one point in time, it might look that way, but it is the accumulating, compounding effect that we are realizing now."

For the past 20 years, Cal has been doing his part to support the growth of an alternative to chemicals. As part owner of Stengel Seed and Grain, a certified organic seed-cleaning business, he is a vital link in the chain from grower to consumer that supports the organic industry. Cal is a specialty contractor for buyers of organic seeds and grains, including oil seeds (e.g. canola, safflower), grains for breads and cereals, a wide range of beans and other miscellaneous grains for very specialized niche markets. The company handles more than 80 varieties of organic seed, which makes their business extraordinarily complex - and profitable.

Cal is excited about what he sees happening in the market, but cautions growers to really understand what they are getting into. "The entire organic industry continues to grow each year. We are at the bottom end of a demand curve that will do nothing but increase as more and more people become concerned about the safety of the foods they are eating. Just look in the conventional grocery stores that never used to carry organics. It's in the aisles, in the produce section. It's not a fad. It's a long-term market trend with great potential for small farms."

"The trouble with the organic industry," he goes on to say, "is there are no hard and fast rules like in conventional markets. This works for us, and against us. It offers higher margins, and a more personal feel to growing and selling your grains. In some cases you can follow your grain right to the store where it's selling and say, 'This is my grain.' The whole relationship between the grower and the end user is more rewarding."

"However, there are very rarely any formal agreements between the buyers and sellers of grain. There is a lot of diversity in the industry, which makes it complicated and unpredictable. Growers need to understand what happens to their grain after it leaves the farm. Who is handling it? Who is making decisions? Where and how is their grain moving about?"

Cal's advice is well-founded. He has managed transactions between several hundred organic growers and more than 2 dozen organic food companies, sourcing from 10 states and provinces and exporting to more than a dozen countries. "As the middleman between farmer and buyer, I try to get the best deal for both of them and keep them honest with each other."

"I want to offer farmers a 'heads-up.' If they are prepared, informed and flexible going into a transaction, everyone can win. But a lot can go wrong. If they know the right questions to ask when they sell their grain, and they understand how their grain will be used, there will be fewer surprises when they receive payment."

In Cal's's opinion, terms of payment are the first questions a grower should settle - when they will get paid for the grain, how they will get paid. Most buyers pay within 30 days, and shorter turn arounds can be negotiated. Some buyers are notorious for not paying their bills, and these should be avoided. Growers need to seek this information out by talking to other growers, asking the buyer for credit references, and checking them out. Don't be afraid to ask a buyer directly, "Do you usually pay on time, or are you delinquent? What is your current status with payment?" Any reputable firm will be up front and honest.

Another key set of questions revolves around the cleaning process itself. Premium markets for certified organic grain usually demand a shipment to be 99.9% clean - free of weed seeds, sticks, stones and other impurities. Because it is so difficult to separate out the last 1% of the impurities, the cleaner may have to waste 10% of the grain; this is referred to as dockage. In some cases, the good grain that comes out is credited back to the grower; this should be understood up front. How is dockage handled, and if it is credited, how? Most importantly, what is the company's rejection policy?

"The worst case scenario," Cal warns "is when the grain has left the farm, been shipped over 2000 miles to a buyer, and then the buyer rejects the load and refuses payment.That has happened to 95% of organic growers I know at least once. Others can expect the same, unless they take heed of the warnings and get more information."

The buyers' main concern is to ensure a supply of clean, dry, premium product that is free of bugs and contamination. Growers need to pay attention to the specifications and expectations of the buyers for the grains they buy. Once the grower understands what the buyer expects, it is his or her responsibility to meet the specifications. Each transaction, each buyer will be different, so ask a lot of questions.

Cal suggests that building flexibility into operations is a key strategy for growers selling to specialty grain markets. "Grow a diversity of crops, and have a storage system in place to hold your grain. Storage gives you the flexibility to hold the grain until you can get a better price, or sell to someone who you can be confident about. The premium prices available from specialty organic markets can make a small farm profitable, but it takes a lot more effort than commodities do - more paperwork, phone calls to get quotes, work preparing and sending off samples, lining up small deals and hauling special loads. But its worth it."

"Organic and specialty markets have had a positive impact on many farms, improved their cashflow and their ability to manage and maintain their farms. I don't want to promise that it can save every family farm, but it is a well-defined, commercially viable niche market that holds excellent potential. Some of the more specialized grains offer a further niche within a niche that growers can experiment with on a small acreage. Even a few acres may pay off in the long run with higher income."

Cal Stengel
584 Loomis Trail Road
Linden, WA 98264
Tel: (360) 318-0511

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