Super high demand for organic produce across USA means an agricultural goldmine for farmers willing to go organic

Sunday, July 24, 2016 by: David Gutierrez, staff writer
Tags: organic food, market demand, shortage

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(NaturalNews) Consumer demand for organic foods has surged to such a degree that farmers can't grow enough to keep up with it.

"When you look at the percentage of the marketplace, what consumers are buying versus what farmers are producing, farmers aren't producing as much organic as consumers are consuming," said Alexis-Badden Mayer of the Organic Consumers Association.

Between 2014 and 2015, the amount consumers spent on packaged organic foods climbed from $12.8 billion to $13.4 billion. Yet, the proportion of U.S. cropland dedicated to organic production is still just 1 percent.

This means that producers of packaged organic foods are also experiencing shortages of basic ingredients.

Enormous demand leads to shortages

John Foraker, the president of Annie's Homegrown (owned by General Mills), said that over the past five to seven years his company has regularly experienced supply chain shortages. A few years, ago, for example, organic cornstarch – "which you took for granted" – became incredibly hard to find.

"All of a sudden it's in short supply and you can't figure out why," Foraker said.

In order to combat this problem, several food giants are actually offering monetary incentives to encourage more farmers to go organic.

According to industry observers, many more farmers would like to convert their farms to organic than are actually doing so, for one main reason: cost. While organic agriculture is actually more profitable, yielding higher prices, the time and expenses associated with achieving organic certification add up quickly.

One of the largest financial costs of organic certification is the U.S. Department of Agriculture's requirement that a farm be free of prohibited chemicals for three years before receiving certification. The rationale behind this is that it takes several years for the biochemistry of soil to recover after years of intensive chemical abuse.

The problem is that for those three years, farmers are bearing the costs of a transition to a different farming method, but are not yet able to get the higher prices commanded by an organic label. The prospect of this three-year transition prevents many farmers from making the switch.

Big Organics pushing growth

Large food companies such as General Mills and Kashi (owned by Kellogg's) are trying to incentivize more farmers to switch to organic. Thus, General Mills recently announced a plan to purchase organic milk from the Organic Valley cooperative at a higher-than-market price, on the condition that Organic Valley puts the extra proceeds into a fund to help defray costs for dairy farmers making the shift to organic. General Mills said that it expects the deal to add 3,000 acres of dairy pasture to 20 organic farms.

"What we can do by partnering with Organic Valley is making sure the economic engine is there to pull the train," Foraker said.

General Mills is also pursuing other farmer partnership programs designed to add an extra 250,000 acres of organic farmland by 2019. One program involves developing a certification for transitional farms, which would ideally allow farmers making the organic switch to charge a partial markup during the three-year period.

Other groups, such as California Certified Organic Farmers, the Washington State Department of Agriculture and Quality Assurance International (QAI), already offer transitional certificates. The Organic Trade Association is also working on developing one.

Kashi is promoting the QAI certificate by paying higher-than-market rates for red winter wheat bearing the label, and adding a "made with transitional wheat" seal to cereals made with the product.

The most widely grown organic products in the United States are carrots, lettuce and apples, closely followed by dairy. Corn and soybeans – the most common genetically modified crops – account for only 0.2 percent and 0.3 percent of organic production, respectively.

Sources for this article include:

TheGuardian.com