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The Center for Rural Affairs, a private, non-profit organization, is working to strengthen small businesses, family farms and ranches, and rural communities. Permission to reprint items from this web log is hereby granted, on the condition that clear credit is given to the original source of the material. If the blog provides information for a story, please let us know by sending an email to johnc@cfra.org.

Thursday, July 13, 2006

Demand for Organic Food Outstrips Supply

Demand for Organic Food Outstrips Supply

WASHINGTON, July 6, 2006

by Libby Quaid, Associated Press

America's appetite for organic food is so strong that supply just can't keep up with demand. Organic products still have only a tiny slice, about 2.5 percent, of the nation's food market. But the slice is expanding at a feverish pace.

Growth in sales of organic food has been 15 percent to 21 percent each year, compared with 2 percent to 4 percent for total food sales.

Organic means food is grown without bug killer, fertilizer, hormones, antibiotics or biotechnology.Mainstream supermarkets, eyeing the success of organic retailers such as Whole Foods, have rushed to meet demand. The Kroger Co., Safeway Inc. and SuperValu Inc., which owns Albertson's LLC, are among those selling their own organic brands. Wal-Mart Stores Inc. said earlier this year it would double its organic offerings.

The number of organic farms - an estimated 10,000 - is also increasing, but not fast enough. As a result, organic manufacturers are looking for ingredients outside the United States in places like Europe, Bolivia, Venezuela and South Africa.

That is no surprise, said Barbara Robinson, head of the Agriculture Department's National Organic Program. The program provides the round, green "USDA Organic" seal for certified products.

Her agency is just now starting to track organic data, but Robinson believes the United States is importing far more organic food than it exports. That's true of conventional food, too.

"That is how you stimulate growth, is imports generally," she said. "Your own industry says we're tired of importing this; why should I pay for imports when I could start producing myself?"

"We're doing a lot of scrambling," said Sheryl O'Loughlin, CEO of Clif Bar Inc. "We have gotten to the point now where we know we can get a call for any ingredient.

"The makers of the high-energy, eat-and-run Clif Bar needed 85,000 pounds of almonds, and they had to be organic. But the nation's organic almond crop was spoken for. Eventually, Clif Bar found the almonds - in Spain. But more shortages have popped up: apricots and blueberries, cashews and hazelnuts, brown rice syrup and oats.

Even Stonyfield Farm, an organic pioneer in the United States, is pursuing a foreign supplier; Stonyfield is working on a deal to import milk powder from New Zealand."

I'm not suggesting we would be importing from all these places," said Gary Hirshberg, president and CEO of Stonyfield Farm Inc. "But for transition purposes, to help organic supply to keep up with the nation's growing hunger, these countries have to be considered."

The dilemma of how to fill the gap between organic supply and demand is part of a long-running debate within America's booming organic industry. For many enthusiasts, organic is about more than the food on their plates; it's a way to improve the environment where they live and help keep small-scale farmers in business.

"If organic is something created in the image of sustainable agriculture, we certainly haven't accomplished that yet," said Urvashi Rangan, a scientist for Consumers Union. "What people do have to understand is if that stuff comes in from overseas, and it's got an organic label on it, it had to meet USDA standards in order to get here."

The issue causes mixed feelings for Travis Forgues, an organic dairy farmer in Vermont.

"I don't like the idea of it coming in from out of this country, but I don't want them to stop growing organic because of that," Forgues said. "I want people to say, `Let's do that here, give a farmer another avenue to make a livable wage.'"

A member of the farmer-owned Organic Valley cooperative, Forgues got his dairy farm certified nearly 10 years ago. Organic Valley supplies milk to Stonyfield.

Switching to organic is a difficult proposition. Vegetable grower Scott Woodard is learning through trial and error on his Putnam Valley, N.Y., farm. One costly mistake: Conventional farmers can plant seeds when they want and use pesticides to kill hungry insect larvae. If Woodard had waited three weeks to plant, the bugs that ate his seeds would have hatched and left. Organic seeds can be double the price of conventional.

"There's not a lot of information out there," Woodard said. "We try to do the best we can. Sometimes it's too late, but then we learn for next time."

Stonyfield and Organic Valley are working to increase the number of organic farms, paying farmers to help them switch or boost production. Stonyfield, together with farmer-owned cooperative Organic Valley, expects to spend around $2 million on incentives and technical help in 2006, Hirshberg said.

Other companies offer similar help. And the industry's Organic Trade Association is trying to become more of a resource for individual farmers.

Caren Wilcox, the group's executive director, described how an Illinois farmer showed up in May at an industry show in Chicago."

He said, `I want to get certified. Help me,'" Wilcox said. "It was a smart thing to do, but the fact that he had to get into his car and go down to McCormick Center says something about the availability of information."

In the meantime, manufacturers like Clif Bar and Stonyfield still prefer to buy organic ingredients, wherever they come from, instead of conventional crops in the U.S."

Anybody who's helping to take toxins out of the biosphere and use less poisonous chemicals in agriculture is a hero of mine," Hirshberg said. "There's enormous opportunity here for everybody to win, large and small."

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

2 Comments:

  • At 5:40 PM, Blogger Rjest said…

    Can you explain what you mean by demand outstripping supply? I thought that demand and supply were brought into equilibrium by a mechanism known as the price. If demand goes up it does not outstrip supply, whatever that means, but it will lead to the price going up and thus the equilibrium is restored.

     
  • At 9:16 PM, Anonymous Anonymous said…

    hey Rjest, perhaps you should add this into your economics 101 model

    food doesn't magically appear on grocery store shelves at night while the store is close (created by little Keebler elves)

    it actually takes time to raise crops and livestock
    cows have one calf per year
    pigs gestate for just shy of 5 months
    crops take 5 or 6 months from planting to harvest
    likewise most produce takes months to grow
    some fruit bearing trees takes several years to come into producition

    and, to further complicate your rather condescendingly stated economic theory, organic certification does not simply occur with the wave of a magic wand

    it takes three years to certify land for organic production - no short cuts, three years, it can actually take longer in some circumstances, but no less than three years

    so, the author meant what she said, organic demand is risely sharply and there is not enough production to meet that demand, therefore, demand for organic food is outstripping supply

    btw, to outstrip means to exceed, or surpass (it's in the the dictionary)

    sorry, but widgets are not food

     

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