Organic Production andHorticulture AEC 317 Fall 2014

Organic Produce Markets Initially grass roots program Movement toward commercialization led to

state-by-state certification Flexible to growing region But variable standards across states Cap on market scale Push by national and regional retailers for

universal standards 2002 USDA National Organic Standards

adopted

The USDA Program

http://www.ams.usda.gov/AMSv1.0/nop

Inputs and practices governed by National Organic Standards Board

Limits pesticides, fertilizers, no genetically engineered products

Third party certification and enforcement

Unlawful to wrongfully use term “organic” without certification

Farm Bill Spending to Support Organic Agriculture

Source: USDA Organic Agriculture

Organic Food Growth in U.S. Markets

Broader interest in organic food 20% annual growth for last 10 years

$6.1 B in 2000 $14 B 2005 $21 B 2008 $24.8 B in 2009 $26.7 B in 2010 $29.2 B in 2011 $32.3 B in 2013

Organic food sales channels (08/10): 47%/54% Conventional Supermarkets 44%/40% Natural Food Stores 9%/6% Direct MarketedSources: Dimitri & Greene, 2002; USDA ERS-Oberholtzer, Dimitri & Greene, 2005; Organic Trade Assoc., 2004; Tondel & Woods, 2006; Greene et al 2009; Greene at al, 2010, Food Facts – Organic Trade Assoc. June, 2010.

Sales of Organic Products in U.S. 2013

Organic Trade Association Press Release, May, 2014

Other quick facts In 2010, U.S. surpassed the European Union as the largest

market for organic products in the world. Organic food and beverages represents 4% of all U.S. food

and beverage sales (2013) Gross retail food sales in U.S., all foods, $760 B

Organic food/beverage comprises 92% of sale of all organic products (cotton, pet food, hay, etc.)

Organic trends Fresh produce accounts for 42%/38% of all organic food

sales - - about 10% of all produce sales in U.S. are organic.

1/3 of organic produce sold under contract

Trend towards larger growers & direct to retailer sales

Still tiny in KY: 111 farms (all products)

State trade association: Organic Association of Kentucky

Organic Trade Association http://www.ota.com/

USDA Programs in Organic/Sustainable Ag Sustainable Ag Research and Education Profit, stewardship, quality of life

Some of the Issues1. International growth and marketing of organic – what are

the standards?: Equivalency agreements2. Expansion of GMO production: Industry pushes for

mandatory GMO labeling3. Scale production economies lower costs, but also premiums4. Growth in other eco-labels