TRENDS in CALIFORNIA

ORGANIC

AGRICULTURE

TRENDS in CALIFORNIA

ORGANIC

AGRICULTUREKaren KlonskyKaren Klonsky

Dept. of Ag. & Resource Economics

University of California, Davis

Karen KlonskyKaren KlonskyDept. of Ag. & Resource

EconomicsUniversity of California, Davis

$555$555 BBILLION ILLION US FUS FOOD OOD MMARKET ARKET inin 20032003

$555$555 BBILLION ILLION US FUS FOOD OOD MMARKET ARKET inin 20032003

1.9% organic food1.9% organic food

98.2% 98.2% non organicnon organic

Source: Nutrition Business Source: Nutrition Business JournalJournal

US RUS RETAILETAIL S SALES OF ALES OF OORGANIC RGANIC FFOODOOD

$10.4 Billion$10.4 Billion in in 20032003

484

229

75

4,336

1,581

1,385

1,326

966

Fruits & vegetables

Nondairy beverages

Dairy products

Packaged foods

Bread & grains

Snack foods

Sauces Condiments

Meat Fish Poultry

Million dollars

Source: Organic Trade Association’s 2004 Manufacturer SurveySource: Organic Trade Association’s 2004 Manufacturer Survey

US RUS RETAILETAIL S SALES OF ALES OF OORGANIC RGANIC FFOODOOD

Per Cent Growth in Per Cent Growth in 20032003

30

24

79

20

19

20

16

23

Fruits & vegetables

Nondairy beverages

Dairy products

Packaged foods

Bread & grains

Snack foods

Sauces Condiments

Meat Fish Poultry

Million dollars

Source: Organic Trade Association’s 2004 Manufacturer SurveySource: Organic Trade Association’s 2004 Manufacturer Survey

USUS OORGANIC RGANIC FFRUIT RUIT andand VVEGETABLES EGETABLES $4.3 billion in retail sales - 2003$4.3 billion in retail sales - 2003

USUS OORGANIC RGANIC FFRUIT RUIT andand VVEGETABLES EGETABLES $4.3 billion in retail sales - 2003$4.3 billion in retail sales - 2003

Fresh $4.0 billion

Dried $58 milFrozen $149 mil

Canned $110 mil

Source: Organic Trade Association’s 2004 Manufacturer SurveySource: Organic Trade Association’s 2004 Manufacturer Survey

USUS OORGANIC RGANIC FFRUIT RUIT andand VVEGETABLES EGETABLES

PPENETRATION ENETRATION 1997 - 20031997 - 2003USUS OORGANIC RGANIC FFRUIT RUIT andand VVEGETABLES EGETABLES

PPENETRATION ENETRATION 1997 - 20031997 - 2003

0

1

2

3

4

5

97 98 99 '00 '01 '02 '03

Source: Organic Trade Association’s 2004 Manufacturer SurveySource: Organic Trade Association’s 2004 Manufacturer Survey

USUS CCERTIFIED ERTIFIED OORGANIC RGANIC AACREAGE CREAGE byby CCATEGORY, ATEGORY, 20032003

Field crops & hay47%

Fruit4%

Pasture34%

Fallow4%

Vegetables4%

Other7%

Source: Economic Research Service, USDASource: Economic Research Service, USDA

CACA PPERCENTAGE ERCENTAGE ofof USUS CCERTIFIED ERTIFIED

OORGANIC RGANIC AACREAGE, CREAGE, 20012001

73

50

1

23

All organicacreage

Field crops& hay

Fruits &vegetables

Pasture Other

CA %

of U

S a

creage

Source: Economic Research Service, USDASource: Economic Research Service, USDA

CA 163,158 acres, US 2,343,924 acresCA 163,158 acres, US 2,343,924 acres

USUS CCERTIFIED ERTIFIED OORGANIC RGANIC VVEGETABLE EGETABLE

AACREAGE CREAGE byby SSTATE, TATE, 20032003

3,58611,420 7,415

26,026

48,447

9,343

9,555

17,020

18,111

262

462367

0

20,000

40,000

60,000

80,000

Tomatoes Lettuce Carrots Other Total

Other

Oregon

Washington

California

Source: Economic Research Service, USDASource: Economic Research Service, USDA

78,905

AACRESCRES OFOF CACA OORGANIC RGANIC CCOMMODITIES OMMODITIES 2003 – 172,2332003 – 172,233 AACRESCRES

0

50

100

150

200

1992 1994 1996 1998 2000 2002

1,0

00 A

cres

Nursery &flowers

livestock, poultry& products

Vegetables

field crops

fruit & nuts

Source: CDFA Organic Source: CDFA Organic ProgramProgram

SSALES ALES OFOF OORGANIC RGANIC CCOMMODITIES OMMODITIES 2003 SALES - $330 MILLION2003 SALES - $330 MILLION

0

100

200

300

400

1992 1994 1996 1998 2000 2002

$ M

ILLIO

N

Nursery &flowers

livestock, poultry& products

Vegetables

field crops

fruit & nuts

Source: CDFA Organic Source: CDFA Organic ProgramProgram

PPERER C CENTENT C CASH ASH IINCOME NCOME byby

CCOMMODITY OMMODITY GGROUP, ROUP, CACA 20032003CommodityCommodity

GroupGroup% of all % of all

CA salesCA sales% of CA % of CA

organic organic salessales

Organic Organic as % of as % of

CACA

Field cropsField crops 9%9% 5%5% .6%.6%

Fruit and nut Fruit and nut cropscrops

2727 3535 1.51.5

Nursery, Nursery, greenhouse & greenhouse & floriculturefloriculture

1111 22 .3.3

Vegetable cropsVegetable crops 2424 4646 2.22.2

Livestock, Livestock, poultry, and poultry, and productsproducts

2424 1212 .6.6

NNUMBERUMBER OF OF CACA OORGANIC RGANIC GGROWERSROWERS2003 – 1,765 GROWERS*2003 – 1,765 GROWERS*

0

500

1,000

1,500

2,000

1992 1994 1996 1998 2000 2002

Total

fruit & nuts

Vegetables

field crops

Nursery &flowerslivestock,poultry

Source: CDFA Organic Source: CDFA Organic ProgramProgram

* Excludes registered growers reporting no sales

IINDEX NDEX NNUMBERS UMBERS ofof GGROWTH ROWTH inin

CA OCA ORGANIC RGANIC AAG, G, 1992 - 20031992 - 2003

0

100

200

300

400

500

1992 1994 1996 1998 2000 2002

AcresSalesGrowers

SSALES ALES ofof TTOP OP 1010 OORGANIC RGANIC

CCOMMODITIES, OMMODITIES, CACA 20032003RankRank CommodityCommodity Sales $ Sales $

millionmillion% of % of organicorganic

% of CA % of CA totaltotal

11 LettucesLettuces $41$41 11.7%11.7% 2%2%

22 GrapesGrapes 2626 7.47.4 11

33 DairyDairy 2323 6.86.8 .5.5

44 CarrotsCarrots 1919 5.45.4 44

55 StrawberryStrawberry 1818 5.15.1 22

66 Tomato - allTomato - all 1111 3.33.3 11

77 Chicken Chicken (meat)(meat)

1111 3.33.3 22

88 SpinachSpinach 1111 3.13.1 77

99 RiceRice 99 2.62.6 22

1010 AlmondAlmond 66 1.91.9 .4.4

AACRESCRES OFOF CACA OORGANIC RGANIC CCOMMODITIES OMMODITIES 2003 – 172,2332003 – 172,233 AACRESCRES

Vegetables26%

fruit & nuts27%

livestock, poultry & products

8%

Nursery & flowers

0%

field crops39%

Source: CDFA Organic Source: CDFA Organic ProgramProgram

CACA OORGANIC RGANIC GGROWERS ROWERS 2003 – 1,7652003 – 1,765

field crops11%

fruit & nuts55%

nursery & flowers

8%

livestock & poultry

3%

vegetables23%

Source: CDFA Organic Source: CDFA Organic ProgramProgram

CACA OORGANIC RGANIC SSALESALES

2003 – $330 2003 – $330 MMILLIONILLION

Vegetables47%

fruit & nuts36%

livestock, poultry & products

10%

Nursery & flowers

2%

field crops5%

Source: CDFA Organic Source: CDFA Organic ProgramProgram

OORGANIC RGANIC VVEGETABLE EGETABLE CCROPSROPS

CACA 20032003

NumberNumber % of CA % of CA VeggiesVeggies

% of % of OrganicOrganic

AcresAcres 44,50044,500 2.32.3 26%26%

GrowersGrowers 521521 2.2*2.2* 23%23%

Sales Sales $155 million$155 million 2.22.2 47%47%

* Organic as percentage of all CA farms, not just vegetables* Organic as percentage of all CA farms, not just vegetables

IINCOMENCOME C CONCENTRATIONONCENTRATION inin CA OCA ORGANICRGANIC A AGG, 2003, 2003

36

9

24

10 106 3 41 1 3 4

11 12

60

9

$0-$4,999 $5,000-$9,999

$10,000-$49,999

$50,000-$99,999

$100,000-$249,999

$250,000-$499,000

$500,000-$999,999

$1,000,000and above

Per

cen

t o

f T

ota

l Growers Sales

OOVERALL VERALL TTRENDSRENDS

Organic sales in CA are growing at Organic sales in CA are growing at double digit rates without an increase in double digit rates without an increase in the number of growers.the number of growers.

Vegetable crops and fruits dominate.Vegetable crops and fruits dominate.

Livestock and poultry sales are now Livestock and poultry sales are now growing at a faster rate than produce.growing at a faster rate than produce.

The National Organic Rule does not The National Organic Rule does not seem to have had a negative impact on seem to have had a negative impact on CA.CA.