Walk into a grocery store these days and you’re likely to find whole sections devoted to organic foods. The organic label gives insight into how the food was produced, usually without the aid of synthetic chemicals, antibiotics and food additives.
Since 2002, when the U.S. Department of Agriculture established national standards for organic food production, a steady stream of farmers have switched to organic methods to meet the growing demand for organic foods. Some states have doubled their number of organic crop acres since the late 90s. In Missouri alone, acreage of organic crops has increased six-fold in the past 15 years.
And there’s big money to be made in this not-so-niche market. A recent report from the USDA estimates that U.S. organic food sales were $28 billion in 2012, up 11 percent from 2011. Farmers and processors are able to mark up organic products, as consumers are willing to pay more for foods with an organic label.
“Overall, we’re still seeing a lot of positive growth in the organics sector,” said Cathy Greene, an economist with the USDA’s Economic Research Service. That includes milk, dairy products, fresh fruits and vegetables, even some non-food products like laundry detergent with organic coconut oil and aloe vera.
What started as a niche market has quickly grown beyond that, Greene says. And, she added, consumers in Europe and Japan are increasingly demanding organic foods too.
But there are still problems within the organics sector. There is still price volatility for producers who export some organic products overseas. From 2011 to 2012 export values for grapes and cherries plummeted while other fruits and vegetables increased in value.
There’s a big gap, too, in which crops farmers are interested in certifying as organic.
“I guess what we haven’t seen quite as much of is interest in the commodity crop sector: corn, soybeans, cotton,” Greene said.
That lack of interest translates into a supply shortage for organic meat producers, who depend on farmers who grow organic corn and other feed.
But with all the momentum within the organic marketplace, don’t expect to see that section of the grocery store start shrinking any time soon.
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