The Organic Trade Association reports that the most recent available numbers on retail sales of organic food totaled $32.3 billion in 2013. And a colleague that I worked with in the past noted that this is more than the farm gate sales of all the corn and soybeans produced in Iowa in 2014. Even if we use high-water mark prices from 2012/2013 of $8 per bushel for corn and $14 per bushel for soybeans, the Iowa corn (2.3674 billion bushels) and bean (505.73 million bushels) total farm gate sales would be only $26 billion.
What this shows is how big the sales are for foods sold as organic, whether they all are actually certified organic or not, by using a comparison in size that farmers and their advisors can easily wrap their heads around.
The total retail numbers have little to do with farmer income because we all know that farm gate market share for both organic and conventional farmer production is less than 10 percent of the total food dollar spent. Some organic, specialty farmers are earning a bigger share of that food dollar by performing some processing and packaging before their products leave the farm. And a higher per unit price for organic crops at the consumer level also means a higher income per unit sold by the farmer
Jim Porterfield, CCA, Ideal Soil Consultant, watershed/water quality specialist, is the one who noted what he has seen in organic sales and increasing farmer interest in growing organic and lower cash input crops. He is intrigued about the organic market from looking at prices in the grocery store and attendance by farmers at various conferences.
He noted how a small package of organic raspberries can sell for $5 to $6 per package and organic grass-fed hamburger can sell for $8 to $10 per pound. While $32.3 billion in organic sales would buy a lot more conventionally grown foods, consumers are voting with their pocketbooks.
The biggest farmer question is what they can earn growing organics, although there are other factors under consideration. Farmers are investigating the situation now more than ever before. Porterfield noted that 800 farmers showed up at the Missouri Organic Conference in 2015 compared to 400 attendees in 2014. Additionally, Porterfield reported that in January more than 240 farmers showed up (standing room only) at AgriEnergy Resources conference in Bloomington, Ill.; about 100 farmers attended a meeting in Bluffton, Ind.; approximately 75 attended an Advancing Eco Agriculture meeting in Atlanta, Ind.; and more than 3,800 attended the Midwest Organic and Sustainable Extension Service (M.O.S.E.S.) Conference in LaCrosse, Wis.
“A lot of these attendees are conventional farmers who five to 10 years ago would not have been caught dead at one of these meetings,” Porterfield said. In talking to some of the attendees, he discovered discontent with growing conventional crops including:
- Conventional crop yields have been relatively flat for more than a decade.
- Weeds have become resistant requiring multiple herbicides and application passes, which has raised the cost of inputs.
- Company claims for the need to use more fungicides compared to the past is also increasing input costs.
- Health concerns related to chemical use.
- Need for controlling water pollution including nitrate runoff, with specific concern being algae blooms in water and lawsuits for nitrates coming from field drainage.
But probably most of all, as I noted earlier, farmers are investigating if they can make equal or more money growing organic crops. If yield isn’t compromised dramatically and labor isn’t increased outrageously to grow a crop, then there are farmers ready to switch.
As Porterfield calculated, a 20 cent per bushel farm gate premium for non-GMO corn is a 5 percent increase in income compared to a conventional corn market price of $3.68 per bushel. However, a 225 bushel-per-acre yellow corn crop selling at $3.68 per bushel would be income equivalent to only a 55 bushel-per-acre certified organic blue corn harvest sold by a farmer for $15.00 per bushel, and in actuality, it wouldn’t be uncommon for blue corn to yield more than 100 bushels per acre.
The USDA Food Dollar report can be seen by clicking here.