Consumer appetite for organic foods reached $13.4bn in the US last year – so why is only 1% of the country’s cropland dedicated to organic farming?

EXCERPT: Food companies such as General Mills and Kashi, the cereal maker owned by Kellogg’s, believe that more farmers would switch to organic if they could get financial help during the three-year transitional period. General Mills, maker of Cheerios and Yoplait yogurts, announced a plan with dairy cooperative Organic Valley last month to accomplish that.
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American farmers are struggling to feed the country's appetite for organic food

Leah Messinger
The Guardian, 19 July 2016
https://www.theguardian.com/sustainable-business/2016/jul/19/organic-food-certification-struggling-farmers?CMP=share_btn_tw

* Consumer appetite for organic foods reached $13.4bn in the US last year – so why is only 1% of the country’s cropland dedicated to organic farming?

Marc Garibaldi, a farmer in California’s Central Valley, no longer uses conventional pesticides and fertilizers because he doesn’t want to work with toxic chemicals at his 40-acre cherry orchard. His farm was officially certified as organic a few weeks ago, but the path to securing that designation was long and costly: he spent three years working to demonstrate the use of eco-friendly pest and soil management practices and paid between 10%-20% in higher labor cost.

Yet he was unable to convince processors that pack and ship his harvest to pay more for his fruit – which he was already cultivating by using the organic standards set by the federal government – during that period.

“Your farm is your financial life, and when you decide you’re going to change the way you’re doing your business, you’re kind of putting it at risk,” Garibaldi said of the challenge of making the transition to organic. “The grocery stores don’t give a crap whether you’re in the transition to being organic. All they care about is are you certified or not.”

The time and expenses required to get organic certification present major roadblocks for increasing the amount of organic farmland in America. It’s a problem not just for farmers but for food companies that are trying to meet an increasing consumer demand for organic products. The concern for a shortage of organic produce and ingredients is so acute that several corporate businesses and nonprofits launched new efforts recently to give growers better incentives to go organic.

“When you look at the percentage of the marketplace, what consumers are buying versus what farmers are producing, farmers aren’t producing as much organic as consumers are consuming,” said Alexis-Badden Mayer, political director of the Organic Consumers Association, an organics advocacy group.

The US Department of Agriculture estimated that only roughly 1% of the cropland nationwide met that designation. Yet consumer appetite for organic cereal, yogurt and other packaged organic products has grown, reaching an estimated $13.4bn in the US last year from $12.8bn in 2014, according to research group Euromonitor.

Carrots, lettuce, and apples make up the top categories of organically grown produce, according to Catherine Greene, an agricultural economist with the USDA’s economic research service. Dairy comes in second, with organic corn and soybeans making up just 0.2% and 0.3% of domestic production in 2011.

The USDA, which sets the organic standards for certification by public and private organizations, requires farmers to show their changing practices by foregoing the use of prohibited products, such as certain synthetic pesticides, for three years. This time frame allows the changes in the chemical and biological properties of the soil to take root. During this transitional period, farmers can already be growing fruits and vegetables organically, but they cannot increase the prices to the levels commanded by harvests from certified farms.

Food companies such as General Mills and Kashi, the cereal maker owned by Kellogg’s, believe that more farmers would switch to organic if they could get financial help during the three-year transitional period.

General Mills, maker of Cheerios and Yoplait yogurts, announced a plan with dairy cooperative Organic Valley last month to accomplish that. General Mills agreed to pay a higher-than-market price for the organic milk it’s been purchasing, and that markup goes into a fund for the expenses accumulated by farmers to transition to organic. General Mills declined to disclose the terms of the agreement, which it expects to help 20 farms add 3,000 acres of pastures for organic milk production.

“What we can do by partnering with Organic Valley is making sure the economic engine is there to pull the train,” said John Foraker, the president of General Mills-owned Annie’s, which makes boxed macaroni and cheese, snacks, cereals and other products targeted at children.

Foraker said he has experienced firsthand shortages in the supply chain, especially over the last five to seven years as the demand for organics has exploded. A few years ago, organic cornstarch became difficult to find. The product, “which you took for granted as being a non-issue, all of a sudden it’s in short supply and you can’t figure out why,” Foraker said.

General Mills, which is aiming for an additional 250,000 acres of organic farms from its suppliers by 2019 – more than double its current amount – is developing additional partnerships with farmers, Foraker said. The company says it is one of the five largest buyers of organic ingredients in North America.

Another effort to encourage more organic planting involves creating a new certification that recognizes the organic farming practices being used during the three-year transitional period. Backers of this idea hope that the new certification would empower growers to negotiate higher prices during this time to help offset the increasing expenses.

The USDA hasn’t issued any standard for transitional organic farming, though that hasn’t stopped certifying groups from creating their own. One such effort comes from the Organic Trade Association, which submitted a proposal to the USDA in mid-May to request guidelines for creating a transitional crop certificate. The certification would cover the second and third year of the organic certification process and hopefully enable farmers to raise the prices of their crops.

“We see it as a tool in a toolbox for helping producers get into organics,” said Nate Lewis, a senior crops and livestock specialist with the Organic Trade Association, who is leading the group’s transition certification program. Lewis said he anticipated a response from the USDA over the summer.

Several other organizations are already developing their own transitional organic standards, though those programs aren’t national. California Certified Organic Farmers and government agencies such as the Washington State Department of Agriculture currently offer transitional certification.

Kashi is supporting the transitional organic certification issued by Quality Assurance International, a private certifying organization. The cereal maker is paying a slight premium for red winter wheat certified by the group and grown by South Dakota-based farming company Hesco. It’s also promoting the certification with a “ made with transitional wheat” tagline for the packaging of a new cereal that it rolled out in May.

Kashi hopes its support of the transitional organic standard will nudge more farmers to make the switch to organic. The cereal maker is particularly interested in boosting the amount of organic almonds that comes to the market, a spokesperson said.

This may come as good news to Garibaldi, who is one year into transitioning 140 acres of almonds and walnuts to organic. Unlike his cherry distributors, Garibaldi said nut processors seem more open to paying more for transitional products.

“Buyers have expressed to us that they would purchase transitional products as a way or as a vehicle to secure or lock in certified organic product once it becomes certified,” Garibaldi said.