Overview of the Organic Farming Industry - Jeanine Davis Department of Horticultural Science North Carolina State University
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Overview of the
Organic Farming Industry
Jeanine Davis
Department of Horticultural Science
North Carolina State University
Modern organic agriculture
is not reverting to “the old
ways” or just growing
crops without chemical
fertilizers and pesticides.
Photos from UNC-A library and NCDA & CS websites
Definition of
Organic
Agriculture
Organic agriculture is a production system that
sustains the health of soils, ecosystems and people. It
relies on ecological processes, biodiversity and
cycles adapted to local conditions, rather than the use
of inputs with adverse effects. Organic agriculture
combines tradition, innovation and science to benefit
the shared environment and promote fair
relationships and a good quality of life for all involved.
Definition by IFOAM (International Federation of Organic Agriculture Movements)
Modern Organic Agriculture
• Is deliberate.
• Makes use of latest scientific advances
and modern technology.
• Is sustainable for the land AND the
farmer.
Photo from Eastern Carolina Organics website
Organic Agriculture is Used
Around the World
Organic agriculture
is practiced in 160
countries and 37.2
million hectares of
agricultural land are
managed organically
by 1.8 million
farmers.
Data from IFOAM website and photo from @ Ian Britton - FreeFoto.com
Organic Agriculture is Big
Business Globally
The global sales of
organic food and
drink reached 54.9
billion US dollars in
2009.
Let’s briefly review the history of modern organic agriculture
Transition to
Synthetics-Fertilizer
• 1843- 1st superphosphate fertilizer factory, England.
• 1861-K fertilizer industry started in Germany.
• 1903-1st synthetic N fertilizer was calcium nitrate,
made in Norway.
• 1913-1st ammonia fertilizer factory in Germany.
Photo from @ Ian Britton - FreeFoto.com
Transition to Synthetics-
Pest Control Products
• 1939-DDT insecticidal properties discovered.
• 1940’s & 1950’s”-aldrin, chlordane, parathion, 2,4-
D; hybrid seeds and the “Green Revolution”.
• 1962-Rachel Carson and “Silent Spring”.
• 1970’s and 1980’s-lower rate, more selective
products developed, but resistance developed.
• 1990’s to present-more selective products, lower
rates, less persistence, safer, more management
strategies, GMOs.
Graphic from Office.com
All that is “natural”
is not good!
• 15th century-arsenic, mercury and lead were used
to kill pests.
• 17th century-nicotine sulfate was extracted from
tobacco and used as an insecticide.
• Arsenic based products were dominant until the
1950s.
• Many scientists believe that even the early synthetic
pesticides, such as DDT, were safer for people,
animals, and the environment than arsenic.
Graphic from Office.comSome Pioneers of Modern
Organic Agriculture
• Rudolf Steiner, Austrian, introduced biodynamics in
1924; holistic, balanced.
• British botanist, Sir Albert Howard, father of
organic farming. 1940 book “Law of Return”-
recycling nutrients from plants and animals.
• Jerome Rodale started Organic Farming and
Gardening magazine in the U.S. in 1942.
• Rachel Carson published “Silent Spring” in 1962.
• Robert Rodale published “The Basic Book of
Organic Gardening” in 1971.
Photo of Rudolf Steiner from rudolfsteinerweb.comA little more history • 1980’s-organizations in different states developed standards and organic certification to protect the term. • Organic Foods Production Act was part of the 1990 Farm Bill. • USDA appointed the National Organic Standards Board (NOSB) to advise the USDA on developing national standards. • October 21, 2002 – the Final Rule was implemented.
• Known as NOP • If you call your products “organic” you must be certified by a third party certifying agent approved by the USDA. • If you sell under $5000 worth of organic product annually, you can be exempt from certification but must follow all the rules.
Certified
Organic
Standards
• Organic standards were not created
by scientists.
• They are changed and updated.
• There still is some difference in
interpretation between certifiers.Alabama
• First “organic” farms were established in the 1980s.
• Small group of committed farmers, but not a big
movement.
• More activity in recent years.
North Carolina
• Long history in organic agriculture.
• Carolina Farm Stewardship was established in 1979.
• Many farmers who were certified organic prior to 2002
are not anymore.
Graphics from Office.com2008 Census-Certified
Organic
(or exempt)
Alabama North Carolina
# farms 38 246
# acres 1,082 9,618
Total sales * $52,796,000
0-$9,999 in sales 100% 48%
$10,000-$49,999 20%
$50,000-$249,999 24%
$250,000 and up 22%
* Not revealed to protect respondent confidentiality
Photo from Office.comChange over the years
Alabama North Carolina
1997 cert. organic acres 1 980
2001 cert. organic acres 35 1,377
2008 cert. organic acres 1,082 9,618
Data from 2008 Census on Organic Agriculture Photo from Office.comCompared to
Other States
Lowest Alabama North Carolina Highest
# organic farms DE AL NC CA
8 8 246 2,714
# organic acres RI AL NC WY
205 1,082 9,618 677,147
Total organic DE, MS AL NC CA
sales * * $52,796,000 $1,148,650,000
Data from 2008 Census on Organic Agriculture
Graphic from Office.comDetails on Organic
Production in
Alabama and
North Carolina
Alabama North Carolina
Avg. production costs/acre in 2008 $5,740 $107,127
First point of sales: local 50% 64%
Farms that 50% or more of the net 6% 29%
household income come from organic
sales
Horticultural crop sales $20,402 $8,909,006
Field crop sales $928,971
These numbers do not add up to the total sales figures because of values not
reported to protect respondents’ confidentiality.
Data from 2008 Census on Organic Agriculture
Graphic from Office.comSo Where are We Now?
• What are the
trends?
• Where are the
opportunities?
• What are the
numbers?
Graphic from Office.comU.S. Consumer Sales of Organic
Foods & Beverages Grew 8% in 2010
Total U.S. food sales grew by less than 1%.
Data Source: Organic Trade Association, April 2011U.S. Consumer Sales of Organic
Foods & Beverages were Valued at
$27 billion in 2010
Data Source: Organic Trade Association, April 2011Organic Fruits and Vegetables in 2010 • Fresh fruit and vegetables made up 40% of those sales; $10.6 billion! • This segment experienced the most growth. • Now make up nearly 12% of all U.S fruit and vegetable sales. Date Source: Organic Trade Association, April 2011
Organic Dairy Sales
in 2010
• Organic dairy, the 2nd largest
category, experienced 9% growth.
• Now valued at $3.9 billion.
• Makes of 6% of the U.S. dairy product
market.
Graphic from Office.com Data source: Organic Trade Association, April 2011Organic Product
Purchasing
• For the third year in a row, 38%-39% of
US consumers purchased organic
products.
• More people are buying organics at
their regular supermarkets instead of
at natural food stores.
Graphic from Office.com Data source: TABS Group, Jan 2011In the Organic Non-food Sector: • Supplements: 7.4% growth for a value of $681 million. • Fiber and clothing: 16% growth for a value of $605 million. • Personal care products: 6.6% growth for a value of $490 million. Photo from Office.com Data source: Organic Trade Association, April 2011
The level of organic penetration in
food sales continues to increase
Organic Trade Association, 2009 Survey InformationWhy do people buy organic products? Photo from iStockphoto via Microsoft Office
Remember What the Basis of Organic Agriculture Is • To be good stewards of the land. • To preserve farmland for generations to come. • To build healthy soil.
USDA-Agricultural Marketing Service regulates organic certification Text from USDA AMS NOP website
Health
Concerns
Drive Sales
Consumer research consistently
shows that people tend to turn to
organic for reasons related to health
and wellness.
Information source: Nutrition Business Journal, March 2009Because of concerns over pesticide residues,
some consumers who do not buy any other
organic products buy organic:
• Apples
• Peaches
• Bell peppers
• Pears
• Celery
• Potatoes
• Cherries
• Raspberries
• Imported grapes
• Spinach
• Nectarines
• Strawberries
Organic Trade Association, 2009 SurveyIs Organic Food Healthier than Conventionally Grown Food?
Organic food is usually lower
in pesticides than
conventionally produced food.
• 73% of the conventional fruits &
vegetables tested had residues.
• The organic produce consistently had
less residues. Ranging from 6.5 % to
27%.
Study that compiled and compared data from three other studies, USDA, CU, and CA DPR.
Baker, et.al. 2002. Food Additives and Contaminants.Is Organic Food More Nutritious than
Conventionally Grown Food?
A 2008 Organic
Center study found
that the average
level of 11 nutrients
were 25% higher in
organic foods
compared to
conventional foods.
Date aource: Nutrition Business Journal, March 2009But, my review of the literature
revealed:
• Research is inconclusive.
• There have been few well-designed,
non-biased studies to answer this
question.
• Most studies show nitrates higher in
conventional and Vitamin C and anti-
oxidants higher in organic.Whatever the reason…
A U.S. consumer
survey found that
25% of primary
grocery shoppers
increased their
consumption of
organic foods
over the past
year.
Information source: Nutrition Business Journal, March 2009Who Buys Organic?
Organic Trade Association, 2009 SurveyPredictions Made in March 2009
for the Organic Industry
• If economy is rebounds-
growth will stay in the low
double-digit levels.
• If economy worsens more
before it gets better-growth
will slow to 8.6% over the
next few years.
• If economy continues to
spiral downward-there will
be no growth.
Nutrition Business Journal, March 2009How Good Were the
Predictions?
2010What Does This Mean for Farmers?
• Farmers in the
SE should give
organic
agriculture
serious
consideration
because it is a
growth segment
of the industry.Market Opportunities for
Southeastern Growers
• Wholesale to large regional stores and
brokers
• Wholesale to local stores
• Cooperatives and other grower owned
businesses
• Direct sales at tailgate and farmers’ markets
• Direct sales on the farm
• CSAs
• Internet salesWholesale Opportunities
(example)
• Natural food stores.
• National, regional, and local chains.
• Independents.
Photos from Earthfare websiteWholesale (example) • Regular supermarkets. • Ingles is actively looking for more farmers to grow organic produce for them. Ads from Ingles website
Organic
distributors
• Supply Ingles (example)
and many
other
supermarkets
and natural
food stores.
• Have a
distribution
facility in
Charlotte, NC.
Graphics and information from the Albert’s Organics websiteRepresentatives from a supermarket chain and an
organic distributor spoke to a group of farmers in
western NC about one and a half years ago.
This is some of what they said• 50% of organic produce is now sold
through supermarkets.
• Average organic produce sales are
2.5% and expanding.
• There is little relationship between
income and purchasing of organics.
• Even with the recession, all mainline
grocers are maintaining their organic
lines.
Photo from Office.comTo Sell to
These Markets
• Must be certified organic.
• USDA #1 is the only standard.
• Need to understand the packaging requirements.
• Be willing to offer promotional programs.
• Understand that organic premiums are not usually
returned to the grower; retail prices can only be 5-
15% higher than conventional.Examples of Other
Wholesale
Opportunities
• Appalachian Harvest- a network of certified
organic farmers in southwest VA, northeast TN, and
northern NC who work together to make locally
grown, organic produce available in area
supermarkets and Whole Foods stores in the mid-
Atlantic.
• Eastern Carolina Organics- a grower and
manager owned LLC working with over 40 growers
and 100 customers. Based in Pittsboro, NC.Direct Sales:
Tailgate markets
Two lower photos from ASAPTailgate and
Farmers’
Markets
• Are supported by loyal, steady repeat customers.
• Have a significant economic impact on their
communities.
• In Asheville, 36% of the weekly shoppers spent more
than $20 per visit in 2004.
• Customers enjoy the markets as community social
events.
Data from ASAP Marketing Studies in Asheville, NC area and photo from growingsmallfarms website in NCMany farmers now derive the
majority of their farm income from
these markets
Photos from growingsmallfarms website
by Debbie Roos in Pittsboro, NCCSA-Community Supported
Agriculture
• Subscription farming
• Customers buy shares; pay before the season
Early Spring Box July Box Contents
Photos from Cane Creek Asparagus Farm websiteCane Creek Asparagus Farm is in
their eleventh year as a CSA-their
sole market
Photos from their websiteEven if a farm doesn’t sell over the
internet, having a presence there helps
potential customers find them.Organic agriculture may be an opportunity for some of your farmers Let’s take a quick break and then run through some scenarios of how we might assist them.
Scenario 1
Scenario 2
Scenario 3 Photo courtesy of Chris Reberg-Horton
Resources for Your Program Photo provided by Appalachian Sustainable Agriculture Project
http://www.ams.usda.gov/AMSv1.0/NOP
http://southernsare.org
http://ssawg.org
http://ncorganic.org
http://growingsmallfarms.org
http://www.cefs.ncsu.edu
http://carolinafarmstewards.org
http://organicgrowersschool.org
http://asanonline.org
http://www.aaes.auburn.edu/organicveg/
Where to find certifying agencies
Frequently Used Certifiers http://www.qcsinfo.org/organiccert.htm
Some of the farms certified by QCS
http://www.clemson.edu/public/regulatory/plant _industry/organic_certification/index.html
Some of the farms certified by Clemson in North Carolina
http://www.tilth.org/
Organic Prices http://www.rodaleinstitute.org/Organic-Price-Report
Marketing Advice http://www.growingformarket.com/
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