Overview of the Organic Farming Industry. Jeanine Davis Department of Horticultural Science North Carolina State University
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1 Overview of the Organic Farming Industry Jeanine Davis Department of Horticultural Science North Carolina State University
2 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
3 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)
4 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
5 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 Ian Britton - FreeFoto.com
6 Organic Agriculture is Big Business Globally The global sales of organic food and drink reached 54.9 billion US dollars in 2009.
7 Let s briefly review the history of modern organic agriculture
8 Transition to Synthetics-Fertilizer st superphosphate fertilizer factory, England K fertilizer industry started in Germany st synthetic N fertilizer was calcium nitrate, made in Norway st ammonia fertilizer factory in Germany. Photo Ian Britton - FreeFoto.com
9 Transition to Synthetics- Pest Control Products 1939-DDT insecticidal properties discovered s & 1950 s -aldrin, chlordane, parathion, 2,4- D; hybrid seeds and the Green Revolution Rachel Carson and Silent Spring s and 1980 s-lower rate, more selective products developed, but resistance developed s to present-more selective products, lower rates, less persistence, safer, more management strategies, GMOs. Graphic from Office.com
10 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.com
11 Some Pioneers of Modern Organic Agriculture Rudolf Steiner, Austrian, introduced biodynamics in 1924; holistic, balanced. British botanist, Sir Albert Howard, father of organic farming book Law of Return - recycling nutrients from plants and animals. Jerome Rodale started Organic Farming and Gardening magazine in the U.S. in Rachel Carson published Silent Spring in Robert Rodale published The Basic Book of Organic Gardening in Photo of Rudolf Steiner from rudolfsteinerweb.com
12 A 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.
13 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.
14 Certified Organic Standards Organic standards were not created by scientists. They are changed and updated. There still is some difference in interpretation between certifiers.
15 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 Many farmers who were certified organic prior to 2002 are not anymore. Graphics from Office.com
16 2008 Census-Certified Organic (or exempt) Alabama North Carolina # farms # 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.com
17 Change over the years Alabama North Carolina 1997 cert. organic acres cert. organic acres 35 1, cert. organic acres 1,082 9,618 Data from 2008 Census on Organic Agriculture Photo from Office.com
18 Compared to Other States # organic farms DE 8 # organic acres RI 205 Total organic sales Lowest Alabama North Carolina Highest DE, MS * AL 8 AL 1,082 AL * NC 246 NC 9,618 NC $52,796,000 CA 2,714 WY 677,147 CA $1,148,650,000 Graphic from Office.com Data from 2008 Census on Organic Agriculture
19 Details 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 household income come from organic sales 6% 29% 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. Graphic from Office.com Data from 2008 Census on Organic Agriculture
20 So Where are We Now? What are the trends? Where are the opportunities? What are the numbers? Graphic from Office.com
21 U.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 2011
22 U.S. Consumer Sales of Organic Foods & Beverages were Valued at $27 billion in 2010 Data Source: Organic Trade Association, April 2011
23 Organic 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
24 Organic Dairy Sales in 2010 Organic dairy, the 2 nd 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 2011
25 Organic 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 2011
26 In 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
27 The level of organic penetration in food sales continues to increase Organic Trade Association, 2009 Survey Information
28 Why do people buy organic products? Photo from istockphoto via Microsoft Office
29 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.
30 USDA-Agricultural Marketing Service regulates organic certification Text from USDA AMS NOP website
31 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 2009
32 Because 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 Survey
33 Is Organic Food Healthier than Conventionally Grown Food?
34 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 Food Additives and Contaminants.
35 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 2009
36 But, 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 antioxidants higher in organic.
37 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 2009
38 Who Buys Organic? Organic Trade Association, 2009 Survey
39 Predictions Made in March 2009 for the Organic Industry If economy is reboundsgrowth 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 2009
40 How Good Were the Predictions? 2010
41 What Does This Mean for Farmers? Farmers in the SE should give organic agriculture serious consideration because it is a growth segment of the industry.
42 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 sales
43 Wholesale Opportunities (example) Natural food stores. National, regional, and local chains. Independents. Photos from Earthfare website
44 Wholesale (example) Regular supermarkets. Ingles is actively looking for more farmers to grow organic produce for them. Ads from Ingles website
45 Organic Supply Ingles and many other supermarkets and natural food stores. Have a distribution facility in Charlotte, NC. distributors (example) Graphics and information from the Albert s Organics website
46 Representatives 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
47 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.com
48 To 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.
49 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.
50 Direct Sales: Tailgate markets Two lower photos from ASAP
51 Tailgate 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 Customers enjoy the markets as community social events. Data from ASAP Marketing Studies in Asheville, NC area and photo from growingsmallfarms website in NC
52 Many farmers now derive the majority of their farm income from these markets Photos from growingsmallfarms website by Debbie Roos in Pittsboro, NC
53 CSA-Community Supported Agriculture Subscription farming Customers buy shares; pay before the season Early Spring Box July Box Contents Photos from Cane Creek Asparagus Farm website
54 Cane Creek Asparagus Farm is in their eleventh year as a CSA-their sole market Photos from their website
55
56 Even if a farm doesn t sell over the internet, having a presence there helps potential customers find them.
57 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.
58 Scenario 1
59 Scenario 2
60 Photo courtesy of Chris Reberg-Horton Scenario 3
61 Resources for Your Program Photo provided by Appalachian Sustainable Agriculture Project
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73 Where to find certifying agencies
74 Frequently Used Certifiers
75 Some of the farms certified by QCS
76 _industry/organic_certification/index.html
77 Some of the farms certified by Clemson in North Carolina
78
79 Organic Prices
80 Marketing Advice
81 Really good book
82 Discussion
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