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ORGANIC FOOD DEMAND OUTPACES SUPPLY

Posted by Tyler Jorgenson on

With the advent of the Internet and a boom in a new generation of health-conscious consumers who scrutinize everything that goes in their bodies, a new industry of organic farmers is blossoming and prospering. A health movement that started slowly but surely has now turned into a default practice among many families and businesses, and the demand for food grown without the use of pesticides, synthetic fertilizers, antibiotics or hormones is skyrocketing. According to the Organic Trade Association’s 2015 Organic Industry Survey, the demand, though, has been so substantial that supply is not keeping up with it, and organic farmers nationwide are even able to be picky about who they choose to sell their crops to, while market chains, restaurants and the average customer are finding it harder to come across such produce.

 

 Why Aren’t More Farmers Going Organic?

The potential (and solid) profit of organic farmers nationwide right now is so high that it’s hard to imagine why the big majority of older generation growers are sticking to their traditions and old standards. The process of transitioning to organic growing, though, is more complex than you might think. According to standards set by the U.S. Agriculture Department’s National Organic Program, a farmer who wants to get into this lucrative industry has to go through a three year transition before they can become certified. The problem with that is the fact that the yields will be significantly lower during this period, while the input costs and labor will much higher. Most farmers cannot take such setback or simply do not have the means to deal with a higher labor while spending more with their crops, therefore many are afraid of taking such a risk and not making it through the three years transition period.

What Is the Solution for Low Supply?

Many companies are financing the costs of farmers’ organic certification, which is $4000, in exchange for a contract that will guarantee them steady and long term supply of crops from the producers. This is a great deal for both sides since, in theory, it solves the growers’ high input costs issues during the transition phase, while it guarantees incoming supply of produce for chain of markets and restaurants that are hungry for organically grown crops and animals. The prospects for this ever-growing industry are fantastic, and as more and more families are becoming very conscious about what goes in their dinner table, this market only tends to become more profitable for whoever commercializes it. In this new era of easily-accessible information, people are questioning standards and demanding higher quality from their food providers. Experts say the organic food industry will continue to grow for at least the next three years, and while the businesses involved can expect considerable profit, overflowing demand facing a shortage of supply will continue to be a hard-to-solve issue. As for the farmers, the ones who are brave enough to drop their habits of traditional growing and join the challenge of a risky three years transitional period will very likely make from 3 to 5 times more than the average farmer who doesn’t follow organic standard.

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