Video Conference: Video Conference: Organic Markets and CertificationOrganic Markets and Certification

Organic Production and Markets:Organic Production and Markets:The National PictureThe National Picture

Catherine GreeneSenior Agricultural EconomistEconomic Research ServiceUnited States Department of Agriculturewww.ers.usda.gov/briefing/organic

Fruits and Vegetables Accounted for 39% Fruits and Vegetables Accounted for 39% of U.S. Organic Food Sales in 2005of U.S. Organic Food Sales in 2005

Fruit&Veg

DairyBeverages

Pkgd, Prepared FoodBreads & Grains

Snack Foods

Condiments

Meat, Fish, Poultry

U.S. Retail Sales of Organic Food Rise from U.S. Retail Sales of Organic Food Rise from $10.4 Billion in 2003 to $17 Billion in 2007$10.4 Billion in 2003 to $17 Billion in 2007

Source: OTA 2004 and 2007 Manufacturer Survey

484

229

75

4,336

1,581

1,385

1,326

966

Fruits & vegetables

Nondairy beverages

Dairy products

Packaged foods

Bread & grains

Snack foods

Sauces Condiments

Meat Fish Poultry

Million dollarsFruit&Veg

Dairy

Non-dairy Beverages

Packaged Food

Breads & Grains

Snack Foods

Sauces, Condiments

Meat, Fish, Poultry 75

229

484

966

1,326

1,385

1,581

4,336

Million Dollars

U.S. Organic Food Growth and PenetrationU.S. Organic Food Growth and Penetration

Source: Organic Trade Association Manufacturer Survey 2004; Forecast Foreign Agricultural Service, USDA

0

5

10

15

20

25

1997 1998 1999 2000 2001 2002 2003 2004F

Annual Growth Rate

0

0.5

1

1.5

2

2.5

% of Total Food Sales

Growth Rate PenetrationGrowth Rate

Penetration

An

nu

al G

row

th R

ate

% o

f T

ota

l Fo

od

Sal

es

10

20

2000 2002 2004F1998

1

2

1.5

0.5

Organic Food Channel Distribution, 2003Organic Food Channel Distribution, 2003

Channel Sales (Billion) Percent of Sales

Natural Foods 4.9 48

Mass Market 4.5 43

Other * .9 9

•Includes farmers market, food service, export, internet

Source: Food Marketing Institute 2005

Organic Retail Price Premiums, 2005Organic Retail Price Premiums, 2005

Commodity Premium

Milk, butter 50 – 100%

Fruit 0 – 50%

Vegetables 50 – 150%

Corn, soybeans 100 – 150%

Beef, chicken 100 – 150%

Source: Rodale Institute; Current prices, www.newfarm.org/opx

USDA-AMS Market News Prices, USDA-AMS Market News Prices, Fruits and VegetablesFruits and Vegetables

AMS Market News publishes organic fruit and vegetable prices in some terminal markets (including Boston and San Francisco) www.ams.usda.gov/fv/mncs/TERMVEG.HTM

See an ERS analysis of farmgate and wholesale prices, 1999—2006 www.ers.usda.gov/data/OrganicPrices

USDA-AMS Market News Prices, USDA-AMS Market News Prices, Organic Poultry and EggsOrganic Poultry and Eggs

Market News began reporting organic poultry prices in the weekly in Jan. 2004, www.ams.usda.gov/mnreports/aj_PY050.txt

The report tracks prices paid to poultry or egg companies by the first receiver—such as a retailer, distributor, or manufacturer.

USDA-AMS Milk Marketing Order StatisticsUSDA-AMS Milk Marketing Order Statistics Organic Fluid Milk ProductsOrganic Fluid Milk Products

In Jan. 2006, AMS began reporting sales (in volume) of organic fluid milk products www.ams.usda.gov/dyfmos/mib/inareaslsbyprod.htm

In July 2007, organic milk sales were 2.7% of total milk sales—up from 1.7% in Jan. 2006

USDA-AMS Market News Prices, USDA-AMS Market News Prices, Organic GrainsOrganic Grains

In January 2007, Market News began biweekly reporting on organic grains.

Upper Midwest: www.ams.usda.gov/mnreports/nw_gr113.txt

Eastern Cornbelt: www.ams.usda.gov/mnreports/gx_gr120.txt

U.S. Organic Food Trade, 2002U.S. Organic Food Trade, 2002

ImportsImports ExportsExports

$1.0 - $1.5 billion $125 - $250 million

Latin America – fats, oils, fruit, cocoa, fresh produce

Canada, $75 - $150 million

Asia – soybeans, frozen fruit/vegetables

Japan, EU, Taiwan South Korea, New Zealand

EU – pasta, olive oil, wine, and tomatoes

Import to export ratio 8:1

Source: USDA Foreign Agricultural Service (2005)

ERS Organic Activities:ERS Organic Activities:Tracking adoption of organic farmingTracking adoption of organic farming

ERS has tracked the adoption of certified organic farming systems in the U.S since the mid-1990s

ERS collaborates with over 50 state and private certifiers, other USDA agencies, and several state offices of USDA’s National Agricultural Statistics Service to make estimates

Estimates available by commodity and state, 1997, 2001-2005, www.ers.usda.gov/Data/Organic

U.S. Certified Organic Cropland and U.S. Certified Organic Cropland and Pasture, 1992 - 2005Pasture, 1992 - 2005

1/ Excluding Alaska. Sources: 1992-94 ,USDA-AMS; 1995 Agrisystems International; 1997,2000-05, USDA-ERS

-

500

1,000

1,500

2,000

2,500

3,000

1992 1993 1994 1995 1997 2000 2001 2002 2003 2004 2005

Year

1,000 acres

Pasture 1/

Cropland

PastureCropland

1,00

0 A

cres

1,000

2,000

3,000

Year19

9219

9420

0020

0220

04

U.S. Certified Organic Acreage and Operations, 2005

Source: USDA, Economic Research Service, based on information from USDA-accredited State and private organic certifiers.

U.S. Organic Adoption Rate U.S. Organic Adoption Rate Specialty Crops, 2005Specialty Crops, 2005

Certified organic crop acreage accounts for:

1.6% U.S. tomato acreage 2.4% U.S. grape acreage 3.4% U.S. apple acreage 3.7% U.S. lettuce acreage 5.8% U.S. carrot acreage

(5% all U.S.vegetables; 2.5% all U.S. fruit)

Source: USDA Economic Research Service

U.S. Organic Adoption Rate U.S. Organic Adoption Rate Field Crops, 2005Field Crops, 2005

Certified organic crop acreage accounts for:

0.2% U.S. corn acreage0.2% U.S. soybean acreage 0.5% U.S. wheat acreage0.8% U.S. rice acreage3.1% U.S. dry pea-lentil acreage

Source: USDA Economic Research Service

U.S. certified organic pasture and cropland, 2000 and 2005

Operations Cropland Pasture

2005 8,493 1,723,271 2,331,158

2000 6,592 1,218,905 557,167

Source: www.ers.usda.gov/data/organic

Certified organic pasture and cropland, Selected States, 2000 and 2005

Operations Cropland Pasture Indiana 2005 43 4,253 903

2000 73 5,347 270

Illinois 2005 131 24,682 1,694

2000 95 18,603 865 Ohio 2005 284 34,502 5,219

2000 262 35,469 4,744 Michigan 2005 164 43,105 1,414

2000 143 30,502 846

Source: www.ers.usda.gov/data/organic

ERS Organic Activities:ERS Organic Activities:Expanding USDA’s ARMS Producer SurveyExpanding USDA’s ARMS Producer Survey

ERS expanded the Agricultural Resources and Management Survey (ARMS) in 2005.

Targeted samples of organic producers: dairy in 2005 soybeans in 2006 apples in 2007

Findings on organic costs and revenue, www.ers.usda.gov/briefing/organic

For more information

ERS Organic Briefing Room,

www.ers.usda.gov/briefing/organic

—provides links to all ERS organic research reports, articles, and data