WASHINGTON — While produce remained the top-selling organic category in 2008, many other sectors gained considerable ground in recent years, according to analysis by the U.S. Department of Agriculture.
The observation was included in "Marketing U.S. Organic Foods — Recent Trends from Farms to Consumers." The report, issued by the Economic Research Service of the U.S.D.A., was written by Carolyn Dimitri, an agricultural economist with the E.R.S., and Lydia Oberholtzer, a senior research assistant at Pennsylvania State University, University Park.
The authors noted that data on the organic food market has been scant over the past decade despite rapid growth. Their work was supported through $5 million allocated to data collection on organic farming in the Food Conservation and Energy Act of 2008.
Expanding on the diminished share of organic foods accounted for by produce, the study indicated that a range of other categories have been gaining.
Even with produce remaining the top-selling category (in 2008), sales of dairy products, beverages, packaged and prepared foods and bread and grains grew to 63% of total organic sales in 2008 from 54% in 1997.
Ms. Dimitri’s and Ms. Oberholtzer’s study was based on a combination of original research as well as a review of the existing research literature on organic food in the United States. Among the more confounding areas of existing research, they noted, are studies seeking to profile the typical organic consumer. They said various studies have reached "contradictory conclusions" about issues such as how the presence of children in a household would affect the likelihood of buying organic food.
Assessments of organic buying by ethnic group also have failed to yield consistent conclusions, they said.
"The one factor that consistently influences the likelihood of a consumer’s buying organic products is education," they said. "Consumers of all ages, races and ethnic groups who have higher levels of education are more likely to buy organic products than less-educated consumers."
Among the most prominent changes in the organic marketplace in recent years has been the widening reach of these products, the study said. By 2007, 82% of retail food stores offered organic foods with many developing private label organic lines.
Expanding on individual food categories, the most rapid growth in recent years for organic foods has been in the meat and egg sectors, which the authors described as remaining "in early stages of development" and with a relatively low sales total.
The U.S.D.A. estimated total organic meat sales of $476 million in 2007, with poultry accounting for 59% of the total and beef accounting for 24%.
"Organic livestock increased dramatically between 2000 and 2005, with both beef and milk cows experiencing close to 20% average annual increases each year," the authors said. "The number of hogs and pigs increased 58% between 2000 and 2005. Organic poultry numbers experienced 39% average annual increases from 2000 through 2005. The number of organic broilers, which make up a substantial part of the overall poultry growth, increased an average of 53% per annum during this period. Layer hen numbers have also expanded at an average annual rate of 22%."
Darkening the horizon for organic meat, at least somewhat, is uncertainty about feed grain supplies.
"Scarcity of organic feed grains and oilseeds, especially corn and soybeans used in the production of milk and meat, has contributed to shortages of organic milk and meat at the retail level," the U.S.D.A. said. "High conventional feed and grain prices during 2008 exacerbated this problem, as producers in the Midwest responded to high organic feed prices by shifting their organic beef and dairy into conventional production."
Average annual growth of grain acreage devoted to organic cultivation averaged only about 7% between 2000 and 2005 with growth at 10% or more for corn, wheat and oats but less than 1% per year for soybeans.
Because of uncertainty about supply, food processing companies have taken steps to ensure they will be able to procure the grain they need.
"The research indicates that contracts are used at a higher rate in the organic sector than in the conventional sector," the U.S.D.A. said. "In 2007, approximately 65% of the volume of organic products bought by organic handlers (companies that purchase organic products from farmers and other suppliers and process or repack the products and sell them to retailers, institutions or other handlers) was obtained through written or verbal contracts and 29% acquired through spot markets."
The U.S.D.A. report contains a variety of data offering a profile of organic farming. The average size of a certified organic farm increased to 477 acres in 2005 from 268 acres in 1997 (by contrast, the average farm size overall in the United States was 418 acres in 2007, down from 441 in 2002).
The area certified as organic farmland used for production was 2.6 million acres in 2007, including 1.3 million used for growing certified organic crops and 1 million acres of certified organic pastureland.
The U.S.D.A. estimated that 866 farms account for 60% of certified organic farmland in 2007.This article can also be found in the digital edition of Food Business News, October 13, 2009, starting on Page 21. Click here