Golden opportunities for organic farmers in the USA
Published 19/08/2015 | 02:30
Sales of organic food continue to soar in the United States. In 2014 tills were jingling to the tune of a staggering $39bn (€34.8bn), up 11.3pc on the previous year.
Consumer demand has grown by double digits every year since the 1990s - sales in 1997 were just $3.6bn (€3.2bn) so since then the market has been in constant growth.
The major challenge now facing the industry is that production is not keeping up with demand and supply shortages are becoming an issue.
Organic food sales make up almost 5pc of the total food sales, while acreage of organic production is just over 1pc of all land area in farm production.
It is something Irish organic farmers should be capitalising on as growing environmental concerns, and specific issues like the routine use of bovine growth hormones in livestock, seems to be driving consumer demand for organic food.
California the Golden State
Known as the Golden State, California is the largest producer of fresh produce in the United States, and in many ways influences what the rest of America consumes.
The state is certainly golden when it comes to organic food production and is viewed as the organic hub, both for production and consumption. On a recent visit to the Ferry Plaza Farmers' Market in the San Francisco Bay area, it was evident just how popular organic food has become.
It is prolific and can be found everywhere from restaurant menus, basic and specialist supermarkets, coffee shops, farmers markets, to street food such as catering trucks and food stalls.
Far from being seen as a niche market, it is quickly becoming mainstream, so much so that many large conventional food companies are buying up smaller organic companies in order to access the growing market. While more farmers continue to convert to organic production in California, demand still outstrips supply.
Organic certification in the United States began in California as a group of farmers formed the California Certified Organic Farmers (CCOF), which became the first organisation to certify organic farms in North America.
The standards they developed eventually became the model for the Organic Food Protection Act in 1990. At the vibrant farmers markets in the Bay area it was clearly evident organic farmers outweighed conventional farmers by around fourfold - this is a big change based on previous visits.
Research shows that consumption of organic food is not confined to any socio-economic group, but permeates all groups and ethnic backgrounds.
While Californian farmers are suffering from a four-year drought, estimated to cost the state billions in agricultural losses, apparently organic farmers are still thriving.
Opportunities for Irish producers
National certification bodies like IOFGA are recognised throughout the EU, allowing Irish organic farmers to trade across Europe.
In turn, the European Union has agreements with other countries such as the United States. In practice this means organic goods can trade between countries without requiring additional certification in the country where the final point of sale takes place.
This means the US organic market is open for business for Irish producers. The two main sectors Irish producers are looking at in particular are beef and dairy.
According to the most recent USDA Red Meat Outlook report, beef imports into the US are growing year on year as domestic supplies tighten due to reduced cattle throughput numbers.
Opportunities exist for Irish organic beef, particularly in the specialist retailers category, if continuity of supply can be guaranteed.
The organic dairy sector had an 11pc increase in sales in 2014 and is valued at almost $5.6bn (€5bn), the biggest percentage increase for that category in six years according to the Organic Trade Association in the US.
This is a sector Irish producers are already making moves to supply.
Grace Maher is Development Officer with the IOFGA, www.iofga.org
Grants to help meet growing demand
Organic food processors can now apply for grants of up to half a million for packaging, preparation and storage facilities.
Under the new scheme, a minimum level of investment has been set of €3,000. Minister of State at the Agriculture Department, Tom Hayes, said the scheme would help existing organic processors meet the growing demand for organic food.
The separate TAMS II Organic Capital Investment Scheme has opened with €8m available for many facilities such as animal housing and silage pits. Qualified farmers getting a standard rate of aid of 40pc on investments up to a maximum ceiling of €80,000.