For the last 30 years, Theresa Marquez has worked in the organic food industry. Currently, she is the chief marketing executive at the Wisconsin-based CROPP Cooperative, home to the Organic Valley and Organic Prairie food brands.
Over the years, she’s learned the pros and cons of the organic industry. And one prevailing element is that people who need organic food the most can’t afford it.
Organic foods have always cost more than their conventional counterparts, and the forces driving up the cost of ordinary groceries are similarly affecting the organic industry.
High-priced organic food is the result of supply and demand. In recent years, organic food sales have increased, but there are not enough organic farmers to meet that demand, leading to high prices at the grocery stores.
There are several reasons farmers aren’t responding to the market opportunity, said Jim Slama, founder of FamilyFarmed.org. A few years ago, some farmers switched to organic production drawn by the opportunity to charge a premium on a product in short supply. But one major obstacle dissuaded the bulk of farmers from making the switch: the three-year transition period required for a farm to be certified as organic from the U.S. Department of Agriculture.
During the transition period, farmers improved the quality of their soil so they could sustain crops without using synthetic fertilizers or pesticides. Unfortunately, some farmers lost money while waiting the three years. While learning new growing techniques and prepping the soil, they weren’t allowed to use the old chemicals they relied on to create bountiful harvests.
The short-term threat of smaller yields and profit scared away potential organic growers, said Harriet Behar, out-reach coordinator at the Midwest Organic & Sustainable Education Service, a nonprofit that offers training to farmers making the transition. “A lot of farmers say, –˜Well, can I make it through those three years?'”
The lean years were worth it to some farmers, who anticipated making up their losses with the additional profits they would eventually earn with organic crops. That was changed with the cur-rent energy crisis.
Government mandates and soaring fuel costs increased demand for U.S. ethanol production and the redirection of land from growing food for consumption to food for fuel. The change was one of the reasons that the cost of conventional food increased dramatically. From 2005 to 2007, the price of field corn rose from $2.00 to $4.00 per bushel, while wheat jumped from $3.42 to $6.65, according to the U.S. Department of Agriculture.
Suddenly, farmers were making a lot more money on the crops they were already growing. Though the price of organics also rose, it wasn’t enough to tempt farmers away from the booming conventional market. In fact, some farmers who had begun the transition process went back to conventional farming production, Clarkson said.
The end result was fewer organic farmers and an even smaller domestic supply of organic food, though consumers were clamoring for more.
“The organic world has succeeded at finding a wonderful demand,” Clarkson said. “What it has not found is sufficient production.”