Organic demand, supply grow together
Western orchards respond to growing world interest in organic fruit
By STEVE BROWN
The growth in organic tree fruit has been anything but steady. While consumer demand in the U.S. has grown steadily over recent decades, a lapse built into the certification process shows up in bumpy supply charts.
"We seem to have these steps," Washington State University researcher David Granatstein said. "They're due to the three-year transition from conventional into organic. Growers see a market signal to respond to demand, then when a lot of acres come on line, there's a rapid increase in supply."
The ride is bumpy, but the market is strong, Granatstein said. In the U.S., "the Western states are the driver."
Washington state dominates in acreage planted to organic apples. Predictions put almost 8 percent of the state's trademark fruit shipments in 2010-11 as organic. In 2009-10, that number was 6.1 percent. According to the Washington Growers Clearing House, the average price for all apples that season was $19.05 a box; for organic apples it was $24.89.
Washington also leads the U.S. in the production of organic pears and sweet cherries.
California produces almost all of the nation's organic plums and prunes. In 2009, about 2,500 acres were planted to plums and prunes. Other stone fruit with major organic acreage were peaches, nectarines, apricots and cherries.
California growers also dominate the organic walnut and almond markets.
Oregon had 344 acres in organic pears in 2008, with additional acreage in sweet cherries and apples.
"The outlook is good," Granatstein said. "Organic demand is not saturated at this point, prices rebounded some in 2010, and price premiums have come down some."
Granatstein credited the demand curve to a growing population and increasing attention paid to foods. "Healthy diets are the trend," he said, "and the organic message is one of interest."
He said he expects the bumpy cycles to continue until increases in supply match increases in demand. "The key is not to go crazy and bring too much acreage on line all at once."
More than 8,000 square miles worldwide are devoted to organic horticulture, according to the Research Institute for Organic Agriculture and the International Federation of Organic Agriculture Movements.
Organic fruits, olives, nuts, vegetables, melons, root crops, coffee, tea and maté, flowers and ornamentals, medicinal and aromatic crops, coconuts, hops and mushrooms are grown on 5.3 million acres.
Reports show Mexico, with about 740,000 acres, leads the world in overall organic horticulture. At least one potential leader, China, does not break out its organic acres.
"Even a small percentage of its 45 million hectares (110 million acres) in horticulture would dwarf anyone else," he said.
Worldwide numbers are incomplete, but global organic fruit acreage increased by about 73 percent from 2005 to 2008, now totaling about 1.25 million acres. Pome fruits make up 107,000 of those acres; stone fruits, 88,000.
Apples show dramatic increases in planted acres worldwide, more than doubling from 2000 to 2008.
Italy and Spain are second and third, respectively, in reported organic acreage. The U.S. is fourth, with 321,000 acres. Following that are Tunisia, the Dominican Republic, Peru, Greece, Ecuador and Poland.
Apples make up the greatest percentage of organic tree fruit worldwide, followed by apricots, plums, cherries, pears, peaches and nectarines.
Europe is a big market for organics, Granatstein said, but growers there are faced with another variable. For years, they have been subsidized, and consumers have not been paying much of a premium.
"I've heard that now that governments are feeling the economic pinch, those subsidies are going away, and it's difficult to maintain demand," he said.