Organic market keeps growing through recession
Specialist credits trend toward eating at home for growth
By STEVE BROWN
Organic sales are up in Washington state, but the number of acres grown organically is shrinking, a new survey shows.
In the survey, David Granatstein, sustainable ag specialist at Washington State University, found that even as organic farmgate sales increased 16 percent to $244.6 million for 2010, Washington had 12 percent fewer acres in organic production in 2011.
"This is about farmers managing their own risk," he said. In Eastern Washington, dryland organic farming presents many difficulties, and some growers are switching to conventional wheat production because "it's more of a guaranteed thing."
Nationwide, organic food sales have continued to grow, both in farmgate value and in market share, during the recession.
Organic sales in 2011 grew by 9.4 percent over the previous year, with the greatest increase in fresh produce, according to the Organic Trade Association. In 2010, organic food sales in the U.S. reached 4 percent of all food sales, up from 3.7 percent in 2009.
Granatstein said he credits the continuing trend in part to consumers buying less processed food and eating more at home.
"People adjusted their habits during the recession, but they didn't leave out organic because it had become part of their lives," he said.
Also, he said, the premium -- the price differential between organic foods and their conventional counterparts -- has shrunk in some products.
Tilth Producers of Washington board president Diane Dempster agreed some premiums have decreased, especially as larger companies have increased their acreage.
"In some crops, say carrots, with their high weeding costs, those costs haven't gone down, but in the salad mix industry they are a lot more competitive," she said.
The other side of the coin is making organic production profitable.
Severine von Tscharner Fleming, founder of the young farmers group Greenhorns, said organic farming attracts startup growers because it is more profitable per acre than conventional farming.
Direct sales is the key to success, she said. "The venue of sale is more critical than the price point. It's all about which part of that retail price you're able to capture as producer."
Starting small makes success possible, she said.
Granatstein said it's predictable that organic production will always ebb and flow.
The three-year period of getting land certified organic "makes for a less-smooth transition," he said. "There's the risk of getting out too early, and it takes a long time to get back in."
Another statistic that Granatstein called "amazing:" Farms with sales of more than $1 million per year account for 56 percent of organic sales in Washington. The smallest 30 percent of organic farms, in contrast, contribute about 1 percent of the economic output.