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Both Demand & Supply For Organic Dairy And Produce Are High
“People talk about these shortages,” says Mark Kastel, co-founder of the Cornucopia Institute, an organic watchdog group. “I have not seen store shelves bare.” This is far from merely anecdotal. The two biggest sectors of the organic industry—produce, which makes up nearly 37% of the market, and dairy, at 15%—are currently experiencing, not a dearth of organic supply, but rather a surplus.
Related: 11 Surprising Reasons Organic Is Better For You
“Right now, as we speak, there’s plenty of organic,” says Hans Eisenbeis, director of media relations at Organic Valley, the dairy co-op that, as of December of last year, is the largest grass-fed organic dairy producer in the country. “We’re in a little bit of an oversupply situation from a dairy point of view.” Eisenbeis attributes this in part to the long conversion period for organic: three years ago, faced with high demand, dairy farms began transitioning to organic en masse.
“At the end of that three-year transition process, suddenly we have a lot of organic dairy farmers, and we produce too much organic milk in the near term,” explains Eisenbeis.
This is a natural element of the supply-and-demand cycle according to Organic Trade Association Farm Policy Director Nate Lewis. “When the demand is there, you ramp up production, and you usually over-target,” he says. “Then you've got to wait for the market to catch up with the supply.” The current surplus in conventional dairy also makes organic appealing. “If conventional milk is doing really well, and there's enough demand for the supply, then the price approaches that of organic,” says Eiseinbeis. “People start to say, ‘Well, if it's just another 10 or 15 cents a gallon, I can go organic.’”
This consumer tendency is not limited to dairy. The produce category—“the key gateway category” for organic, according to Tonya Antle of the Organic Produce Network—is also experiencing a surplus. “Last year, for the first time ever, we had a tipping point where we had an oversupply of vegetable row crops,” says Antle. “And at that same time, there was also a glut in the conventional market, so the conventional market couldn't even absorb it at a reduced cost.”
Related: 6 Foods Where Organic Matters Most
But given the enormous growth rate of the organic market, it seems unnatural that farmers are actually experiencing the opposite problem. “Farmers should be feeling something in terms of these shortages,” says Kastel. “The market should be sending them a message.”
There is one place in the market where this is the case.
Meat is the largest growing sector in organic, according to the Organic Trade Association, specifically poultry. An article in the Denver Post reported that Americans have “a seemingly insatiable hunger for organic chickens,” with $750 million in U.S. sales last year, an incredible 78% growth from 2015.
To Produce Organic Poultry, Farmers Need Organic Grain
But high demand for organic chicken doesn’t mean poultry barns are clamoring to convert; instead, the industry is dealing with increased demand for organic grain with which to feed these chickens. “That’s where the challenge is going to be,” says Lewis.
Producing organic grain in the United States doesn’t offer enough of a payoff for the three-year conversion period that farmers must go through to get there, according to Lewis. “Conventional corn prices and soybean prices are at a record low,” says Lewis. “So if you're farming organically for those three years, it's almost impossible to cash flow your operation.”
Related: What's The Difference Between Organic And Natural Food Labels?
In addition, Lewis adds, there isn’t enough of a safety net for U.S. grain farmers. “Crop insurance is somewhat available, but it's not great. And we don't have good storage loan options for organic farmers."
Currently, U.S. organic corn production is at 25.6 million bushels and organic soy at 4.6 million—38 and 45% increases from the previous year respectively. But that’s still just 1% of total domestic production of these crops.
But if we haven’t seen headlines bemoaning the lack of organic chicken yet, it’s because the market has found another solution: seek out this grain abroad. “If you have organic livestock, they need to eat something,” says Lewis. “And so if you've got a barn full of chickens, you're going buy corn from whomever you can buy it from at some point.”
This solution isn’t only cheaper for organic poultry farmers; it’s also easier, explains Lewis: entire shiploads containing a million bushels of grain can come into one port, as opposed to sourcing grain from individual farmers and shipping it by train and truck to individual poultry operations.
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The Major Concern With Foreign "Organic" Grain
This reliance on foreign grain, however, has posed major problems in the industry, namely the fact that much of it is not organic at all. Kastel notes that experts, including those at the Cornucopia Institute, suspected these imports of being too good to be true for years. They were proven correct when the Washington Post reported that grain being imported through Turkey had—somewhat magically—acquired the certification while crossing the Atlantic. It's "organic alchemy," says Kastel, jokingly. “Corn gets on boats; it’s conventional,” he says. “And when it gets off, it’s got all the paperwork to say that it’s organic.” (Learn more about two recent cases of food fraud.)
With foreign farmers exporting “organic” grain at ultra-low prices, American grain farmers have even less of a motivation to convert. “In some commodity areas, we have lost organic producers, because they can’t compete,” says Kastel.
Matthew Fitzgerald, an organic grain farmer in Minnesota, has felt the repercussions of this problem first-hand. “There's been major disruption of supply and demand in organic grains for the past five years because of falsified imports,” he says, noting that they have caused his farm a 30-40% revenue loss. “In a sense, you could say, ‘There’s too much supply in terms of organic grain.’ But at the same time, the integrity of that grain is questionable,” says Fitzgerald.
Related: This Family Has Been Farming Organic Rice For Over 60 Years
This issue of “questionable” organics isn’t limited to the organic grain industry, either. Kastel cites the controversy over the discovery of Aurora Organic Dairy’s farms that house 15,000 cows and don’t put them out to pasture as much as the organic certification requires (if at all). “We’re losing our pioneering family-scale farmers because they can’t compete with factory farms,” says Kastel.
So while it may appear on store shelves as though there’s more than enough organic to go around, the truth is that this “doesn’t reflect the reality” of the situation, according to Fitzgerald.
Organic Meat Demands Organic Grain, Too
The answer, it seems, is clear: buying not just organic, but local or American organic. This is an idea that most shoppers are already comfortable with when it comes to meat or specialty crops like vegetables, but as a recent Washington Post story explored, limiting our view of local to these crops isn’t enough: 96% of American cropland is devoted to grains; this is where we need to focus our efforts in demanding for transparency.
“Most folks that I work with on the poultry side would much rather buy from their neighbor or their local area or domestically,” says Lewis. “But they get to a point where they just can't find it, and they need to source it from overseas.”
Fitzgerald notes that given the pre-established demand for organic meat—and thus for organic grain—it shouldn’t be hard to convince grain farmers to convert, provided the market is willing to pay the increased prices for true organics. "I'm trying to recruit more folks to consider organic grain farming because of the profitability in it,” says Fitzgerald. “You could still support a family and be viable but not have as back-breaking work as let's say raising broccoli or kale.”
He would love to see more transparent labeling when meat and poultry is not only raised in the U.S., but fed American organic grain. “I understand the need for organics to be an affordable option for folks,” he says. “I'm not desiring those record-high prices again, but I would rather see a fair market that has integrity."