Sean Pratt reports from the Oilseed & Grain Trade Summit in Minneapolis, Minn.
MINNEAPOLIS, Minn. — There is a growing supply gap in U.S. organic agriculture that needs to be addressed, says a food industry consultant.
Organic exports have risen only slightly over the past five years to US$545 million in 2015 from $412 million in 2011. Imports have exploded over the same period to $1.58 billion from $667 million.
Peter Golbitz, founder of Agromeris, can understand why specialty and tropical products such as coffee and bananas are imported into the country, but he can’t fathom why soybeans and corn are two of the top five imported products.
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The two crops that are widely grown on conventional acres in the United States accounted for 22 percent of organic imports in 2015.
Imports of organic soybeans are growing by 49 percent per year, while feed corn imports are increasing by 47 percent per year.
As well, these crops are increasingly being sourced from non-traditional exporters such as Bulgaria, Turkey and India.
Imports of Indian soybeans have soared to almost four million bushels in 2015 from 290,000 bu. in 2011.
“That leaves one wondering, is all of that really organic?” Golbitz told delegates attending the Organic & Non-GMO Forum at the 2016 Oilseed & Grain Trade Summit.
Some consumer watchdog groups in the U.S. are wondering the same thing. They are concerned about what is being fed to organic livestock and poultry.
The U.S. Department of Agriculture certifies that imports are meeting its standards, but it doesn’t have inspectors on the ground in places such as India, which is making some groups nervous.
“The last thing the industry wants are consumer groups questioning this developing sector of organic livestock,” Golbitz said.
Imports accounted for 40 percent of U.S. organic corn supply and 80 percent of its organic soybeans in 2015. Those numbers will rise to 50 and 90 percent, respectively, by the end of this calendar year.
Buyers bought $352 million worth of imported organic feed products in 2015 at an average price of $9.43 per bu. for corn and $20.65 per bu. for soybeans.
Those prices are well below the going rate in the U.S.
“It’s kind of creating a disincentive for American producers to jump into the organic market.”
Golbitz estimated buyers are importing the equivalent of 107,704 acres of corn and 352,459 acres of soybeans. By comparison, U.S. farmers planted 166,841 acres of organic corn and 94,841 acres of organic soybeans in 2015.
If the U.S. were to be self-sufficient, farmers would likely need to plant one million acres of organic corn and soybeans next year.
Golbitz said that would still be far less than one percent of total U.S. corn and soybean acres.
“Certainly there is plenty of opportunity here to grow this production,” he said. “There’s no reason why we cannot be producing this all in our own backyard.”
However, that isn’t going to happen in the short-term. There were 141,859 acres of cropland in transition in 2015, and much of that will be planted to other organic crops such as oats, wheat and beans.
Golbitz said it is a dangerous strategy to rely on imported product because of problems with quality and consistency, questionable certification and complicated supply logistics.
It is also dangerous because the imported product is driving down prices. He gets calls from Indian exporters offering organic soybeans for $17 a bu. when U.S. farmers are hoping to get $22 a bu.
Increasing domestic supply has its challenges, including the three-year transition period, competition from the non-GMO market, the lack of skilled labour.
Golbitz thinks one of the key elements to a solution is to create certified transitional programs in which buyers pay growers a premium during the transition years.
“If we continue relying on imports, we are really setting ourselves up for disaster,” he said.
