Organic products experiencing the biggest growth are in the dairy,
frozen foods, bakery and cereals, ready meals and baby food sectors,
says an agricultural economist who has studied the industry.
Ann Cooney told producers who attended the organic session of Crop
Production Week that the United States Department of Agriculture is
forecasting growth rates of about 38 percent for those goods for the
five-year period between 1998 and 2003.
By contrast, fresh produce sales will increase only eight percent
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Produce made up 60 percent of organic sales in 1998, but will account
for less than 40 percent by 2003 if the USDA’s projections are correct.
Frozen food is the next biggest commodity group followed by dairy,
bakery and cereals, and ready meals. When added to produce, they will
make up 80 percent of the organic market in 2003.
Cooney said the U.S. is the largest consumer of organic food products
and second largest producer after the European Union. Sales of organic
products in the U.S. are growing by 20 percent each year.
Global retail sales of organic food in 2001 were estimated at $20
billion, nearly half of which was sold in the U.S. But that $9.5
billion in U.S. sales represents less than one percent of total
American retail food sales.
“In addition to a growing market for organic food in North America,
markets continue to expand in Germany, England and Japan,” said Cooney.
People buying organic products are primarily women. The most purchases
are made by people who earn between $20,000 and $40,000 in annual
income and the least by people in the $60,000 to $80,000 bracket.
According to data compiled by the USDA, organic corn fetched a 35
percent premium over conventional corn in 2000. Growers of organic hard
red spring wheat received a 50 percent premium, while organic oats and
soybeans delivered 35 percent and 100 percent premiums respectively.
“However, there is a limit to how much consumers will pay for organic
products and in some cases premiums have decreased,” said Cooney.
