Natural Foods Merchandiser

More Time Needed to Increase the Organic Herd

Demand for natural and organic beef is rising with the popularity of low-carbohydrate diets and the discovery of bovine spongiform encephalopathy in the United States, but organic herd numbers have been slow to catch up.

According to an Organic Trade Association survey, organic meat and poultry sales increased 77.8 percent in 2003, with projections of 30.7 percent more growth in each of the next four years. The survey showed the meat and poultry category to be the fastest growing organic category, even before BSE was discovered in the United States.

Customers who have become more aware of conventional beef production processes because of the BSE scare are increasingly willing to look past the higher price of organic beef. The organic label requires an organic vegetarian diet for the cattle and traceability of the herd. Both requirements reassure customers about the safety of the meat they?re purchasing.

?Once there seemed to be heightened awareness, price wasn?t as much of a factor,? said Katherine DiMatteo, OTA executive director.

Sonja Tuitele, spokeswoman for Wild Oats Natural Markets, said the company?s sales of natural and organic beef have been up 20 percent year over year, and attributed the increase to shoppers on low-carb diets and consumers conscious of meat safety. ?We?ve had to really increase our orders,? she said.

But organic cattle can?t reproduce and grow fast enough to meet demand.

Increasing the supply of organic beef is a slow biological process, said Mary Rickert, general manager of Prather Ranch, an organic and natural beef producer in California.

Without artificial growth hormones and antibiotics, an organic steer can take longer to reach market weight as a conventionally raised animal. That factor alone contributes to higher prices because the slower-growing steer costs more to feed over time and delays the rancher?s return on investment.

For example, Prather Ranch has a closed organic herd, meaning it only increases the size of its herd through its own breeding program. A closed herd ensures that the cattle are fed an organic vegetarian diet throughout the entire life cycle and allows for complete traceability—both important factors when dealing with BSE and U.S. Department of Agriculture organic requirements. But this makes it difficult to increase the numbers of the herd quickly.

The challenge of increased demand has been more difficult for the organic sector than for the natural sector because the organic industry was smaller to begin with. Since consumer demand was not consistently high before December 2003, the organic meat infrastructure was developing slowly and cautiously, said DiMatteo. But now that the demand is suddenly greater than the supply, it could take years for the industry to catch up.

To keep up with demand, many organic ranches are increasing production, said DiMatteo. ?But I don?t think any farmer can afford to overestimate,? she said. Overestimating the demand could lead to a flood of organic meat on the market and lower prices, DiMatteo explained.

DiMatteo suggested that if retailers want to be able to provide their customers with a consistent supply of organic beef, they should commit to long-term contracts with growers instead of spot buying. ?Retailers have to play the part of investor,? she said.

In the meantime, as organic beef infrastructure expands to meet the growing demand, retailers can supplement their shelves with natural beef and meats with other eco-labels, said DiMatteo. Most beef labeled natural is also raised on a vegetarian diet, so for BSE safety, retailers can recommend natural beef as well as organic. But the key, said DiMatteo, is to keep customers informed about availability of organic beef, making sure they know why it might not always be available, and to educate customers about alternatives.

Natural Foods Merchandiser volume XXV/number 8/p. 11

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