Organic demand outstrips supply

As demand for certain organic products is surpassing supply, US manufacturers are looking to imports to fill the supply gap, while current shortages threaten to stunt manufacturers' growth.

Caren Wilcox, executive director of the Organic Trade Association, said certain segments of the organic industry, especially dairy and meat, are reporting shortfalls.

Gary Hirshberg, president and CEO of organic yoghurt producer Stonyfield Farm, said the lack of supply was hampering the New Hampshire company's growth.

"Stonyfield Farm has seen an annual growth rate of around 27 per cent for the past 13 years, forecast to rise to 30 per cent this year," he noted. "That would be 40 per cent if supply were not an issue."

Large retailers such as Wal-Mart moving into the organic segment is putting a strain on supply, according to David Bruce, farmer communications director for Organic Valley Family of Farms.

In this climate, companies such as Stonyfield Farm have had to rely on imported produce to keep up with rampant sales
In this climate, companies such as Stonyfield Farm have had to rely on imported produce to keep up with rampant sales. For example, North America does not produce enough organic blueberries to keep up with the explosive rise in consumer demand. Because of the nature of the plant, organic crops cannot be harvested as rapidly as demand requires. Similarly, nut crops such as almonds and walnuts cannot be planted and harvested within one season the way some organic vegetables can.

Though imported produce loses the added value of being local, Wilcox holds that supporting organic agriculture all over the world is a positive thing, as long as in the long run the environmental benefits of increasing organic production keep growing in the United States, too.

There is no quick fix for a supply shortage in an industry that requires three years to convert enough farms from conventional to organic production to redress the balance, Wilcox said.

Manufacturers such as Stonyfield Farm and Organic Valley are offering financial incentives for conventional farmers to go organic. "We have invested heavily in creating long-term solutions to the problem by offering transition payment for farmers to convert," Hirshberg said.

So far, Hirshberg reports that the efforts have been successful in increasing supply in both milk and fruit. "There's no question that farmers would not be able to go organic without help and premium," he said.

In addition, Stonyfield Farm is offering farmers support by sponsoring workshops and conferences for farmers on topics such as organic herd-health management.

Organic Valley is also working through political channels to boost funds available to help farmers make the jump to organic.

But even if financial incentives may tempt conventional farmers to convert, infrastructure to support such rapid growth in US organics is still lagging, according to Bob Scowcroft, executive director of the Organic Farming Research Foundation. Even if dairy farmers are willing to convert to organic, there could be shortages of organic feed.

Complications aside, Hirshberg remains positive about the shortages, however. "The current problem of supply and demand in organics is a problem of success," he said. "Growth has outstripped supply."

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