Natural Foods Merchandiser
Biofuels send organic meat prices soaring

Biofuels send organic meat prices soaring

A 21 percent growth in sales for organic raw materials in the U.S.—compared to a 1 percent increase in their supply—illustrates the market forces igniting an explosion in costs for producers of organic-certified beef, pork, chicken and eggs.

Needless to say, these costs are passed on to natural products retailers.

Experts say the challenges organic farmers and ranchers face as they try to earn a living feeding meat animals in a time of doubling costs for organic grains and soybeans are attributable to overseas demand for U.S.-grown organic crops, as well as the three years it takes to convert conventional cropland to organic.

But the real cost villain has to do with energy, specifically the amount of land given over to biofuels production. One expert told NFM biofuels are the most significant change in agriculture in his 40 years studying the industry.

Yet according to a report published in the Feb. 8 edition of Science, biofuels cause more greenhouse gas pollution than conventional fuels, a double whammy for organic farmers whose ethic is environmental stewardship.

Doubling prices
"Biofuels are the biggest cost driver for feed grains," said Lynn Clarkson, president of Clarkson Grain Co., a seed and feed supplier in Cerro Gordo, Ill. Conventional soybean prices, for example, have jumped from $5.50 a bushel to $13 in the last year, while organic soybeans are $20, he said.

"Since it takes eight pounds of grain to produce one pound of beef, producers are turning from organic feed to natural," Clarkson said. He defines natural as crops that aren't genetically modified.

Dominion Farms, a family partnership in Denison, Texas, with upwards of 3,000 chickens, has seen its bill for natural feed jump $100 a ton, to $400, in the last year, said owner Steve Cooper. In response, he's raised prices by 50 cents a pound.

Much smaller farmers not willing to compromise with anything less than 100 percent organic grains are finding other ways to feed their livestock and fowl.

Deborah Raven-Lindley, who owns Nevermore Farm, a 10-acre poultry operation in Arbuckle, Calif., said that as the cost of organic feed rose from $9 to $11 a bag (compared with $2 for conventional), she began using organic fruit and vegetables from her own garden, in addition to blemished almonds and citrus products from local organic growers.

"I save 25 [percent] to 35 percent this way," she said.

At Emma's Family Farm in Windsor, Maine, owner Rose Hoard never purchases organic feed grains. "Too expensive," she said, so she grows her own.

Kernels clink
Farmland dedicated to organic products composes merely one-half percent of the nation's total cropland, according to the U.S. Department of Agriculture's Economic Research Service. It's doubtful the situation will change soon, largely because of biofuels.

In Story County, Iowa, every kernel of corn grown this year will go to a new local ethanol plant, said Reginald Clause, an agricultural and field specialist at Iowa State University.

Ethanol is a "privileged actor," Clause said, noting that the incentives to produce it will continue over the next several years as a result of subsidies provided in the latest farm bill.

"Organics' costs rise as available land decreases, on top of which organic farmers can't use 'turbo-seeds' (bio-engineered) to increase yields," Clause said.

Hogs are a case in point, according to David Stender of Iowa State's Extension Service. Feeding them organically requires 25 percent more corn, but "we've come up against a finite availability of land, and the demand for it, escalated by ethanol, continues to go up.

"These changes are bigger than the invention of the plow," he says, only half jokingly.

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