Organic Agriculture

“Organic Agriculture is a production system that sustains the health of soils, ecosystems and people. It relies on ecological processes, biodiversity and cycles adapted to local conditions, rather than the use of inputs with adverse effects. Organic Agriculture combines tradition, innovation and science to benefit the shared environment and promote fair relationships and a good quality of life for all involved.” [1]

Additionally, IFOAM notes this definition is derived from four main principles of Organic Agriculture, also known as Organic Ag. As Organic Agriculture consultants, the Fertoz team thinks it’s important to understand what the roots of this topic are:

  • Health
  • Ecology
  • Fairness
  • Care

When consumers ask, “What is sustainable agriculture?”, they will know Fertoz is present as a reliable source of information on the industry, agricultural development, agricultural yield plus much more. To meet this expectation, we have shared information from the USDA and many other reliable outlets to provide a better understanding of Organic Agriculture.

– The Consumer Side –

Consumer demand for organically produced goods continues to show double-digit growth, providing market incentives for U.S. farmers across a broad range of products. Organic products are now available in nearly 20,000 natural food stores and nearly 3 out of 4 conventional grocery stores. Organic sales account for over 4 percent of total U.S. food sales, according to recent industry statistics.

  • Organic food is sold to consumers through three main venues in the United States—conventional grocery stores, natural food stores, and direct-to-consumer markets.
  • A typical organic consumer is difficult to pinpoint, but new research continues to shed light on consumer attitudes and purchasing behavior.
  • Organic price premiums continue to remain high in many markets as the demand for organic products expands.

– Organic Sales Widen in All Food Categories –

USDA does not have official statistics on U.S. organic retail sales, but information is available from industry sources. U.S. sales of organic products were an estimated $28.4 billion in 2012—over 4 percent of total food sales—and will reach an estimated $35 billion in 2014, according to the Nutrition Business Journal.

Fresh fruits and vegetables have been the top selling category of organically grown food since the organic food industry started retailing products over 3 decades ago, and they are still outselling other food categories, according to the Nutrition Business Journal. Produce accounted for 43 percent of U.S. organic food sales in 2012, followed by dairy (15 percent), packaged/prepared foods (11 percent), beverages (11 percent), bread/grains (9 percent), snack foods (5 percent), meat/fish/poultry (3 percent), and condiments (3 percent).

Most organic sales (93 percent) take place through conventional and natural food supermarkets and chains, according to the Organic Trade Association (OTA). OTA estimates the remaining 7 percent of U.S. organic food sales occur through farmers’ markets, foodservice, and marketing channels other than retail stores. One of the most striking differences between conventional and organic food marketing is the use of direct markets—Cornell University estimates that only about 1.6 percent of U.S. fresh produce sales are through direct sales. The number of farmers’ markets in the United States has grown steadily from 1,755 markets in 1994, when USDA began to track them, to over 8,144 in 2013. Participating farmers are responding to heightened demand for locally grown organic product. A USDA survey of market managers. ERS research found that demand for organic products was strong or moderate in most of the farmers’ markets surveyed around the country, and that managers felt more organic farmers were needed to meet consumer demand in many States.

– Organic Price Premiums Remain High –

Over the last decade, USDA’s Agricultural Marketing Service (AMS) has expanded wholesale price reporting for organic fruits and vegetables, and added new price reports on organic grains, poultry and eggs, and sales volume for milk. Prices for organic products continue to be higher than for their conventional counterparts.

  • AMS Market News publishes organic prices for fruit and vegetable crops in a number of terminal markets where prices are collected, including Atlanta and San Francisco. See ERS data on organic farmgate and wholesale prices for a comparison of organic and conventional prices from 1999 to 2013.
  • Market News began reporting organic poultry prices in the weekly Organic Poultry and Egg report in January 2004. The report tracks prices paid to poultry or egg companies by the first receiver (such as a retailer, distributor, or manufacturer). See ERS data on monthly organic wholesale price averages for broilers and eggs, 2004-13.
  • In January 2006, AMS began reporting sales (in volume) of organic fluid milk products in monthly milk marketing order reports. See ERS data comparing monthly sales of organic and conventional milk products.
  • In January 2007, AMS began biweekly regional price reporting on organic grains, and now publishes single national grain and feedstuffs report available through the Market News website. ERS historical tables show national monthly grain and feedstuffs prices for 2011-13, and prior regional prices.

At the retail level, the two top organic food sales categories, receive significant price premiums over conventionally grown products. ERS also analyzed organic prices for 18 fruits and 19 vegetables using 2005 data on produce purchases, and found that the organic premium as a share of the corresponding conventional price was less than 30 percent for over two-thirds of the items. The premium for only one item—blueberries—exceeded 100 percent. In contrast, in 2006, organic price premiums for a half-gallon container of milk ranged from 60 percent for private-label organic milk above branded conventional milk to 109 percent for branded organic milk above private-label conventional milk. See the ERS report for more on this topic: Emerging Issues in the U.S. Organic Industry.

– Organic Consumers Are Increasingly Mainstream –

Numerous studies have been conducted on the buying habits and demographics of consumers of organic foods. Results have varied depending on the type of survey, sample size, and geographic coverage. However, a few general themes have emerged.

Consumers prefer organically produced food because of their concerns regarding health, the environment, and animal welfare, and they show a willingness to pay the price premiums established in the marketplace.

Organic products have shifted from being a lifestyle choice for a small share of consumers to being consumed at least occasionally by a majority of Americans. National surveys conducted by the Hartman Group and Food Marketing Institute during the early 2000s found that two-thirds of surveyed shoppers bought organically grown foods. For a literature review of organic consumer studies, see the ERS report: Recent Growth Patterns in the U.S. Organic Foods Market.

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