The number and variety of consumers of organic products has increased, but those consumers are not easily categorized. The one factor that consistently influences the likelihood of a consumer’s buying organic products is education. Consumers of all ages, races, and ethic groups who have higher levels of education are more likely to buy organic products than less-educated consumers. Other factors, such as race, presence of children in the household, and income do not have a consistent effect on the likelihood of buying organic products.
Retailing of organic products has evolved since 1997, when natural foods stores were the main outlet. By the late 2000s, nearly half of all organic foods were purchased in conventional supermarkets, club stores, and big-box stores. Although produce remained the top-selling organic category, sales of dairy products, beverages, packaged and prepared foods, and breads and grains had reached significant levels.
On the wholesale level, by 2007, the share of organic handlers’ sales to conventional retailers and club stores increased, while the share of sales to wholesalers and other distributors declined. Organic handlers are firms that buy organic products from farmers and other suppliers, process or repack the goods, and then sell the value-added resulting products to retailers, institutions, and other handlers, or directly to consumers or restaurants. Because of the competition for organic ingredients, handlers in recent years have relied on contracts versus spot-market sales to procure needed inputs.
While organic farmland acreage increased from 1997 to 2005, growth was not swift enough to prevent periodic shortages of some organic products. Certified organic farmland designated for raising grains and soybeans grew slowly, placing pressure on sectors such as dairy and meat sectors that depend on these inputs. The 2002 USDA National Organic Standards regulation in most cases requires farmland to be dedicated to organic farming for 3 years before that
farm’s products can be labeled as organic. This creates a lag between increases in retail demand and supply from farms.
Sunday, October 04, 2009
This is from the summary of an ERS report on organic farming: