The market for organics is changing, fast. According to a new report published this week in The Wall Street Journal, sales of organic crops are soaring, but the prices paid for those products are dropping steadily due to increased imports and new competition in the form of mass-market grocery chains, forcing U.S. farmers to question the long-term stability of the price premiums that many organic producers now enjoy.
“U.S. organic-farming groups say that influx of foreign grain has been a chief factor in slashing prices for organic corn by about 30% in 2016, along with a 20% decline for organic soybeans. Those declines came despite robust growth in U.S. sales of organic foods—and far underperformed prices for nonorganic corn and soybeans. USDA-certified organic food sales in 2016 climbed 10% to $12.3 billion, versus a 0.7% increase in conventional grocery sales, according to Spins LLC.”
This is creating new challenges for farmers, who must now do more with less in order to continue to grow crops that meet stringent U.S. organic standards despite falling commodity prices.
However, this shift has created new opportunities for companies like Benson Hill Biosystems, Holganix and Agrible, which are helping farmers lower the cost of producing organic crops. Benson Hill is improving organic crop performance through plant biology and big data analytics. Holganix’ organic probiotic helps farmers improve profitability by increasing yield while simultaneously reducing the amount of water, fertilizer and other inputs required.. Agrible is another example, leveraging field-level data analytics to help producers and customers ensure that they are truly getting the organic products for which they are paying.
Organics are more popular now than ever, and companies like these are making it possible for farmers to continue to meet this demand while saving on cost of production at the same time.
Contact us to learn more about any of these companies and the work they are doing to improve the U.S. organics market.