1. Organic Production and Horticulture AEC 317 Fall 2014

2. Organic Produce Markets  Initially grass roots program  Movement toward commercialization led to state-by-state certification  Flexible to growing region  But variable standards across states  Cap on market scale  Push by national and regional retailers for universal standards  2002 USDA National Organic Standards adopted

3. The USDA Program http://www.ams.usda.gov/AMSv1.0/nop  Inputs and practices governed by National Organic Standards Board  Limits pesticides, fertilizers, no genetically engineered products  Third party certification and enforcement  Unlawful to wrongfully use term “organic” without certification

4. Farm Bill Spending to Support Organic Agriculture Source: USDA Organic Agriculture

5. Organic Food Growth in U.S. Markets  Broader interest in organic food  20% annual growth for last 10 years  $6.1 B in 2000  $14 B 2005  $21 B 2008  $24.8 B in 2009  $26.7 B in 2010  $29.2 B in 2011  $32.3 B in 2013  Organic food sales channels (08/10):  47%/54% Conventional Supermarkets  44%/40% Natural Food Stores  9%/6% Direct Marketed Sources: Dimitri & Greene, 2002; USDA ERS-Oberholtzer, Dimitri & Greene, 2005; Organic Trade Assoc., 2004; Tondel & Woods, 2006; Greene et al 2009; Greene at al, 2010, Food Facts – Organic Trade Assoc. June, 2010.

6. Sales of Organic Products in U.S. 2013 Organic Trade Association Press Release, May, 2014

7. Other quick facts  In 2010, U.S. surpassed the European Union as the largest market for organic products in the world.  Organic food and beverages represents 4% of all U.S. food and beverage sales (2013)  Gross retail food sales in U.S., all foods, $760 B  Organic food/beverage comprises 92% of sale of all organic products (cotton, pet food, hay, etc.)

8. Organic trends  Fresh produce accounts for 42%/38% of all organic food sales - - about 10% of all produce sales in U.S. are organic.  1/3 of organic produce sold under contract  Trend towards larger growers & direct to retailer sales  Still tiny in KY: 111 farms (all products)  State trade association: Organic Association of Kentucky

9.  Organic Trade Association Organic Trade Association  http://www.ota.com/  USDA Programs in Organic/Sustainable Ag  Sustainable Ag Research and Education Sustainable Ag Research and Education  Profit, stewardship, quality of life

10. Some of the Issues 1. International growth and marketing of organic – what are the standards?:Equivalency agreements 2. Expansion of GMO production:Industry pushes for mandatory GMO labeling 3. Scale production economies lower costs, but also premiums 4. Growth in other eco-labelsother eco-labels