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Farms selling directly to consumers saw smaller increases in sales than other farms between 2007 and 2012

Thursday, April 7, 2016

Between 2007 and 2012, farms using direct-to-consumer (DTC) marketing had smaller growth in nominal gross sales (13.5 percent), on average, than farms using traditional marketing channels (19.3 percent). In addition, gross sales on farms using DTC marketing grew more slowly in each size class (as measured by 2007 sales). The slower growth for farms with DTC sales may stem from several factors. The 2012 Census of Agriculture shows farms using DTC marketing employ substantially more labor across all sales categories than farms without direct sales. Therefore, farms with DTC sales may need to hire additional workers at a lower scale of production, and the associated transaction costs may provide an obstacle to growth. Off-farm income opportunity may also play a role, as farms with DTC sales are more likely to have total household incomes both less than $50,000, and less than $20,000. The lower total household income for farms with DTC sales may reflect fewer off-farm income opportunities, leading these farms to continue farming even if they have less ability to expand production. This chart is found in the March 2016 Amber Waves feature, “Local Foods and Farm Business Survival and Growth.”

Verified non-genetically engineered products see steady increase since 2010

Monday, April 4, 2016

Genetically engineered (GE) crops are now widely used to produce breakfast cereals, corn chips, soy protein bars, and other processed foods and food ingredients, and a market for foods produced without crops grown from GE seed has emerged. The Non-GMO Project is a private group that provides verification services for products made according to best practices for genetically modified organism (GMO) avoidance. In 2014, the Non-GMO Project Verified label appeared on nearly 12,500 products with unique universal product codes (UPC), up from fewer than 1,000 in 2010. Many of the food products verified under this protocol, and bearing the Non-GMO Project Verified butterfly logo, are not at risk of GE contamination: that is, they do not contain corn, soybeans, or other crops for which GE varieties are available. Also, over half of the products verified under this protocol are certified organic under USDA’s organic regulations, which already prohibit the use of genetic engineering in organic production and processing. Non-GMO Project Verified labeling currently accounts for most of the conventionally grown U.S. products that are non-GE verified. This chart appears in the ERS report, Economic Issues in the Coexistence of Organic, Genetically Engineered (GE), and Non-GE Crops, February 2016.

Farms with direct-to-consumer (DTC) sales had higher rates of business survival between 2007 and 2012

Tuesday, March 8, 2016

Direct-to-consumer (DTC) marketing—where producers engage with consumers face-to-face at roadside stands, farmers’ markets, pick-your-own farms, onfarm stores, and community-supported agricultural arrangements (CSAs)—brings benefits for consumers as well as the farm businesses. According to Census of Agriculture data, farmers who market food directly to consumers had a greater chance of remaining in business than those who market through traditional channels. Sixty-one percent of farms with DTC sales in 2007 were in business under the same operator in 2012, compared with 55.7 percent of all U.S. farms. Based on a comparison of farms across four size categories (defined by annual sales), farmers with DTC sales had a higher survival rate (measured as the share of farmers who reported positive sales in 2007 and 2012) in each category. The differences in survival rates were substantial—ranging from 10 percentage points for the smallest farms to about 6 percentage points for the largest. This chart is found in the March 2016 Amber Waves feature, “Local Foods and Farm Business Survival and Growth.”

Certified organic corn was planted later than GE corn in 2010 to avoid cross-pollination

Friday, February 26, 2016

U.S. farmers used genetically engineered (GE) seed varieties that contain traits to tolerate herbicides used for weed control and/or to resist other pests on over 90 percent of corn acreage in 2015. To receive the price premiums associated with organic and other non-GE crops, these producers must minimize the unintended presence of GE materials in their crops. Organic and other non-GE farmers use various practices—including the use of buffer strips to minimize pesticide/pollen drift and/or delaying crop planting until after any nearby GE crops are planted—to prevent their crops from commingling with GE crops. While some field crops are mostly self-pollinating, most corn pollination results from pollen dispersal by wind and gravity. In USDA’s most recent (2010) corn survey of conventional and organic producers in top corn producing States, delayed planting was reported on two-thirds of planted organic corn acreage. While this strategy helps protect against commingling of GE and non-GE crop pollen, growers may realize lower yields from planting at a suboptimal time. This chart is found in the ERS report, Economic Issues in the Coexistence of Organic, Genetically Engineered (GE), and Non-GE Crops, February 2016.

Nearly half of all organic farms sell through local food markets

Monday, October 26, 2015

In 2012, fewer than 5 percent of farms with local food sales were organic farms (either certified organic, or certification-exempt farms because annual organic sales were under $5,000). However, nearly half (46 percent) of all organic farms sold food commodities through direct-to-consumer outlets (such as farmers’ markets and community supported agriculture arrangements), and/or through intermediated marketing channels (such as restaurants and retail outlets). Over the 2007-12 period, direct-to-consumer outlets continued to be the most frequently used local food marketing channel for selling organic—41 percent of organic farms used this marketing channel in 2007 versus 39 percent in 2012. Certification-exempt farms, which often tend to be very small and/or beginning farmers, are also more likely to rely on local markets. In 2012, they were twice as likely as certified organic farms to use direct-to-consumer outlets (63 percent versus 32 percent). This chart is found in Trends in U.S. Local and Regional Food Systems: A Report to Congress, January 2015.

Growth in certified organic field crop acreage has been rapid, but uneven

Tuesday, July 28, 2015

U.S. crop acres under USDA certified organic systems have grown since the National Organic Program was implemented in 2002. Organic crop acres increased from about 1.3 million in 2002 to almost 3.1 million in 2011, and part of this growth was in major field crops: corn, soybeans, and wheat. Among these 3 crops, certified organic production of corn increased the most, from about 96,000 acres in 2002 to 234,000 acres in 2011. Certified organic soybean acreage peaked at 175,000 acres in 2001, before falling to 100,000 acres in 2007 and rebounding to 132,000 acres in 2011. Wheat has the largest number of organic acres, starting at 225,000 acres in 2002 and peaking at more than 400,000 acres in 2008, before falling to 345,000 acres in 2011. Much of the increased organic corn production has been to support a rapidly growing organic dairy sector. Higher prices for conventional corn, soybeans, and wheat since 2008 and somewhat slower demand growth for organic products due to the economic recession, along with increasing imports of these crops, may have limited the growth in organic field crop acreage in recent years. This chart is from the ERS report, The Profit Potential of Certified Organic Field Crop Production, July 2015

Produce farms account for about half of all local food sales

Friday, June 5, 2015

In 2012, 34 percent of all U.S. produce farms—those producing vegetables, fruit, or nuts—sold food through local food marketing channels, whereas only 3 percent of field/other crop farms and 8 percent of livestock/livestock product farms did so. The nearly 48,000 produce farmers with local sales in 2012 represented 29 percent of all local food farmers but generated $3.1 billion, or 51 percent of all local food sales. Farmers have two main channels through which to sell their food locally: directly to consumers (at farmers' markets, roadside stands, farm stores, etc.), and through intermediated marketing channels (defined to include sales to grocers, restaurants, schools, universities, hospitals, and regional distributors). Among local food farmers who elected to sell through direct-to-consumer outlets, intermediated marketing channels, or a mixture of both, produce farmers generated higher local food sales per farm than did field/other crop farms or livestock/livestock product farms. This suggests that opportunities to market locally are important to produce farmers, and their disproportionate presence (through local food sales) shapes the profile of a typical local food farm. This chart is found in the ERS report, Trends in U.S. Local and Regional Food Systems: Report to Congress, January 2015.

Organic corn returns exceed those from conventional

Thursday, September 18, 2014

In 2010, U.S. producers saw average returns of $307 per acre for conventional corn, compared with $557 per acre for organic corn, primarily because higher organic corn prices more than offset lower organic corn yields. Total operating and ownership costs per acre (seed, fertilizer, chemicals, custom operations, fuel, repairs, interest, hired labor, capital recovery of machinery and equipment, taxes, and insurance) were not significantly different between organic and conventional corn, although many of the individual cost components differed. Three major components of operating costs—seed, fertilizer, and chemicals—are lower for organic corn than for conventional corn, while some components of ownership costs—the capital recovery of machinery and equipment, and taxes and insurance—are higher for organic corn. Although the acres planted to organic corn nearly tripled between 2001 and 2010, organic corn accounted for less than 1 percent of total 2010 corn acres. Find this chart and additional analysis in Characteristics and Production Costs of U.S. Corn Farms, Including Organic, 2010.

Most U.S. organic exports are fresh fruits and vegetables

Monday, August 18, 2014

The United States has developed an active organic trade sector in recent years. In 2013, the United States exported organic products to over 80 countries, with Canada and Mexico being the top trade partners. The U.S. Department of Commerce began tracking the trade value of some organic products in 2011, and is expanding the number of organic items tracked. Each new organic product added to the trade code system must meet minimum requirements on product value and the number of importers and exporters. In 2013, the value of tracked U.S. organic exports was $537 million. Fresh fruits/vegetables is still the top organic sector in both production and sales in the United States, and dominates the trade items currently being tracked. Fresh and chilled fruits and vegetables accounted for over 90 percent of the Nation’s total organic export sales in 2013. The top three U.S. organic exports (in value) were apples, lettuce, and grapes. This chart is found in the August 2014 Amber Waves data feature, “U.S. Organic Trade Includes Fresh Produce Exports and Tropical Imports.”

Increasing U.S. organic food sales encourage growth in organic farming

Friday, July 18, 2014

U.S. organic food sales have shown double-digit growth during most years since the 1990s and were estimated to have reached over $34 billion in 2013. According to the Nutrition Business Journal, organic food purchases now account for approximately 4 percent of total at-home U.S. food sales. Certified organic farmland has also expanded, although not as fast as organic sales, as organic production of acreage-extensive feed grains and oilseed crops has lagged growth in other organic sectors. Fresh produce is still the top organic sales category, and California and other States that grow these high-value organic crops have experienced growth in organic acreage since the 1990s. Overall, acreage used for organic agriculture accounted for 0.6 percent of all U.S. farmland in 2011 (0.5 percent of all U.S. pasture and 0.8 percent of all U.S. cropland). Major retailer initiatives to expand the number of organic products they sell could further boost demand. The 2014 Farm Act includes provisions to expand organic research, assist with organic certification costs, and provide other support for U.S. organic producers. This chart is found in “Support for the Organic Sector Expands in the 2014 Farm Act” in the July 2014 Amber Waves online magazine.

2014 Farm Act increases spending to support organic agriculture

Monday, March 24, 2014

Federal support for organic production systems, including financial assistance for farmers completing the certification process and funding for organic research, has increased in each of the last three farm acts. The Agricultural Act of 2014 expands funding to assist organic producers and handlers with the cost of organic certification. Mandatory funding more than doubles from the 2008 Farm Act’s mandate to $57.5 million over the lifespan of the 2014 Act. Total mandatory funding to improve economic data on the organic sector continues at $5 million over the lifespan of the Act; another $5 million is added to upgrade the database and technology systems of USDA’s National Organic Program. The 2014 Act also expands total mandatory organic research funding to $100 million. This chart is found in ERS’ Highlights and Implications of the Agricultural Act of 2014.

U.S. certified organic acreage rebounded in 2011

Friday, November 1, 2013

According to new ERS estimates, the U.S. had 3.1 million acres of certified organic cropland in 2011 and 2.3 million acres of certified organic pasture and rangeland, continuing the long-term growth trend in this sector. Certified pasture dipped between 2008 and 2010 as sluggish growth in consumer demand during the recession dampened the short-term outlook for organic producers. However, the growth in certified acreage of pastureland has more than recovered those losses and has reestablished its upward trajectory. Certified pasture, including rangeland, shows variation from year to year, but certified cropland has been steadily increasing. This chart appears in "Growth Patterns in the U.S. Organic Industry" in the October 2013 Amber Waves and is based on data found in the ERS data product Organic Production, updated September 2013.

Farms involved in rural development related activities vary by type of activity

Thursday, March 28, 2013

While rural development efforts generally focus on the nonfarm economy in the United States, over the last 10 years, several USDA Rural Development programs have put increased emphasis on funding farm-related business activities associated with renewable energy, local/regional food industries, and the use of farm and ranch natural resources. Using data from the 2007 Agricultural Resource Management Survey, the characteristics of farms involved in organic farming, value-added agriculture, direct marketing, agritourism, and energy/electricity production are compared in this chart. Household wealth and income are important indicators of financial capacity, or the ability to make financial investments in farm activities. Average farm household net worth was highest for agritourism farms ($2.0 million) and lowest for direct marketing farms ($631,000). Total household income exhibited a different pattern and was highest for energy/electricity farms ($165,000 annually) and value-added farms ($90,000 annually), on average. The income generated by these rural development-related activities is considered part of farm income (which was highest, on average, for energy/electricity and organic farms, and negative for agritourism farms). This chart comes from the ERS report, Farm Activities Associated With Rural Development Initiatives, ERR-134, May 2012.

Consumer demand drives growth in the organic food sector

Friday, February 8, 2013

Organic food sales in the United States have increased from approximately $11 billion in 2004 to an estimated $27 billion in 2012, according to the Nutrition Business Journal. Organic food products are still gaining ground in conventional supermarkets as well as natural foods markets, and organic sales accounted for more than 3.5 percent of total U.S. food sales in 2012. Markets for organic vegetables, fruits, and herbs have been developing for decades in the United States, and fresh produce is still the top-selling organic category in retail sales. Although the annual growth rate for organic food sales fell from the double-digit range in 2008 as the U.S. economy slowed, its 7.4-percent growth rate in 2012 was more than double the annual growth rate forecast for all food sales in 2012. This chart appears in Agricultural Resources and Environmental Indicators, 2012 Edition, EIB-98, August 2012.

Organic and conventional operations differ in their characteristics and practices

Friday, November 2, 2012

The organic label is the most prominent food eco-label in the United States. In 2000, USDA published national organic standards that reflected decades of private-sector development. USDA regulations define organic farming as an ecological production system that fosters resource cycling, promotes ecological balance, and conserves biodiversity. In 2005, USDA began to include targeted oversamples of organic producers in its Agricultural Resource Management Survey (ARMS), which collects detailed information about farmers' production practices, as well as costs and returns in major farm sectors. Some of the differences in practices and characteristics of organic and conventional production systems are apparent from survey responses by soybean, wheat, apple, and corn producers. In general, organic acres are more likely to be owned by the operator, enrolled in a conservation program, have planting and harvest dates adjusted to control for pests, and use compost and manure. This chart can be found in the ERS report, Agricultural Resources and Environmental Indicators, 2012 Edition, EIB-98, August 2012.

Young operators are not uncommon on farms involved in rural development-related on-farm activities

Monday, August 13, 2012

Five on-farm rural development-related activities were examined in a recent ERS study. Using data from the 2007 Agricultural Resource Management Survey, the characteristics, such as operator age, of farms participating in organic farming, value-added agriculture, direct marketing, agritourism, or renewable energy/electricity production were considered. With the exception of agritourism farms, younger farmers (under 45 years of age) were more likely to operate development-related farms than they were for all other farms. Young operators were most common on energy/electricity farms (26 percent). Older farmers (65 years of age and older) played a larger role as operators of agritourism farms (40.4 percent) than for the other farm activities. This chart comes from Farm Activities Associated With Rural Development Initiatives, ERR-134, May 2012.

Coffee dominated U.S. organic import value for selected commodities in 2011

Thursday, April 12, 2012

As Americans have become more health conscious, the demand for organically grown food has increased. In response to this increased demand, the U.S. Department of Homeland Security, Customs and Border Protection began officially collecting data on trade of organic agricultural products last year. The chart compiles data now available for selected imports, including fruits, vegetables, coffee, tea, grains, and soybeans. For calendar year 2011, organic agricultural imports totaled $670 million (organic exports totaled $412 million). Just over $526 million in coffee was imported, with the majority of it unroasted. Organic coffee accounted for about 7 percent of total coffee imports. Organic products accounted for a fairly high share of import values of some products-for example, 46 percent of "other soybeans," 31 percent of black tea, and 20 percent of green tea imports were organic. This chart is made from data in the March 2012 Fruit and Tree Nuts Outlook, FTS-351.

Top U.S. apple varieties, conventional and organic, 2007

Wednesday, August 10, 2011

Data from the 2007 Agricultural Resource Management Survey show that the top five apple varieties-Red Delicious, Golden Delicious, Gala, Fuji, and Granny Smith-were the same in conventional and organic production, although the order differed between the two production systems. These five varieties accounted for over two-thirds of conventional and organic apple production in the surveyed States. Red Delicious, Gala, and Fuji are primarily fresh-market apples, while Golden Delicious and Granny Smith are "dual-purpose" apples that can be used in either fresh or processing markets. The top three varieties used by organic producers-Gala, Fuji, and Red Delicious-are all fresh-market apples, reflecting this sector's concentration in fresh-market production. This graph comes from Characteristics of Conventional and Organic Apple Production in the United States, FTS-347-01, July 2011.

Western U.S. has the highest number of organic dairy cows per farm but the fewest farms

Thursday, July 7, 2011

More than 80 percent of U.S. organic dairies were located in the Northeast and Upper Midwest, but these operations were smaller and less productive than those in the West. Only 7 percent of organic dairies were in the West, but these operations accounted for 31 percent of organic milk cows. Organic dairy operations in the Northeast averaged 53 cows; the Upper Midwest, 64 cows; and the West, 381 cows. Organic dairy cows in the West averaged nearly 16,000 pounds of annual milk production per cow, 2,700 pounds more than in the Upper Midwest and 4,000 pounds more than in the Northeast. This map appeared in the June 2010 issue of Amber Waves magazine.

Organic fruits and vegetables continue to lead organic sales

Friday, April 22, 2011

Once available only in natural product stores and farmers' markets, organic foods are now found in conventional supermarkets, value-priced big-box chains, and an expanding array of direct-to-consumer markets. U.S. organic food sales are expected to reach $25 billion in 2010, up from $3.6 billion in 1997. Organic products accounted for over 3.5 percent of food sold for at-home consumption in 2009. Produce and dairy products accounted for over half of organic food sales in 2009, followed by soymilk and other beverages, packaged foods, breads/grains, snack foods, condiments, and meat. Sales of other organic products (including herbal supplements, personal care products, flowers, linens, and clothing) started from a smaller base but are growing even faster than total organic food sales. This chart was originally published in the June 2010 issue of Amber Waves, in the feature article America's Organic Farmers Face Issues and Opportunities.