Some organic produce enthusiasts are cheering about its increasingly widespread availability. They say it's about time that huge retailers like Safeway, Costco, and even Wal-Mart have begun to add organic products to their shelves. With the market beginning to boom, some of the world's largest food manufacturers are beginning to jump on the bandwagon, as well, such as Kellogg's, Kraft, and General Foods. Isn't that good news for advocates of healthier food?
The answer is a qualified maybe. It's a simple case of the time-proven law of supply-and-demand. The organic market has been growing steadily for decades, and once the numbers were there, it was inevitable that the big companies would step in to grab a share of the market. Some less enthusiastic organic foods advocates have expressed concern that having the giant retailers move into the market will ultimately weaken certification standards and hurt small farmers who have been able to capitalize on serving the organic niche market in order to survive.
The market share for organic produce is still miniscule, accounting for less than 3 percent of U.S. retail food sales in 2005, but the numbers are still impressive: $14 billion in sales and increases of 16 percent for organic produce, 24 percent for organic milk, and a whopping 55 percent rise in organic beef sales over the past year. Certified organic products typically sell at a 20-30 percent premium over similar non-organic ones. Given numbers like those, it's not surprising that the nation's mega-retailers are beginning to get excited by the possibilities for future growth.
However, there is growing concern that as factory-style farms move into the organic area to fill the demand from giant retail chains, the certification process may be lessened to allow those huge farms to meet the specifications. Those fears were given some credence when a recent report by the Cornucopia Institute discovered that two of the largest organic dairies in the nation keep their cows primarily in huge feedlots with little or no chance to graze on pasture.
At the moment, the demand for organic milk outstrips supply, but if the trend continues (and there's no reason to believe it won't), it could cause genuine problems for small farmers, who have been all but squeezed out of nearly every other phase of agriculture, but managed to find a market niche that allowed them to stay in business.
One of the biggest effects on the market will be retail giant Wal-Mart's demand for considerably lower prices. That means smaller profit margins for suppliers, but it could also mean a further loosening of certification standards in order to meet the demand and the low prices Wal-Mart would expect. Where will it all lead? It's too early to tell, but if the current trend continues, it would appear that the consumer cost of organic produce and meat is going to become more affordable. However, it's yet to be determined how much loosening of the certification guidelines will take place in order for that to take place.
Copyright 2006 Jeanette J. Fisher |
