Iowa Farmer Today
by Gene Lucht

ODEBOLT — Roger Lansink has no illusions about organic agriculture saving the world. However, he knows the money he makes growing organic crops is no illusion. He also knows when he manned the Iowa Organic Association’s booth at the Iowa State Fair, he couldn’t keep enough brochures on the table.

“I think the outlook is good,” he says. “I don’t think enough producers will switch to organic and meet the consumer demand in the next five years.”

It’s an optimistic outlook shared by many in the industry.

“The demand is pretty strong (for organic food and feed products),” says LaVerne Klecker, manager at SunOpta, an organic processor in Hope, Minn.

There was concern when the world economy tumbled in late 2008 that it would lead to reduced consumer demand for organic products, says Joe Ward, president of the Iowa Organic Association.

But, consumer demand, for the most part, has remained strong.

“It, surprisingly, has not dented the enthusiasm,” says Donna Prizgintas, a chef who has worked with organic products for more than 30 years. “We’re still like the golden child.”

Of course, the fact consumers still like organic products does not mean they are willing to pay unlimited premiums when buying the products.

When the economy dipped, consumers went to fewer high-end restaurants. They cut back on some supermarket items.

Those trends affected the organic market. A market that had seen double-digit growth for years slipped.

Statistics show consumer purchases of organic goods grew by close to 19 percent in 2008. It then dropped to about 4 or 5 percent the following year before recovering to the 10 percent range now, says Margaret Smith, head of the value-added ag program at Iowa State University.

“There’s still a great deal of brand value to the word ‘organic,’ ” says Brent Borchardt with Campbell’s Nutrition in Des Moines.

But, he and others say the value doesn’t mean organic producers or processors can charge unlimited amounts for their products.

It just means many consumers prefer organic products when the price is equal and are willing to pay some premium for them or are willing to pay a premium for some selected products.

Organic eggs, for example, have sold well in recent years. There is also a large organic broiler industry, and organic pork demand has jumped.

Still, there are issues facing the industry.

One issue is the internationalization of the market. When Walmart started selling organic food products from China, many producer groups were upset.

Also, there has always been friction in the industry between organic producers and others who stress locally grown food.

The two are not necessarily the same thing.

But, for many in the business, the international issue is not as much a matter of locally grown vs. food from overseas, Ward explains. It is often an issue of the whether organic producers from other nations are facing the same stringent inspections and requirements as organic producers in this country.

The locally grown vs. organic debate isn’t likely to go away soon either. But, of more importance to Lansink and many other producers is the issue of organic vs. natural. The difference is there is no certification for “natural” or “healthy” or other designations.

Organic is an official designation meaning producers have met a number of stringent production requirements. That includes a three-year process during which they must have used organic methods.

For example, a certified organic cornfield or soybean field must not have been sprayed with Roundup during those three years. Organic livestock must have been fed organic feed.

The bottom line is organic producers must meet those requirements, and they want consumers to know producers selling “natural” products haven’t gone through the same certification process.

Another challenge facing organic producers is the distance to processing facilities. As a niche market, those who sell to a processor often must travel far.

Finding slaughter facilities for organic livestock, for example, is a problem for many.

A fourth issue is insurance. One part of that problem appears to be lessening, Lansink says.

A few years ago, crop insurance for organic corn or soybeans, for example, was based on the commodity price for the product. A farmer who produced an organic crop wasn’t rewarded for that lost premium during the insurance process.

That is better now with changes in federal crop insurance in recent years.

But, getting crop insurance for a few acres of a niche crop is still difficult. At the very least, the producer must develop a three-year yield history rather than depending on a non-existent county average yield.

Still, despite all those challenges, organic producers in Iowa and the surrounding Midwest states remain positive.

They say consumers have proven over the past four years even in poor economic times, many of them prefer organic foods and are willing to pay at least some premium for those goods.

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