Forces impacting the production of organic foods

In recent years, the organic industry has grown not only in volume but in products offered, moving well beyond fresh produce into dairy, snacks, and frozen foods. The mix of commodities produced at the farm level have and will continue to change in response to several dynamic forces, including consumer demand, regulation, and consolidations, mergers, and mainstream entrants at the farm, manufacturing, and retail levels. The recent allowance by USDA for the labeling of meat and poultry as organic will accelerate already heightened demand for organic grain and feed from the organic dairy industry. Although the fastest growth in organic foods has been in categories other than produce, clearly produce plays an important role in the consumers decision on where to shop, and demand should increase with the overall increase in the number of organic consumers. Market outlets now include sophisticated natural food store chains, gourmet specialty stores, and e-commerce, allowing for a broadened array of products. Mainstream agricultural producers, manufacturers, and supermarket chains have entered the organic marketplace at a time of low prices for commodities at the farm gate, fierce competition for retail shelf space, and increasingly sophisticated targeting of consumers. Inevitably, these changes in food products offered and in retail outlets will lead to an organic agriculture that increasingly resembles the conventional food industry.