Organic industry sales grew by nearly 11%

Organic industry sales grew by nearly 11%

Dairy sales increased by more than 10%; condiment sales topped $1 billion for the first time.

The organic industry added $4.2 billion in sales in 2015, growing total product sales to $43.3 billion, and reported growth of 10.8%, according to the 2016 Organic Industry Survey released May 19.

Related: Number of organic operations grows by 12%

“Despite all of the challenges, the organic industry saw its largest dollar growth to date and the industry rallied together, investing in infrastructure, education and systems,” said Laura Batcha, CEO and executive director of the Organic Trade Association, in the report.

Highlights

Organic demand outpaces supply in dairy and grains. (Photo: Ihfgraphics/Thinkstock)

-Of the $43.3 billion in total organic sales, $39.7 billion were organic food sales, up 11% from the previous year, and non-food organic products accounted for $3.6 billion, up 13%.

-Condiment sales grew 18.5%, topping $1 billion in sales for the first time.

-The $13 billion organic fresh produce category grew at a rate of 10%.

-Dairy, the second largest organic food category, accounted for $6 billion in sales, an increase of more than 10%. Dairy accounts for 15% of organic food sales.

-The fastest growing subcategory was fresh juices and drinks, which grew at 33.5%.

-The second fastest growing subcategory was eggs, growing at 32%.

-Organic snack food sales grew almost 14% with sales of almost $2.3 billion.

-Nearly 5% of all the food sold in the U.S. in 2015 was organic.

-Major retailers Kroger, Costco and Target increased their organic offerings.

Challenges

-Demand outpaces supply in the dairy and grains area.

-There is a need for more organic acreage and programs to help farmers transition to organic.

-More consumer education is needed around what organic means.

Policy

-An organic checkoff is being discussed as USDA finalized a rule allowing U.S. organic producers and handlers to choose whether or not to pay into conventional checkoff programs or opt-out.

-The Organic Trade Association filed a request with USDA to amend the Federal Milk Marketing Order system to recognize organic dairies as separate from conventional dairies.

-Modifications were made to Risk Management Agency crop insurance policies to incorporate unique needs of organic farmers.

 “America’s organic industry is booming, creating important opportunities for farmers and ranchers and adding to the vibrancy of rural America,” said Agriculture Secretary Tom Vilsack. “As consumer demand continues to grow, USDA is here to support producers and help them access the hunger for American-grown organic products.”

USDA investments

-USDA invested nearly $261 million over the past seven years in research to improve the productivity of organic ag.

-Certified more than 21,900 organic operations to date, a nearly 300% increase since 2002.

-In 2011, USDA began offering crop insurance for organic producers to reflect market prices.

-Establishing equivalency agreements with Canada, the European Union, Japan, Korea and Switzerland that allows U.S. organic producers to reach consumers throughout the world.

-Made market and pricing information available for about 250 organic products free of charge through USDA’s Market News.

Related: USDA proposes changes to USDA's poultry, livestock production practices

Source: OTA, USDA

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