Gredig: Is Organic Losing its Luster?

The Term “Organic” Losing its Luster

I’ve watched the organic farming movement with interest over the past 10 years or so. It’s not because I have any philosophical motivation to become an organic producer – I’m interested because smaller scale crop operations have to look for every opportunity to derive more revenue and margin from every acre.

I have great respect for those producers who make the commitment to an organic production system and make it work. It requires a significant step-up in management and there is a steep learning curve to farming without herbicides and chemical fertilizers.

Having said this, I’ve not made the jump for a number of reasons. Time and labor constraints being one – I’m not sure that I could be as efficient as I am now, and hiring more labor is not an attractive option for me. Secondly, I’ve been somewhat skeptical about the future of organic premiums and here’s why. Organic farming is not unlike any other innovative production system, whether it be no-till, strip-till or some other alternative to traditional methods. The common path is that smaller scale, innovative producers latch on to an idea, work to perfect it and learn all the hard lessons as they cut the path. Early adopters watch from the sidelines, and when there is a reasonable expectation for success, they jump in and improve on the process and take it to a larger scale. Ultimately, large scale conventional producers look at the economics and realize that their economies of scale enable them to derive larger benefits from the innovation and they go for it.

This pattern holds for organic food production, or at least it was headed in that direction. The strange thing about organic farming is that it brings with it a lot of philosophical and emotional baggage. Many people have difficulty looking at it as simply another production/business model. For some, a move to organic is all about a deep seated mistrust of major agri-business corporations. For others, it’s about a perceived benefit to the environment. It can be even be a lifestyle choice. For me, it would be all about profitability.

I’ll admit I’m less interested in organic production than I was a couple of years ago. The fickle consumer is showing less enthusiasm for more expensive organic food as the recession hits many food buyers in the pocketbook. Also, the marketers have been quick to grab the word “organic” so it’s difficult for consumers to know what the word really means anymore. Recently I heard of an individual selling “organic” firewood at a local folk festival – sheesh. And a recent study by the London School of Hygiene and Tropical Medicine found no real nutritional advantage to organic food compared to conventional.

But the real deterrent for me is the simple fact that as large scale producers enter the organic realm, per unit premiums for organic production will also come down. There are organizations that say a 12,000 head organic dairy farm is not what the organic movement is all about, but if Wal-Mart is going to sell organic milk, it’s going to come from large production units. Supply and demand rules, whether it’s organic or not and there is no way to regulate this sector to keep the big guys out.

For now, I’m on the sidelines. Nothing against the organic business model, but it’s not for me at this point.

What about you? Have you moved to an organic program? Have you considered a shift to organic? Will this niche market continue to grow or suffer some speed bumps?

Click here to join the discussion.

Peter Gredig
Farms.com Media
Peter.Gredig@Farms.com

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