Organic agri market exceeds $80bn – report

The global market for organic agricultural products grew by $8 billion to $80 billion in 2014 according to a new report by the Research Institute of Organic Agriculture and the Agricultural Market Information Company.

The World of Organic Agriculture – Statistics & Emerging Trends 2016 reported that North America and Europe accounted for more than 90 percent of organic sales in 2014, despite being home to just a third of the world’s organic farmland. Oceania, defined by the report as Australia, New Zealand and the Pacific Islands, made up nearly half of the world’s organic agricultural land, with 17.3 million hectares.

Growth in the US and European organic markets was driven by sales moving from specialist shops to mainstream grocers. For the first time ever, more than half of organic food sales in the US came from mainstream grocery stores in 2014. International trade agreements on standards for organic products have also helped boost the market, according to the report.

The European organic market grew to $29.2 billion in 2014, representing year on year growth of 7.6 percent, and the EU accounted for $26.6 billion of these sales. Organically farmed land made up 5.7 percent of cultivated land in EU countries, more than double the 2.54 percent ratio for the entire continent. Germany’s organic sales were worth $8.8 billion, making it the world’s second-largest organic market behind the US.

The US was worth $30 billion in sales and representing 43 percent of the global market. Americans consumed $97 a head of organic food and beverages in 2014 on average, compared to just $41 in the EU.

The US was the world’s third-largest producer of organic goods, measured by hectares of agricultural land (2.2 million hectares, compared to 3.1 million in Argentina and 17.2 million in Australia). The US,  however, has just 2 percent of the world’s organic agricultural land, despite consuming nearly half of the world’s organic production. The organic market for all of North America was worth $35.9 billion.

As previously reported by Agri Investor, US farmers can enjoy significant premiums for producing organic goods. However, the cost in time and capital to convert land to organic production represent a prohibitive barrier to many US growers. The US Department of Agriculture announced this month an expansion of crop insurance that allows growers to insure crops at a higher value while transitioning to organic production.

Source: The World of Organic Agriculture – Statistics & Emerging Trends 2016.