Southwest and Northeast driving growth in US organics

Nevada, Pennsylvania and New York led the US in adding organic farmland acreage amid an overall 2 percent increase last year, according to Mercaris, a Maryland-headquartered company offering organic and non-GMO commodity auctions and analysis.

According to statistics from Mercaris’s latest Organic Acreage Report, released this week, overall organic acreage in the US expanded by 2 percent last year to a total of 6.4 million acres. The report also said there was a 3 percent increase in the number of farming operations that have been certified as compliant with the USDA’s National Organic Program to 17,648 farms.

Nevada added more than 16,000 acres of organic production last year, according to the report. That addition brought the state’s total organic acreage to 55,164 acres and outpaced additions of 13,688 acres in Pennsylvania and 11,116 acres in New York.

“They [Nevada] added a fair amount of acres,” Ryan Koory, a senior economist at Mercaris, told Agri Investor. “It could be the fact that we are seeing a rise in organic dairy down in the Southwest. There are large plants that have gone in in Texas and, I think, Colorado that could be fueling some of that.”

Koory said that much of the growth in organic acreage observed last year was concentrated in the Corn Belt and Northeastern states including Pennsylvania, New York and Ohio.

“It’s growing where the demand is,” Koory summarized. “The demand for the organic sector continues to be livestock and that’s [the Northeast and the Corn Belt] where the majority of your large poultry and the majority of the organic dairy production occurs.”

Though the numbers in the 2018 annual report reflect a slower pace of growth in acreage than the 15 percent annual increase reported in 2017, Koory said that fact should not distract from the ongoing longer-term story of the market gradually adjusting to meet organic demand, which remains far ahead of supply.

“Expansion is really starting to focus more in those key demand areas,” Koory said. “In lots of the Corn Belt, too, it’s growing in places where conventional agriculture has a pretty strong toe-hold. It looks less boutique and it looks less – not to say random – but sporadic across the country. It looks more focused.”

Steve Bruere, president of Iowa-headquartered farmland broker, manager and investment service provider Peoples Company, told Agri Investor that recent conversations in the market do, in fact, reveal an intensified interest in organic agriculture.

From individual farmers and investors to service providers and logistics providers, Bruere said that many connected to farmland markets are currently examining how the need to meet growing demand for organic food will shape land values, rents and the role of institutional investors.

“It used to be, on organic, that conventional farmers weren’t paying that much attention to it. Now, its hard to go through a day where you’re not involved in some sort of organic conversation,” Bruere said. “It’s just really becoming mainstream.”