US organic sales exceeded $43bn in 2015 – report

Despite record production, a report by the Organic Trade Association says the supply chain must improve to meet growing US demand.

US organic sales grew to $43.3 billion in 2015, but growth is constrained by the supply chain, according to a survey by the Organic Trade Association.

Organic food products accounted for $39.7 billion of sales, an 11 percent increase over the previous year. That compared with 3 percent growth in the overall US food market.

“Organic is a bright spot in agriculture and the economy of America,” said Organic Trade Association chief executive Laura Batcha.

However, the report said growth was constrained by limitations on the US organic supply chain. Despite increased availability of the goods from mainstream retailers, farm acreage does not match growing demand.

Organic condiments was the fastest growing organic category, with a 18.5 percent increase in sales since 2014 to more than $1 billion.

The $3.6 billion in non-food organic sales, led by clothing fibres and organic supplements, represents a 13 percent increase since 2014.

Investors in the organic agri sector have told Agri Investor that upstream development and a more robust supply chain are vital for the market to reach its full potential.

Certified organic farming and agribusiness operations in the US increased by almost 12 percent between 2014 and 2015, reaching a total of 21,781 certified producers, Agri Investor reported in April.

The US consumes nearly half of the world’s organic agricultural output, while hosting just 2 percent of its organic acreage. It is the third biggest producer in the sector with 5.4 million hectares dedicated to organic production, behind Argentina’s 7.7 million and Australia’s 42.5 million hectares.