How Organic Snack Demand is Affecting U.S. Producers

Years ago, many consumers were willing to pay more for organic foods than they were for non-organic foods because they believed the production of organic foods left a smaller carbon footprint on the earth. While environmental concerns are still a big motivator for a lot of people to buy organic goods, plenty of today’s food shoppers want to buy organic foods because they think organic goods are healthier and safer than their conventional food alternatives.

In the war of organic vs. conventional food, consumer demand for organic food is outpacing the available supply in the United States. Less than one percent of the land dedicated to agriculture in America is certified organic, meaning the vast majority of the country’s farmland is used to produce non-certified organic foods and traditional crops instead of organic food.

Given the current organic demand for snack foods and other organic products, approximately 3 to 6 percent of the nation’s agricultural land would have to be dedicated to the production of organic food to keep up.

In 2015, almost 4.4 million acres were dedicated to the production of organic food in America, an increase of 20 percent compared to the previous year. Three hundred more farms had land in transition to becoming organic in 2015 compared to 2014, according to the U.S. Department of Agriculture.

Barriers to Change

Even though farmers can charge a premium for the organic food they grow, they’re often reluctant to make the change from conventional farming methods to organic ones. The barriers that make it difficult for a farm to go organic include:

• Transition Time: It generally takes three years to transition from a traditional farm to an organic one. During that time, it’s not unusual for farm sales to fall. While farmers often recoup the losses they may experience during the three-year transition period once the shift to organic is complete, the prospect of losing revenue for three years prevents many farmers from making the transition to organic.
• Lack of Local Resources: While some cooperatives and other organizations can help farmers make the move to organic, the usual local resources farmers rely on, such as extension agents and water and soil conservation districts, aren’t usually knowledgeable about what a farmer needs to do to make their property organic.

Organic Producers of Healthy Snacks Need to Get Creative

With consumer demand for organic foods growing at 5 to 8 percent per year, organic producers of healthy snacks will have to get creative if they plan to even attempt to keep up. One food giant did just that in order to secure the dairy supply it needed to make its organic yogurt line a success and satisfy consumer demand for its organic products.

During the transition to becoming organic, the USDA requires two years for the land that grows the crops that go into the farm’s feed and another year for the cows to eat that feed before they’re certified organic. This increases a farmer’s operational costs during the shift to organic, but the farmer has to wait until the transition is complete before they can charge a premium for their dairy products.

To prevent transitioning farms from losing money and secure its supply of dairy products for its organic yogurt products, the giant food manufacturer referenced above agreed to pay the difference between what traditional and organic markets would pay certain farms for their milk. The company agreed to do this for 20 large farms throughout their transition period. As a result, the company added 3,000 acres of organic production to its source pool for a number of years.

Deals like this one demonstrate the creativity the organic producers of healthy snacks will have to employ to keep up with the growing demand for their products and ensure their future supply of organic foods.