Farmers struggle with lower prices as organic grain imports grow

23.02.2017

Organic grain is flooding into the US, depressing prices and drawing complaints from domestic organic farmers who fear their harvests are held to stricter standards than foreign-raised crops.

Turkey, for instance, vaulted ahead to become by far the biggest supplier of organic corn and soybeans to the US last year.

The Mediterranean country in 2016 shipped 400,000 tonnes of organic corn to the US, nearly quadrupling its prior-year total, while its soybean shipments climbed by more than eight times, US Agriculture Department data shows. Other key suppliers to US organic-food companies are now Ukraine, Argentina, Romania and India.

The rising imports reflect how US consumers’ appetite for organic products, produced without synthetic pesticides, genetically engineered seeds and certain fertilisers, are challenging food companies to keep up. Giant meat producer Tyson Foods is the latest to eliminate antibiotics used on poultry. Other meat and egg companies such as Pilgrim’s Pride, Perdue Farms and Cal-Maine Foods are also expanding organic production, boosting demand for organic animal feed and prompting companies to seek corn and soybeans grown overseas. In the past year, a stronger US dollar has also made foreign-produced crops cheaper.

US organic-farming groups say foreign grain has been a chief factor in slashing prices for organic corn by about 30 per cent last year, along with a 20 per cent decline for organic soybeans.

Those declines came despite robust growth in US sales of ­organic foods — and far underperformed prices for non-organic corn and soybeans. USDA-certified organic food sales in 2016 climbed 10 per cent to $US12.3 billion ($16bn), versus a 0.7 per cent increase in conventional grocery sales, according to Spins.

Those figures don’t include sales from Whole Foods Market Inc, a major organic retailer.

The Organic Trade Association, which estimates sales for Whole Foods and other retailers not measured by Spins, put US sales in 2015 at $US39.7bn for foods containing 70 per cent or more organic ingredients.

Some organic farmers in the US contend that overseas organic farms benefit from looser oversight, giving them an edge over domestic farms. They point to past failures among foreign-based organic operations in following US organic standards, and occasional cases of fraud. Now US groups want US authorities to step up scrutiny of organic operations in Turkey and other Eastern European countries, and provide more support for US organic farmers.

“What we’re after is a fair shake,” said John Bobbe, executive director of the Organic Farmers Agency for Relationship Marketing, a Minnesota-based organic-farming co-operative that has filed complaints with the USDA over the matter.

USDA officials say all organic operations are held to the same standards, but the agency is investigating the complaints and discussing new requirements to tighten oversight.

Nate Lewis, farm policy director for the Organic Trade Association, representing US organic-food companies and farmers, said the group has “confidence in the USDA’s system”.

Still it urged the US Department of Agriculture last July to require all organic imports to include certificates that allow the crops to be traced back to the overseas farms where they were grown, beyond the firm that bought and transported the crops.


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