U.S. organic feed industry dangerously dependent on imports

09.11.2017

The U.S. organic feed industry has become dangerously dependent on imports, putting their operations at risk and removing the incentive for producers to increase domestic organic acreage, said Peter Golbitz, president of Agromeris.

“We need to decrease reliance on imports that can be grown easily and in abundance in the U.S.,” he said during his presentation at the Organic & Non-GMO Forum in St. Louis, Missouri, U.S., on Nov. 7. “We need to increase domestic production to help create healthier soils and greater farmer returns.”

Imports of soybeans and corn grew 50% between 2015 and 2016 to reach 926,000 tonnes, or nearly 50,000 full container loads, Golbitz said. Virtually all of this grain is going into the feed stream.

“Imports are growing more quickly than U.S. production,” he said, noting that in 2016 imported organic corn made up 46% of the U.S. supply and imported organic soybeans made up 75% of supply.

Imports are priced at or below U.S. production, which is discouraging domestic production and processing. The organic poultry market is at the greatest risk for constrained growth due to limited feed supply, Golbitz said.

Imports also present an integrity problem, Golbitz said. For example, Turkey’s organic imports into the United States exceeded the nation’s overall soybean production.

“This raises suspicion over origin and authenticity,” he said. “Where did that grain come from? How many hands did it pass through to get here?”

grain transportation
 
A Washington Post article from May identified several shipments of grain that magically transformed from conventional to organic during their travel to the United States. The article set off a chain reaction of response from the organic sector, including task forces, reports and a call for improved oversight and control procedures by the U.S. Department of Agriculture’s Agricultural Marketing Service (AMS).

“You need to go the extra mile if you’re an importer,” Golbitz said. “Get boots on the ground in the country of origin, and make sure you have all your t’s crossed and your i’s dotted. You have to make sure that your program exceeds what the market expects; it needs to be bullet proof. You need to be able to stand behind all of your organic production.”

Golbitz said there is a role for imports, particularly to balance supply and demand. But imports are not a long-term solution.

“I think it’s important that domestic supply get built out as quickly as possible,” he said. “U.S. buyers of organic feedstuffs need to make investments in U.S. production; we need logistics and infrastructure. There seems to be a concerted effort to build out that production domestically.”

There are opportunities for U.S. producers: The value of the imported grain last year was about $410 million and equivalent to 600,000 acres.

U.S. acres have been increasing at an average of 12.7% per year the past three years, but the need has increased 34.6%. At the current rate of growth of acres for soy and corn, it would take to 2025 to produce what is needed for 2016, Golbitz said.

Farmers considering the switch to organic production need to view the three-year transition period as an investment, according to a panel discussion featuring three organic producers. Ideally they should prepare ahead of time, attending seminars and workshops and talking to farmers who have already been through the process, said Dave Bishop, farmer, PrairiErth Farm.

It is a long process, he said, and profitability will depend on where a farmer starts from – are they willing to add livestock, do they have experience with cover crops?

“You’re not automatically going to lose a lot of money,” Bishop said. “You lose money when you don’t plan well.”


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