Emerging Issues in the U.S. Organic Industry

Economic Information Bulletin No. (EIB-55) 36 pp, June 2009

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by Catherine Greene, Carolyn Dimitri, Biing-Hwan Lin, William D McBride, Lydia Oberholtzer, and Travis A. Smith

Consumer demand for organic products has widened over the last decade. While new producers have emerged to help meet demand, market participants report that a supply squeeze is constraining growth for both individual firms and the organic sector overall. Partly in response to shortages in organic supply, Congress in 2008 included provisions in the Food, Conservation, and Energy Act (2008 Farm Act) that, for the first time, provide financial support to farmers to convert to organic production. This report examines recent economic research on the adoption of organic farming systems, organic production costs and returns, and market conditions to gain a better understanding of the organic supply squeeze and other emerging issues in this rapidly changing industry.

Keywords: Organic agriculture, farmers, handlers, consumers, organic production costs, organic supply, marketing organic products, organic label, organic price premiums, local food, organic food imports, Agricultural Resource Management Survey, ARMS

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