Increasing consumer interest in organic foods has opened the door to new market opportunities for U.S. producers. Once a niche product sold in a limited number of retail outlets, organic foods and beverages are currently sold in a wide variety of venues, including farmers markets, natural foods supermarkets, conventional supermarkets, and club stores. In fact, according to the latest issue of USDA’s Agricultural Outlook, 2000 marked the first year that the largest percentage of organic foods was sold in conventional supermarkets — 49 percent.

The USDA report goes on to say that since the early 1990s, certified organic acreage in the U.S. has increased as producers strive to meet growing demand for organic agricultural and food products. Between 1992 and 1997 organic acreage doubled to reach 1.3 million acres. Preliminary estimates for 2001 indicate a similarly high rate of growth between 1997 and 2001.

With this growth in acreage has come a growth in new production introductions also. More than 800 new organic products were introduced in the first half of 2000.

But it takes consumer demand to grow the organic industry. And the brightest start in the demand side has been organic dairy products. Between 1994 and 1999, the sales of organic dairy products have increased by more than 500 percent.

Organic dairy products, as defined by the USDA, are made from the milk of animals raised under organic management. The cows are raised in a herd separate from conventional dairy cows, receive preventive medical care such as vaccines and dietary supplements of vitamins and minerals, but are not given growth hormones or antibiotics. Based on stage of production, the climate, and the environment, all organically raised dairy cows must have access to pasture, the outdoors, shade, shelter, exercise areas, fresh air, and direct sunlight.

Organic dairy products can only be made from the milk of animals raised organically for at least 1 year prior to milking, or from cows converted from conventional to organic production. To convert cows to organic production, the cows must be fed a diet consisting of at least 80 percent organic feed for 9 months, and then 100-percent organic feed for 3 additional months, or must be grazed on land that is managed under a certified organic plan. In addition to feeding and management practices that must be adhered to there are also standards used in processing plants to certify that the organic product is not contaminated by other non-organic products.

The dramatic growth of the organic food and beverage industry has spurred Federal policy to facilitate organic marketing. New USDA standards for organic food are set to be fully implemented by October 21, 2002. And those new guidelines are expected to facilitate further growth in the organic foods industry.

USDA Agricultural Outlook