Source: USDA/ERS submitted to
PRODUCT DIFFERENTIATION: MARKETING ORGANIC PRODUCTS
Sponsoring Institution
Economic Research Service/USDA
Project Status
NEW
Funding Source
Reporting Frequency
Annual
Accession No.
0406120
Grant No.
(N/A)
Project No.
pdf-110
Proposal No.
(N/A)
Multistate No.
(N/A)
Program Code
(N/A)
Project Start Date
Oct 1, 2001
Project End Date
Jun 30, 2007
Grant Year
(N/A)
Project Director
Dimitri, C.
Recipient Organization
USDA/ERS
1800 M STREET NW
WASHINGTON,DC 20036
Performing Department
ECONOMIC RESEARCH SERVICE
Non Technical Summary
Organic foods are currently sold in a wide variety of venues, including farmer markets, natural food supermarkets, conventional supermarkets, and club stores. Acreage of certified organic farmland is increasing to meet growing consumer demand. The top five categories are fresh produce, nondairy beverages, breads and grains, packaged foods, and dairy products.
Animal Health Component
(N/A)
Research Effort Categories
Basic
0%
Applied
100%
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
60361103010100%
Goals / Objectives
Describe and analyze the market for organic foods.
Project Methods
Organic production and consumption are part of the fastest growing segment of U.S. agriculture. Despite growth rate of 20 percent for the past decade, little is known about the industry, partly because there is little public data on organic production, marketing, and sales available. Thus, researchers are forced to rely heavily on industry data. Industry sources have reported retail sales for organic food, but those data are fragmentary and, at times, inconsistent. Tracking the myriad sources and attempting to reconcile their predictions provides our best picture of the organic industry.

Progress 10/01/05 to 09/30/06

Outputs
One milestone this year was the successful completion of the nationwide survey of organic intermediaries, which was out in the field for the first half of 2006, and had a 64 percent response rate. We received the data July 2006, and have just finished cleaning the dataset. We collected information on firm size, procurement practices, contract terms, labeling, exports and imports. The analysis of this data will provide the first comprehensive and systematic look at the structure of the handling sector. The ACNielsen Homescan data makes possible, for the first time, reasonable econometric analysis of the organic consumer. One output ()to be published first quarter 2007) is an e-outlook examining the organic milk retail market and consumer. A similar research project examining the demographic profile of the organic fresh produce consumer is underway.

Impacts
The report on the EU and US organic agriculture policies has been well received. The work resulted in an invitation to speak at the National Food Policy Conference, to speak on organic agriculture policy. We were also invited to submit an article for consideration for publication in the journal Food Policy.

Publications

  • Dimitri, C., Oberholtzer, L., A Brief Retrospective on the US Organic Sector: 1997 vs 2003, Conference Organized by ERS, Washington DC, October 6, 2005.
  • Dimitri, C., "US Organic Market: from consumers to the farm", Food Distribution Research Society, Washington DC, October 15, 2005. pp.
  • Dimitri, C., "A Brief Retrospective on the US Organic Sector: 1997 vs 2003", ERS Workshop on Organic Agriculture, Washington, DC, October 6, 2005. pp.
  • Dimitri, C., EU and US Organic Agriculture Policies, September/2006, pp.


Progress 10/01/04 to 09/30/05

Outputs
Our survey is currently out in the field, having passed through OMB clearance in Aug or Sept 2005. Using our mailing list of handlers, e published a map of showing the distribution of certified handlers in the Sept issue of Amber Wave. Other work on the project includes an examination of Eu and US organic ag policy (see e-outlook by Dimitri, Carolyn and Lydia Oberholtzer. Market-Led Growth vs. Government-Facilitated Growth: Development of the U.S. and EU Organic Agricultural Sectors. Outlook Report No. (WRS 05-05). US Department of Agriculture, Economic Research Service. August, 2005, and follow up Amber Waves piece in the February 2006 issue.) We've examined price premiums in the fresh produce industry (see Oberholtzer, Lydia, Carolyn Dimitri, and Catherine Greene. Price Premiums Hold on as U.S. Organic Produce Market Expands. Outlook Report No. (VGS30801), US Department of Agriculture, Economic Research Service. May 2005, and follow up Findings in Amber Waves, September 2005).

Impacts
(N/A)

Publications

  • Dimitri, C., Oberholtzer, L., A Brief Retrospective on the US Organic Sector: 1997 vs 2003, Conference Organized by ERS, Washington DC, October 6, 2005.
  • Dimitri, C., "US Organic Market: from consumers to the farm", Food Distribution Research Society, Washington DC, October 15, 2005. pp.
  • Dimitri, C., "A Brief Retrospective on the US Organic Sector: 1997 vs 2003", ERS Workshop on Organic Agriculture, Washington, DC, October 6, 2005. pp.


Progress 10/01/03 to 09/30/04

Outputs
We held a workshop to guide development of survey of organic handlers in January; hired a Research Coordinator (Lydia Oberholtzer). The survey was developed during the year, and cleared by Neil and Kitty, then sent to RMA. RMA is seeing the survey through OMB. Other related research - on US-EU organic, and fresh produce, was in process during 2004.

Impacts
(N/A)

Publications

  • Greene, C., Dimitri, C., 2003, Amber Waves, Economic Research Service, U.S. Department of Agriculture, February, 1 pp.


Progress 10/01/02 to 09/30/03

Outputs
Rapid industry growth in the organic sector (20 percent or more per year for the past decade) presents producers with many challenges in marketing their products. Unlike most conventionally grown agricultural products, very little official information about production, and marketing channels is available. As a result, many producers are required to make marketing and production decisions based on incomplete market information. In other words, farmers face price and marketing risks, which, in the organic sector, are linked. The linkages between price risks and marketing risks arise partially because market signals are not transmitted along the marketing chain from processors and retailers to producers and partially because the industry is rapidly growing. Thus, producers require information about price, market channels, and different contractual arrangements, and so an examination of both price risk and marketing of production risk is necessary.

Impacts
Organic farming is one of the fastest growing segments of U.S. agriculture. As consumer interest continues to gather momentum, many U.S. producers, manufacturers, distributors, and retailers are specializing in growing, processing, and marketing an ever-widening array of organic agricultural and food products. We have summarized growth patterns in the U.S. organic sector in recent years, by market category, and describes various research, regulatory, and other ongoing programs on organic agriculture in the U.S. Department of Agriculture.

Publications

  • Dimitri, C., Greene, C., 2002, Recent Growth Patterns in the U.S. Organic Foods Market, Agricultural Information Bulletin, AIB-777, U.S. Department of Agriculture, September, 54 pp.


Progress 10/01/01 to 09/30/02

Outputs
The progress on this project is as follows: we organized an OECD Workshop on Organic Agriculture, that was held in Washington DC in September 2002. A report Recent Growth Patterns in the US Organic Foods Market was released for the conference. Work in this area is continuing.

Impacts
Organic farming is one of the fastest growing segments of U.S. agriculture. As consumer interest continues to gather momentum, many U.S. producers, manufacturers, distributors, and retailers are specializing in growing, processing, and marketing an ever-widening array of organic agricultural and food products. We have summarized growth patterns in the U.S. organic sector in recent years, by market category, and describes various research, regulatory, and other ongoing programs on organic agriculture in the U.S. Department of Agriculture.

Publications

  • Dimitri, C., Greene, C., 2002, Recent Growth Patterns in the U.S. Organic Foods Market, Agricultural Information Bulletin, AIB-777, U.S. Department of Agriculture, September, 54 pp.