by Marsha Laux, content specialist, AgMRC, Iowa State University, mlaux@iastate.edu

 
Revised May 2007 by Diane Huntrods, AgMRC, Iowa State University.


Overview
Organic agriculture continues to expand rapidly and is now practiced in more than 120 countries in the world. Since 1997, organic foods have shown fairly consistent annual growth rates of 15 percent to 21 percent. The Organic Monitor placed the global market for organic food and drink at $23 billion in 2002, and projected markets were expected to reach $40 billion in 2006.

Organic Food
According to the Organic Trade Association, the U.S. organic industry accounted for $14.6 billion in consumer sales in 2005. Organic foods, still the largest and most clearly defined part of the organic industry, accounted for $13.8 billion of that amount. A Natural Food Merchandiser (NFM) market overview article indicated that sales of organic foods had increased by 15.7 percent overall.

According to the 2004 Whole Foods Market Organic Foods Trend Tracker survey, more than one-quarter of Americans are eating more organic products than just one year ago. The same report suggests that over one-half of all Americans have tried organic foods and beverages and nearly one in ten use organic products on a regular basis, or several times a week.

The organic foods industry has seen growth in the mainstream market penetration rate since 1997, nearly tripling in sales. However, producers are unable to meet consumer demand, and this undersupply is stunting market growth in the industry. To fill the shortage, over $1.5 billion of organic products were imported into the United States, compared to $150 million in American exports. (Organic Monitor 2005)

Organic Meat
The fastest growing segment of organic food products is in the organic fresh meat and seafood sales, which grew by more than 67.4 percent in 2005 to $114 million (NFM 2006). Demand for natural and organic meat crossed the 20 percent milestone with 21.2 percent of the shoppers surveyed saying they purchased these products, up from 17.4 percent in 2006.

The association also indicates that the meat/fish/poultry category of the organic food industry was at $256 million for 2005, compared to $75 million of the total for 2003. The latter amount had significant growth of 77.8 percent in 2003 and had increased percentage-wise by 55.4 percent in 2005.

Some in the industry believe the perception that organic meats are healthier and safer may encourage increased demand. Meat protein in the United States is also relatively cheap, and with increased demand for diets high in protein and low in carbohydrates, organic meat consumption is expected to grow.   

Price continues to restrain sales of natural and organic meat. More than six in ten shoppers (63 percent) said they would buy more of these products if the prices were more in line with those of conventionally produced meat. (Food Marketing Institute 2007)

The demand for organic meats is outpacing supply, causing global supply to tighten. A number of regions are reporting undersupply because organic meat production is not keeping pace. As demand strengthens, organic meat supply shortages are expected to continue. Australia, Canada and Latin America are already established sources of organic meat products. (Organic Monitor 2006)

Organic Poultry
The largest volume of organic meat sales is for poultry. Chicken is the most widely available organic meat; it is found in a large number of natural food retailers and conventional groceries. Chicken is also the most popular natural and organic meat, purchased by more than seven in ten shoppers (73.2 percent). Organic chicken dominates because of the relatively short production cycle, low price premium and integrated production.

Organic poultry producers are now expanding rapidly. Nearly 1 percent of the layer hens produced in 2005 were certified organic.
 

Per capita consumption (retail weight) of all poultry products has grown from 33.8 pounds in 1970 to 111.9 pounds in 2003. According to the USDA Economic Research Service (ERS), poultry is gaining market share compared to total red meat consumption, which has declined from 131.9 pounds per capita in 1970 to 111.9 pounds per capita in 2003.

Outlook
With the increasing consumption and demand by American consumers for chicken and turkey products, the poultry market continues to look favorable, although growth rates of the past decades are expected to slow. According to the USDA ERS, larger gains in poultry output result in poultry becoming a larger proportion of the total U.S. meat consumption. U.S. poultry production continues to rise but at a lower rate than during the 1990s due to the maturity of domestic demand and slower export growth.  

Tracking of the organic meat market is not well developed; however, increased poultry consumption coupled with the growth and awareness of organic food and drink markets signifies opportunities in this agricultural sector.

Sources
Food Marketing Institute 2007.

Natural Food Merchandiser 2006.

Organic Monitor, November 2006, July 2006, May 2006, December 2005.

Organic Trade Association.

Poultry, Economic Research Service, USDA.
 
Whole Foods Market Organic Foods Trend Tracker survey 2004.

Marketing

• Accredited Certifying Agents, National Organic Program, USDA - Current listing of certification agencies.
• Biofuels send organic meat prices soaring, Natural Foods Merchandiser, February 2008. 
• Factors Affecting International Demand and Trade in Organic Food Products, Economic Research Service (ERS), USDA - This publication examines the factors affecting organic markets.
• Implication of U.S. and Global Organic Dairy, Livestock and Poultry Production for International Trade, Foreign Agricultural Service, USDA, 2000 - Offers historical acreage and livestock production figures. 
• International Federation of Organic Agriculture Movement (IFOAM) - This Web site provides access to documents regarding the growing market for organic products. The World of Organic Agriculture 2004: Statistics and Future Prospects is an IFOAM publication that contains statistical information on organic agriculture worldwide as well as text on the global situation.
• National Chicken Council (NCC) - The NCC represents companies that produce, process and market almost 95% of America's chicken. Although NCC's primary responsibility involves public affairs/government relations, the Council also actively promotes the marketing and consumption of safe, wholesome and nutritious chicken products both domestically and internationally.
• National Organic Program, Agricultural Marketing Service, USDA - This program provides information regarding the national standards and organic certification. Only certified foods can be labeled as organic.
• Organic Agricultural Products: Marketing and Trade Resources, National Agricultural Library - This collection of resources deals specifically with marketing and trade resources.
• Organic Agriculture at FAO, Food and Agriculture Organization (FAO), United Nations - Provides information on organic agriculture, including international markets, guidelines for exporting and certification.
• Organic Farming and Marketing, ERS, USDA - The briefing room on organic agriculture describes characteristics of the U.S. organic farm sector, including estimates of organic farmland acreage and livestock, by commodity and by state. The briefing room also depicts industry growth and sales and highlights ERS publications on organic agriculture and current organic-related activities of ERS researchers.
• Organic Livestock Workbook, National Center for Appropriate Technology (NCAT), revised February 2004 - This publication is designed for use by organic and transitional producers with livestock or mixed crop livestock operations.
• Organic Poultry and Eggs Capture High Price Premiums and Growing Share of Specialty Markets, ERS, USDA, 2006  - This  report gives an update on market trends for organic poultry and provides price comparisons for conventional and organic poultry.
• Organic Poultry Gaining in Specialty Market Competition, Amber Waves, USDA, 2007 - Explains why poultry is among the fastest growing organic food products in the United States, despite high feed costs and other challenges in production and marketing. 
• Market Trends, Organic Trade Association. 
• Poultry Market Prices, USDA - Up-to-the-minute access to poultry market commodities pricing, including broilers/fryers, eggs, and turkeys.
• U.S. Organic Farming Emerges in the 1990s: Adoption of Certified Systems, ERS, USDA - This publication refers to research analyzing data from state and private certification groups to calculate the extent of certified organic farmland acreage and livestock in the United States.
• U.S. Poultry & Egg Association - This trade organization promotes the poultry and egg industry.
• Industry groups, such as the Food Marketing Institute and the Hartman Group, have conducted nationwide surveys of American consumers about their preferences and buying habits for organic food.

Processing/Manufacturing

• American Association of Meat Processors - This national trade association has been in existence since 1939.
• American Meat Institute Foundation - A nonprofit research, education and information foundation established by the American Meat Institute to study ways the meat and poultry industries can produce better, safer products and operate more efficiently.
• Meat and Poultry Labeling Terms, Food Safety and Inspection Service, USDA.
• The Organic Trade Association - Established in 1985, this association represents growers, shippers, processors, certifiers, farmer associations, brokers, manufacturers, consultants, distributors and retailers in Canada, the United States and Mexico. It offers many publications on the organic industry and workshops, such as retailing practices for organics.
• Rules and Regulations, Food Safety and Inspection Service, USDA.

• Organic Poultry - Meat Birds, Maritime Certified Organic Growers, Nova Scotia, Canada, 2002.
• Organic Production, Economic Research Service, USDA.
• Raising Organic Pasture Poultry, Alberta Agriculture, Food and Rural Development, Canada, 2001.
• Specialty Poultry Handbook, Iowa State University Extension Value-Added Agriculture - This Web site gives resources about such specialty poultry production topics as breeds, buildings and equipment, health, management techniques, marketing, nutrition, organically produced poultry, processing, regulations and labeling and waste management.
• The University of Minnesota has an extensive list of links and resources for organic poultry production, including fact sheets.

Businesses/Case Studies

• Consumer Preferences for Organic/Free Range Chicken, Kansas State University, 2002.
• North Star Neighbors: Neighbors and Friends Working Together- A Nebraska meat-marketing cooperative has a successful, informal equipment-sharing strategy.
• Petaluma Poultry, Petaluma, California - This experienced company is probably best known for their organic poultry line of products. They carry three brands: a range chicken product, frying chicken and an organic chicken line.
• Raising Poultry Organically, New American Farmer, Sustainable Agriculture Research and Education (SARE), 2005.
  

Profile created January 2003 and revised May 2007.
Links checked February 2008.