By Malinda Geisler, content specialist, AgMRC, Iowa State University, malindag@iastate.edu.

Profile updated July 2010.


Overview
As demand for organic products increased, more land in the United States was converted to organic production. As of 2008, the United States had 2.2 million acres of cropland and 1.8 million acres of pasture and rangeland certified organic. In 2008, the United States had 11,202 organically certified sheep and lambs, up from 4,471 in 2005. Colorado had the most organic lambs and sheep.

Organics have reached mainstream. Organic food sales totaled $26.6 billion in 2009, according to the Organic Trade Association's 2010 Manufacturer Survey. Organic food sales represented 3.7 percent of total U.S. food sales.

According to USDA’s Economic Research Service, health-conscious consumers are driving increased sales of organic and natural food products. Natural foods supermarkets and other specialized retailers are benefiting from this trend. Food products offered by natural foods supermarkets tend to be less processed and frequently are free of preservatives, hormones and artificial ingredients.

USDA standards for organic food were implemented in October 2002. Organic lamb is raised in a production system that promotes and enhances biodiversity and biological cycles. It is based on minimal use of off-farm inputs. Lambs intended for meat products must be raised organically from the last third of gestation and without the use of antibiotics and growth hormone stimulants. Organic foods, in general, are minimally processed with artificial ingredients or preservatives.

According to USDA, certified organic means “agricultural products have been grown and processed according to specific standards of various state and private certification organizations.” Certified agents review farm applications and qualified inspectors conduct annual on-site inspections. Farm records track all management practices and materials used in organic production.

Farm and processing operations that grown and process organic food must be certified by USDA-accredited certifying agents. A certified operation must have a written Organic Farm Plan available to the public on request. An exception to the certification rule is made for operations with gross agricultural incomes of $5,000 or less. Now that organic labeling is permitted, the organic meat market is expected to grow.

Marketing channels for organic products depend on the size of the market. For national distribution, products tend to move from the farm level to a cooperative processor and on to retailers. Another possibility is for production to move from a processor to a distributor before reaching retail outlets.

In general, most producers of organic lamb do not have enough volume to justify owning their own slaughter and processing facilities. Lambs are custom processed and typically marketed as a whole carcass. In addition to being sold directly to customers, organic lamb may be marketed through health food retail stores and natural foods restaurants.

In January 2005, the Agricultural Marketing Service announced rules to exempt certain organic producers and marketers from paying assessments under the research and promotion programs. Lamb is one of 17 national research and promotion programs. The change exempts producers and marketers operating under a National Organic Program approved organic system plan from paying assessments, provided they produce and market only commodities eligible for a "100 percent organic" label.
 
Processing
USDA-accredited certifying agents must also certify processors of organic foods. A certified operation must have a written Organic Farm Plan available to the public on request. Processors with organic sales totaling $5,000 or less are exempt from the certification rule. Non-certified processors, producers and handlers are allowed to use the term “organic” in compliance with labeling requirements.
 
Competition
According to the New Zealand Ministry of Agriculture and Forestry, organic lamb production is anticipated to remain a niche market. The United Kingdom (UK) is regarded as the world’s third largest organic food market. New Zealand intends to target the UK for organic lamb because of its reliance on imported organic food.

Australia has 1.5 percent of its total primary producers certified organic. Lamb-specific statistics were not reported; however, the overall domestic market for organics is growing 20 percent annually. According to the Biological Farmers of Australia, the industry goal is to have 10 percent of the Australian producers certified by 2020. 
 

Sources
Biological Farmers of Australia

Census of Agriculture, 2007, NASS, USDA.

Dimitri, Carolyn, and Catherine Greene, Recent Growth Patterns in the U.S. Organic Foods Market, Economic Research Service (ERS), USDA, 2002.

New Zealand Exports, New Zealand Ministry of Agriculture and Forestry.

Organic Production, ERS, USDA.

Organic Trade Association Overview

U.S. Organic Farming in 2000-2001