Organic supply not meeting demand

February 5, 2008

According to the Organic Trade Association’s (OTA) 2007 Manufacturer Survey, organic foods are one of the fastest growing segments in the industry, with sales in 2006 increasing 21 percent to reach $16.7bn. But results from the same survey also indicate that supply is not keeping up with demand.

Some 55 percent of respondents (manufacturers) said that a lack of reliable supply restricted their company from generating more sales of organic products. 

Meat and dairy are amongst the categories hit by supply shortages, and according to OTA’s report these continued to be the two fastest-growing segments.

Demand for meat, which is currently the smallest category in the organic food market, shot up by 55 percent, placing total sales at $300m. Dairy, the largest organic segment, saw a 25 percent increase in sales, to reach a value of $2.6bn.

“We know we are not meeting demand with domestic supply,” said Caren Wilcox, head of the Organic Trade Association.

Organic grocery prices are in many cases already well above those in the regular grocery aisles. Many organic consumers have been able to justify spending more on one item by buying less of another.

What will happen if demand continues and supplies become scarcer still? Higher prices, more imports, possibly the easing of restrictions and regulations.

It may be time for consumers to think for themselves by thinking ahead. Home and community gardens could very well be the way of the future.

Sources: http://www.ota.com/index.html, http://money.cnn.com/news/newsfeeds/articles/apwire/ec313a1f8b34b54e5a1a991c72029f33.htm

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