U.S. Forced to Import Corn as Shoppers Demand Organic Food
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9:00 AM EDT
April 15, 2015
April 15, 2015
A growing demand for organics, and the near-total reliance by
U.S. farmers on genetically modified corn and soybeans, is driving a surge in
imports from other nations where crops largely are free of bioengineering.
Imports such as corn from
Romania and soybeans from India are booming, according to an analysis of U.S.
trade data released Wednesday by the Organic Trade Association and Pennsylvania
State University.
That shows a potential
market for U.S. growers willing to avoid the use of artificial chemicals and genetically
modified seeds, said Laura Batcha, chief executive officer of the association,
which includes Whole Foods Market Inc., Whitewave Foods Co. and Earthbound Farm
LLC.
The report is “a
help-wanted sign” for U.S. farmers, Batcha said. “There are market distortions
that are pretty striking.”
Most of the corn and
soybean shipments become feed for chickens and cows so they can be certified
organic under U.S. Department of Agriculture guidelines. Organic poultry and
dairy operators shun feed made with seeds from Monsanto Co. and other domestic
suppliers in favor of foreign products even as the U.S. remains the world’s top grower of corn and soybeans.
As a result, imports to
the U.S. of Romanian corn rose to $11.6 million in 2014 from $545,000 the year
before. Soybean imports from India more than doubled to $73.8 million.
Rapid Growth
Sales of foods certified
by the U.S. as free of synthetic chemicals or genetic engineering reached $35.9 billion in
2014, an 11 percent increase over 2013 and about 5.1 percent of U.S. grocery
spending. The organic sector’s average annual growth of about 10 percent is
triple that of overall food sales, according to U.S. Department of Agriculture
and trade association data.
Rising consumer demand in
what’s been a niche market is creating shortages, pushing companies that supply
farms needing organic feed to seek out foreign sources.
About 90 percent of U.S.
corn and soy is bioengineered, thus automatically ineligible for the organic
label.
Just north of the
Minnesota-Iowa border, on a dirt road closed to heavy truck traffic by the
late-spring mud, Hy View Feeds has seen its sales quadruple since winning
organic certification a decade ago. Unlike nearby conventional feed stores that
buys mostly from suppliers within a half-hour drive, Hy View gets some from
Canada, more than 500 miles from its Mabel headquarters, to make up for
domestic shortages.
Limited Data
“It’s a market that not
everyone is going to get into because it’s done on a different scale,” said Kit
VandeMark, owner and founder of Hy View, which categorizes its feeds as
conventional, organic and non-GMO. “So we end up with both buyers and sellers
from a broader area.”
The USDA only began
collecting data on organic crops in 2011. Most of what’s tracked is fresh
produce and major grains - - processed foods and meats, for example, aren’t
reported in an organic category.
The four years of records
show rapidly growing trade relationships. In 2014, U.S. organic exports were
$553 million, almost quadruple the 2011 total. Imports last year were $1.28
billion, led by $332.5 million of organic coffee.
Imports of two crops,
corn and soybeans, that also are the leading U.S. exports underscore gaps in
the market, said Miles McEvoy, deputy administrator of the USDA’s National
Organic Program.
Romania, China
Soybeans are the
second-biggest U.S. organic import, with $184 million shipped last year. India
is the No. 1 source, followed by China. For corn, with overall sales of $35.7
million in 2014, Romania is the biggest seller to the U.S., followed by Turkey,
the Netherlands and Canada.
The totals are tiny
compared with the combined $92.7 billion value
of the two crops last year. That also means that the domestic market could
easily meet organic needs, McEvoy said. In reality, U.S. farming isn’t
structured to meet some of its highest-dollar consumers’ needs, he said.
“There just hasn’t been
enough development of the organic feed supply in the U.S.,” he said.
Organic-foods certifiers are in short supply in some regions, he said.
A requirement that all
organic farms be free of non-organic seeds and chemicals for three years means
farmers give up profit before gaining any price benefit. Recent high prices
that fed record farm profits also gave growers less reason to switch, he said.
Organic Prices
“If there were a market
incentive for more people to produce organic corn, there would be more of it,”
said Paul Bertels, vice president for production and utilization with the
National Corn Growers Association in St. Louis. Even though organic corn is selling
for about $12.50 a bushel, more than triple the cash price for regular corn,
lower yields and the three-year transition period makes GMO- and
synthetics-free grain not worth the risk, he said.
“It’s not worth the
headache or the cost” for most producers, he said.
In some cases, nations
where farming is less industrial are seizing the advantage. Genetically
modified seeds are largely absent from Romania and Ukraine, putting their
farmers closer to organic certification for sales in the U.S., McEvoy said.
Still, as commodity
prices tumble and growers seek higher profit margins, U.S. farmers may seek out
more organic acreage, said Lynn Clarkson, founder of Clarkson Grain Co. in
Cerro Gordo, Illinois.
“With the markets at
break-even prices for many farmers, we’re seeing more interest in organic
land,” he said. “I’m not predicting a tidal wave, but I’m seeing twice as much
interest in this as I have in the past.”
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