April 14, 2010

Texas organic food production, marketing on the rise

By: Blair Fannin, 979-845-2259  
Contact(s): Dr. Dean McCorkle, 979-845-2770, d-mccorkle@tamu.edu

Dr. Marco Palma, 979-845-5284,mapalma@ag.tamu.edu  
COLLEGE STATION – Economists with the Texas AgriLife Extension Service have noted growing trends related to organic food production across the Lone Star State as sales in 2008 totaled $149 million, according to an initial survey from the U.S. Department of Agriculture-National Agricultural Statistics Service.

In Texas there are 342 farms that produce organic commodities on 314,000 acres, a majority on pasture or rangeland (242,000 acres), according to the statistics service.

Organic foods coming from Texas include milk, peanuts, vegetables, potatoes, melons and cotton, said Dr. Dean McCorkle, AgriLife Extension economist.

“Of the $149 million in cash sales, 90 percent of the sales or $134 million are generated by 10 percent of the farms,” he said. “Nearly half of the organic farms have annual cash sales of $5,000 or less.”

A growing health-conscious segment of the population is contributing to the increased demand for organic food products as retail sales in the U.S. have grown from $3.6 billion in 1997 to $21.1 billion in 2008, according to Extension economists.

“Organic food products are sold in more than 20,000 natural food stores and nearly three-quarters of traditional grocery stores nationwide,” said Dr. Marco Palma, AgriLife Extension economist.

Direct marketing outlets such as farmers markets provide an ideal setup for buying organic products because of the interaction with customers. Farmers markets have grown substantially in the last few years, currently there are more than 100 farmers markets in Texas alone and more than 5200 nationwide.

Livestock and poultry products accounted for the largest share of all organic products sold in Texas. Organic milk from cows totaled $80.9 million in sales in 2008. Cash sales of organic crops totaled $43.2 million in 2008 led by peanuts, vegetables, potatoes and melons, and cotton. Livestock and poultry cash sales totaled $14.9 million.

“The majority of those (livestock) sales came from the sales of dairy cows and calves,” McCorkle said.

Organic producers in Texas spent $121 million in organic production expenses, with the largest expense item being livestock feed at $51 million. Texas organic farms had average operating expenses of $330,157 per farm compared to $171,198 nationally.

The most common market outlet for organic producers was wholesale markets with 91.7 percent of sales. The largest wholesale outlets were conventional supermarket chain buyers, accounting for 36.1 percent of purchases, followed by wholesale grower cooperatives (28.3 percent) and distributors, wholesalers, brokers and re-packers (12.7 percent).

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