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Running head: ORGANIC FOODS IN THE UNITED STATES

Organic Foods in the United States

Keiser University

Dr. David Tucker

Managerial Economics

03/29/2020

Introduction
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ORGANIC FOODS IN THE UNITED STATES

Lately the world has seen a developing consciousness of wellbeing and ecological

issues, and sustainability has become the keyword at whatever point talking about

economic improvement, specifically comparable to developing nations. The global network

is turning out to be increasingly more aware of these issues, and Government arrangements

in industrialized as well as developing nations are progressively formulated to encourage

organic and different types of sustainable agriculture.

Organic food is food produced by techniques that agree to the principles of organic

farming. Principles vary around the world, however organic farming in general features

practices that strive to cycle resources, advance environmental equalization, and preserve

biodiversity. Associations controlling organic products may limit the utilization of specific

pesticides and fertilizers in cultivating (Bay, 2019).

The organic food and agriculture market in the United States is growing

exponentially as consumer preferences shift towards naturally produced goods. And what

follows is a report on organic foods in the United States. It begins with a briefly discussion

on organic foods in the United States, including important facts such as the grew it has had

through this year. Then, it will continue discussing the demand for organic foods, the

supply of organic foods, and it will finish with the resulting price of organic foods.

Organic Foods in the United States

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ORGANIC FOODS IN THE UNITED STATES

The United States market continues to be the largest market for organic products in

the world representing approximately 48% of the total, followed by Germany and France

with 12% and 8% respectively (Inter-American Institute for Cooperation on Agriculture,

n.d.). Organic food sales in the United States rose 5.9% in 2018 to reach $47.9 billion.

(Gelski, 2019).

To satisfy today´s consumer, it is important to be innovating organic products. For

instance, in 2018, industry responded with milk beverages with increased protein, more

full-fat dairy products, new flavors and grass-fed products (Gelski, 2019). Today, organic

products are currently accessible in about 20,000 common natural food stores and almost 3

out of 4 traditional supermarkets. (United States Department of Agriculture, n.d.)

Since 2008, consumer spending on organic goods in the US has gone up over 70%

and this pattern is relied upon to keep developing as the economy recoups and purchaser

inclinations continue moving towards naturally produced food. During 2015, the US

Secretary of Agriculture alongside a group of private-sector agricultural partners visited

Cuba on an exploratory strategic to evaluate the extraordinary potential that Cuba has as an

organic products partner. Since products such as bananas, coffee, and mangoes are brought

into the United States from countries located far away from the U.S., now, the United

States would benefit from lower costs by importing highly demanded agricultural products

from Cuba (Farm Folio, 2016).

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Moreover, the organic food and agriculture industry in the United States is

exceptionally atomized and incredibly subject to little makers. Inside the national market,

significant organizations, for example, General Mills (GIS) and WhiteWave (WWAV)

Foods represent only 1.7% and 5.4%, respectively, of the total supply. In any case,

aggregate demand for organic goods in the United States has developed reliably for over 10

years. In 2015, the organic foods market grew 11%, which stands in stark contrast to the

3% growth of the food market in general. This sensational development in the demand for

organic items has stressed US-based organic producers and expanded by and large natural

imports into the nation. Due to the shortage of arable land accessible and the significant

expenses of changing a farm from non-organic to organic, organizations and investors are

looking to foreign suppliers (Farm Folio, 2016).

Because of the high demand, the costs for organic goods keeps on being high than

that of their traditional partners, yet customers would not fret addressing cost premiums

built up in the marketplace. A survey completed in 2010 demonstrated that shoppers were

willing to pay up to 30% more for organic items (Vukasovič, 2016).

As production rises, premiums paid to organic cultivators and shippers might be

pressed, prompting lower costs to move ever-higher volumes of produce. Information show

organic premiums have been diminished for apples, blueberries, pears, strawberries and bell

peppers, the report included (Siegner, 2019).

Another impacting element for price declination could be how much natural food is

accessible around the nation. Growth is slowing to single digits as demand outpaces supply

(Siegner, 2019).
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To sum up, since numerous consumers are bound to see the foods that are naturally

become a nutritious and healthy choice contrasted with customarily developed goods, there

is a high possibility for the demand of organic food to keep developing. In the United States

markets, customers are progressively requesting for organic goods causing the industry to

experience a few difficulties. For instance, due to the demand has increased, suppliers that

grow organic food are not enough. Therefore, they have seen the need to seek new markets

such as Cuba that imports these products.

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References

Bay, J. (2019). Organic Food Market Research report and Growth by 2024. Retrieved from

https://www.marketwatch.com/press-release/organic-food-market-research-report-and-

growth-by-2024-2019-05-03

Farm Folio. (2016). Organic Supply and Demand in the United States. Retrieved from

https://farmfolio.net/articles/organic-supply-demand-united-states/

Gelski, J. (2019). U.S. annual organic food sales near $48 billion. Retrieved from

https://www.foodbusinessnews.net/articles/13805-us-organic-food-sales-near-48-

billion

Inter-American Institute for Cooperation on Agriculture. (n.d.).

The growth of the organic products market in the us will continue to present

opportunities for exporters from LAC. Retrieved from

https://www.iica.int/en/press/news/growth-organic-products-market-us-will-

continue-present-opportunities-exporters-lac

Siegner, C. (2019).US organic food market sales have cooled, report finds. Retrieved from
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https://www.fooddive.com/news/us-organic-food-market-sales-have-cooled-report-

finds/558602/

United States Department of Agriculture. (n.d.). Organic Market Overview. Retrieved from

https://www.ers.usda.gov/topics/natural-resources-environment/organic-

agriculture/organic-market-overview/

Vukasovič, T. (2016). Consumers' perceptions and behaviors regarding organic fruits and

vegetables: Marketing trends for organic food in the twenty-first century. Journal of

International Food & Agribusiness Marketing, 28, 59-73.