Iowa 9th in nation for organic farms, low on direct consumer outlets

Survey results released this month by the U.S. Department of Agriculture indicate that Iowa farmers have positioned themselves to take advantage of consumer demand for organic products, but that few of the state’s producers wind up selling directly to Iowans.

Of 14,540 organic farms identified by the USDA in a recently released survey, 518 are in Iowa, which makes the state 9th in the nation for number of organic farms. (Source: USDA National Agricultural Statistics Service)

The USDA’s National Agricultural Statistics Service counted a total of 14,540 U.S. farms and ranches that were either certified organic or followed organic practices despite the fact that their total sales (less than $5,000) exempted them from certification. In Iowa there are 518 such farms — 476 certified and 42 exempt. In all, nearly 95,000 acres of Iowa land is used by organic producers — 65,049 acres of harvested cropland, 17,077 acres of pasture or rangeland and 7,239 acres that are in the process of transitioning to organic use.

“This was USDA’s first wide-scale survey of organic producers, and it was undertaken in direct response to the growing interest in organics among consumers, farmers, businesses, policymakers and others. The information being released will be an important building block for future program and policy development,” said Kathleen Merrigan, USDA’s deputy secretary.

Questionnaires were distributed in May 2009 to certified, exempt and transitioning-to-organic producers, and the federal agency collected responses and follow-ups based on 2008 figures throughout the summer. The process is considered an addition to the 2007 Census of Agriculture, and was funded through the 2008 Farm Bill.

In 2008, total organic sales in the U.S. were $3.16 billion, with most of that figure, or $1.15 billion, contributed by California producers. Average national sales per organic farm were substantially higher than sales reported in the earlier census for all U.S. farms ($217,675 to $134,807), but the operation costs of organic farms was also increased ($171,978 to $140,075). Top expenses reported by organic farmers were employees and livestock feed.

During that same time in Iowa, organic sales totaled $71.5 million, with only slightly more sales included in that figure being attributed to crop production. Average sales per organic farms in Iowa was $138,118 — well below the 2007 census figure of $219,890 for all farms in Iowa. However, Iowa organic producers reported significantly fewer expenses than producers overall ($107,667 to $241,577) — with most of their expenses coming in the form of livestock feed or seed and plants.

Sales from the Hawkeye State contribute just over 2 percent to the national total, once again placing Iowa 9th overall.

Where Iowa organic producers seem to be most lagging behind other producers in the nation is in their marketing outlets. While 83 percent of national producers sell their products on wholesale markets such as processors or packers, 92 percent of Iowa producers use this option. Also, while 10 percent of national producers sell directly to retailers and another 7 percent sell directly to consumers, only 4 percent of Iowa producers report using either outlet. In fact the number of Iowa producers that sell directly to conventional supermarkets is so low that the USDA withheld the actual figure for fear of disclosing data from individual operations.

Although Iowa organic producers are not selling directly to Iowa consumers, they are typically selling to Iowa or Iowa-based wholesale outlets within 100 miles of their own operations. A full 64 percent of Iowa producers report that their first point of sale is done locally, with another 28 percent reporting sells done regionally and only 8 percent seeking national or international markets.

When organic producers nationally and in-state were asked to name their primary production challenge, however, they overwhelmingly indicated that regulations related to their business had the most stifling impact. Looking five years into the future, 47 percent of Iowa organic producers foresee maintaining their current operation and 28 percent believe they will increase their organic production.