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Organic produce has become very popular in the last 10 years. U.S. organic food sales have grown between 17 and 21 percent each year since 1997. This is compared to conventionally grown food sales that have grown only 2 to 4 percent a year for the same time period. Organic food sales now represent approximately 2 percent of U.S. food sales (Greene and Dimitri).
Growing vegetables organically requires more physical input and critical thinking when approaching pest and fertility management. Organic production is a ‘system’ approach that improves the condition of the soil and reduces soil erosion. Crop nutrients and soil fertility are managed through rotations, use of cover crops, and application of plant and animal materials. Pests are managed through the increase in biodiversity of the system, encouraging natural enemies, and the use of products that are approved by the National Organic Program (USDA). Weeds are managed through the use of mulches, tillage, and hand labor. Few chemical weed suppression products are effective.
Soil Health and Fertility
Soil productivity and health are the cornerstones to healthy plants that can withstand attacks from pests and diseases. Soil organic matter, which can be enhanced through the use of cover crops, composts and natural mulches, can serve as a reservoir of plant nutrients, enhance soil biological diversity and improve soil tilth, structure, and water holding capacity. The proper use of crop rotation in an organic system allows cover crops to be utilized in the most effective manner by breaking the disease cycle, increasing soil organic matter, increasing biodiversity, encouraging beneficial insect populations, and providing a nitrogen source to the crops that will be grown.
“Rotation, or lack of it, can have a profound effect on the marketable yield of vegetables because location of crops around the farm over time influences insect, weed, and disease pressure, as well as soil nutrient status and physical condition. To achieve an effective crop rotation, it is critical to have a systematic plan for the arrangement of cash crops and cover crops that looks ahead three or more years.” (V. Grubinger)
The use of crop rotation is critical in organic production to break up the pest cycle between families of plants and other susceptible hosts. It needs to incorporate legumes to provide nitrogen for the subsequent crop and also incorporate grasses into a largely broadleaf production system.
Soil testing is necessary to determine crop needs. Soil tests will indicate recommended rates of phosphorus and potassium (P 2O5 and K 2O) required for crop production (University of University of Maryland Extension Publication EB-236). Organic producers can provide nutrients to their crops through the use of composted manures, cover crops, and approved blended materials. Blended fertilizers approved by the NOP (National Organic Program) that provide this exact ratio are few.
Organic growers are required to improve the biological productivity of their soil, and one way they achieve this is through the use of cover crops. These cover crops, while providing organic matter and erosion control, can also provide nutrients, many in the source of nitrogen. It is difficult to determine the actual quantity of nitrogen each cover crop can provide to the subsequent cash crop, as growth rate and biomass will be variable at maturity.
Vegetables are often grown on black plastic with trickle tape to supply the plant’s water needs. Organic growers often use other mulches that are readily available (straw, newspaper, or planting directly into a killed cover crop). In all organic production systems, weeds must be controlled because they are the number one cause of yield losses, as well as the most difficult pest to manage. Supplemental weed management is obtained through the use of cover crops, tillage, flaming, and manual removal. The manual control of weeds in an organic system is one of the factors that increase the cost of raising vegetables organically. Seasonal labor sources must be secured in order to maintain the productivity of the crop.
Insects are managed through enhancement of biodiversity (increasing natural enemy populations, providing habitat, elimination of non-selective chemical controls), crop rotation, adjusting planting dates, and the use of approved chemical products.
Marketing Organic Products
Marketing is an important consideration for any farm enterprise. A marketing plan should begin before a crop is ever planted. It should encompass many issues including the target market, market research, product development, pricing, placement in the market, and promotion of the product. A detailed marketing plan will be essential to the overall profitability of a farm enterprise. Organic products are no exception. Markets for organic products are still new and immature. Businesses need a well-defined marketing plan that will achieve goals and profitability.
The majority of locally grown organic products are sold directly to the consumer through farmers markets, roadside stands, and CSAs. Direct marketing refers to sales of a good or service from the producer directly to the consumer. This eliminates wholesale marketing and the middleman. Selling directly is an effective way for farmers to receive more of the consumer dollar because costs such as packaging, transporting, or wholesaling are reduced. While this is an effective way to market, farmers must be prepared to make a time commitment educating and marketing the product to consumers.
There is an increasing organic wholesale market to health stores and supermarkets due to consumer demand. Selling to these larger markets often takes higher quantity of production. Organic markets are still somewhat immature, but are growing. According to the Organic Trade Association, organic products are available in 73 percent of conventional United States grocery stores and consumers continue to demand more.
While organic production is intense and consumer demand is increasing, marketing organic products can be challenging. It requires the right market position, pricing for increased production costs, and finding the target consumer.
Market position refers to the identity or image that is created for a product and the products’ relation to competitors. Organic produce has been able to position itself in the market as sustainable and environmentally friendly. These features should be incorporated by organic farms into a marketing plan and promotional materials. Organic produce has a perception of superior quality therefore the market position can be set higher than other products. It is necessary for organic producers to educate the consumer on the principles and production practices of growing organic.
There are consumer segments that demand, search for, and purchase organic products. This is generally a health conscious consumer who wants to buy fresh and local products. This may be a consumer with more disposable income who is willing to pay more for the organic products. Even some large retail stores are selling organic products. Research local consumer tastes, preferences, and demographics. This will begin to define the target market for your product. Census and economic data can provide demographic, income, and other information that will be helpful in marketing organic products.
Pricing Organic Products
For many traditional agricultural products, profit margins can be minimal. But, organic offers a premium that consumers may be willing to pay for the organic label. (The premium includes the cost of products grown organically above the cost of conventionally grown products, as well as increasing demand for organic products.) Organic production is more labor intensive and prices should reflect that cost. Pricing directly affects profit margins and will depend upon the consumer target market, disposable income, and consumer tastes and preferences.
Enterprise budgets have been collected and organized for various organic crops. An enterprise budget is an estimate of income, costs, and profits associated with an agricultural enterprise. These budgets can be helpful for farm planning such as adding a new crop, production technique, efficiency of a farm business, and/or to support credit applications. While only an estimate, the budgets provide detailed production information that may occur in a general year. Variations to these budgets are dependent on individual operations, management, and uncertainty. Organic budgets are even more variable because the organic market is still very immature.
The Organic Price Report (http://www.rodaleinstitute.org/Organic-Price-Report) allows for the comparison of organically grown vegetables in several wholesale markets in the United States. This, along with the value of your inputs (physical and purchased) and knowing what the market can bear, will help determine a price for your product.
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