Growing organic acreage strengthens nationwide salesGrowing organic acreage strengthens nationwide sales

The organic grower landscape is expanding, and that is positioning the sector for an acceleration in activity.

Certified organic U.S. land for growing crops or livestock grew from 1.8 million acres in 2000 to 4.9 million acres in 2021, reports the U.S. Department of Agriculture’s Economic Research Service (ERS). An increase in grower activity will contribute to lower organic produce prices and greater revenues as inventories expand, analysts state.

Organic sales in 2021 accounted for about 3% of U.S. farm receipts even though organic acreage was less than 1% of the farmland, the ERS notes.

“More regions are growing organic products, a wider range of retailers are selling organic food, and more research and development funds are going toward development of organic agriculture,” the ERS reports. Acreage devoted to fruits and tree nuts, for instance, grew 76% from 2011 to 2021, the ERS notes.

While the most organic acreage has historically been in the Pacific region, and particularly California, expansion is occurring across the U.S. The share of organic sales in the Northeast, for instance, rose to about 16% in 2021 from almost 11% in 2012, with the Pacific region’s share declining to 32% from 43%, the ERS reports. The Corn Belt, Delta, Southeast and Southern Plains regions also registered.

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“The higher prices producers generally receive for organic products compared with those grown under conventional methods motivated expanded U.S. organic production,” the ERS notes.

Developing organic cropland requires producers to follow the USDA’s National Organic Program standards that prohibit growers from using most synthetic fertilizers and pesticides, which restricts the options for managing pests, the ERS states. “Even so, rising consumer demand, especially for organic fruits and vegetables, has led to a steady increase in organic cropland acreage since 2000,” the ERS notes.

USDA Organic farmland totaled nearly 5 million acres in 2021, compared with just less than 2 million acres in 2000. Credit: USDA

Sales are surging

Organic’s share of retail produce pound sales increased from 7.7% in 2021 to 8.1% in 2024, reports Circana, a Chicago-based market research firm. Organic pound sales grew 7.1% and dollar sales were up 5.1% for the 52 weeks ending November 3, 2024. Conventional and organic produce had an average per pound price of $1.76 and $2.82, respectively.

The intricate and typically higher cost of growing organic produce is contributing to the greater retail prices, says David Sherrod, president and chief executive officer of the Millen, Georgia-based Southeast Produce Council.

“While there is still a substantial gap between conventional and organic in average price per pound, the gap has narrowed over the past few years,” he notes. “This is important as for years shoppers who rarely or never purchase organic produce have pointed to the price differential.”

Related:What do consumers really think of USDA Organic?

While some consumers still state that they cannot afford organic produce, others on the sidelines note that there is not a strong reason to pay more for organic, Sherrod says. “A narrowing price gap and more promotions can start to open up the organic marketplace for those who have a strong interest in organic but perhaps not the financial means to purchase the products,” he states.

A generation gap

Evolving shopper attitudes towards organic produce is also set to boost activity, Sherrod says. Contributing to greater sales will be the “far greater appreciation for organic” by Gen X, Gen Z, and Millennial shoppers compared to boomers, he notes.

“It is truly a reflecting of the changing marketplace in which organic has a key demographic tailwind,” Sherrod says. “For many years, retail and foodservice tailored to the Boomer marketplace. While Boomers are still the biggest spending generation, their dominance is far less.”

The growing organic presence is making it increasingly important for merchandisers to educate shoppers about sector intricacies, analysts note. Some retailers are using in-store signage to explain the soil health benefits along with taste and nutrition advantages, Sherrod says.

“When people truly understand the organic advantage, they become more willing to open their wallets a little further,” he states.

A greater consumer interest in organic produce will also entice additional growers to enter the market, Sherrod notes, which makes it vital for merchandisers to promote products with online vehicles.

“Point-of-sale education is always the most powerful, but that package label is only so big,” Sherrod says. “Social media is the place to reach the core organic consumer. The same people who spend two seconds at the shelf to decide what fruit or vegetables to buy also spend two to three hours a day on social media.”