Organics Food Industry Facing a Crunch

Are prices for organic produce and milk about to go up, up, up? The demand for organic food went up 21% in 2006, and continued to go up sharply in 2007. Other factors, like the demand for biofuels, are pushing up conventional food prices worldwide. Competing interests vie for every bushel of grain grown worldwide; it can be used for human consumption, animal feed, or biofuels.

In the middle of this, organic food faces its own supply crunch.

A Baltimore Sun article reports that the organic food farms in the United States simply can't keep up with demand. There has been 20% growth in demand for raw organic materials every year, but this will be a difficult demand to meet.

The article quotes Caren Wilcox, head of the Organic Trade Association saying, "We know we are not meeting demand with domestic supply."

It takes nearly three years to shift a farm from conventional farming practices to organic, and to go through the rigorous and costly inspection program. Plus, as prices go up, it gets harder for livestock farmers to buy organic grains for their dairy cows and beef steers. Some are forced to source their grains from outside the U.S.

So - how much more will shoppers pay for organic produce, milk, and meat? Are you willing to sacrifice to buy organic - and by how much?