Rising food prices are one of several factors creating turbulence in the organic marketplace. But, as attendees at the recent virtual segment of the 2023 Guelph Organic Conference learned, inflation will likely remain top of mind in 2023.
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For the first time in more than a decade of monitoring the U.S. marketplace, analyst Tom Barnes said the total volume of organic produce sold decreased in 2022 from the previous year. He attributed this to the “substitution” of organic with non-organic options by “fence-sitters” who felt they could no longer justify the organic premium.
Why it matters: Costs of inputs needed by organic farmers have risen over the past year and it may be difficult for them to pass those increases on to consumers.
Barnes gave the latest retail numbers for organic produce during a Jan. 24 session entitled “Rest, Recovery and Regeneration: How has the pandemic affected organic and what does the future hold?” He reviewed COVID-19’s effects on the sector — including more questions about what makes foods healthy — and assessed 2022’s less-than-stellar returns, noting 2023 could yield similar results.
Inflation isn’t the only post-COVID factor affecting the organic marketplace. In an afternoon session, crop commodity specialists from the U.S. and Canada outlined the 2023 market outlook and agreed it will continue to be a “rollercoaster.”
Ryan Koory of U.S.-based organic market analysis firm Mercaris cited unusual growth in demand for organic commodities at the beginning of the pandemic. This was tied to the sudden return to home-prepared meals and increased awareness about health. It continued into 2021, although home preparation shifted to healthy grab-and-go options like packaged beverages, fresh produce and snacks.
Since then, there were two successive poor growing seasons for organic wheat and the U.S. eliminated an equivalency agreement with India. That drastically reduced soybean imports from what had been a major supplier.

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ithinksky/iStock/Getty Images
Demand for soybeans remained high for months because they were needed to offset wheat in livestock rations but highly pathogenic avian influenza soon cut demand considerably. Other livestock producers began to look elsewhere for protein options due to elevated soybean prices.
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As a result, 2021-22 was the first year in recent memory that the U.S. entered a crop year with significant carryover stocks of organic soybeans. The carryover looks to be even greater for 2022-23.
“We anticipate we’re going to lose as much as 80,000 acres of organic soy over the next growing season,” Koory said. That’s a 24 per cent decrease compared to last year’s U.S. acreage if the prediction proves true.
Ontario organic consultant Hugh Martin noted Canadian soybean growers have benefitted from prices that rose from around $30 per bushel in the pre-COVID period to as high as the mid-$40s or even $50 per bushel in recent months. Now he’s concerned about how Koory’s predictions might unfold north of the border.
North American organic corn may have a better future, in large part due to Russia’s invasion of Ukraine.
Koory reported there was an 80 per cent increase in the amount of organic corn crossing from Canada into the U.S. in 2021-22 compared to the previous year.
Black Sea nations are among the other main suppliers to the U.S. market – either directly, or more often through Turkey, where the corn is cracked and shipped.
The war has been an obvious impediment to the Black Sea supply chain. But Koory noted the organic marketplace has a further complication in the form of inspection and certification.
“The ability of organic certifiers to work within the environment that’s currently what we’re seeing in Ukraine has been incredibly difficult,” he said.
But as Barnes reported, inflation is the dominant factor affecting organic food sales at the grocery store.
For the first time in eight years, conventional produce increased in dollar-value sales in 2022 by a greater degree than organic produce, he said. The total volume of organic produce sold was down for the first time he can remember.
Price inflation in the U.S. was actually greater, on average, for conventional options in 2022 than it was for organics – at 9.2 per cent compared to 7.1 per cent. But with organic starting out at a significant premium, it’s still considerably more expensive.
And “the consumer is really concerned about their budget,” Barnes said.
Lynsey Walker of the Canadian Health Food Association (CHFA) concurred, citing an early 2022 survey of 2,000 Canadian grocery consumers. Though the survey was conducted just before much of the media hype about inflation, there was awareness among the average consumer and what she identified as the subset of “super wellness consumers” that organic food is significantly more expensive – even if, for some products, the price spread isn’t large.
Walker said inflationary effects in all aspects of their lives “have (consumers) evaluating price more than they ever have before.”
She added that the CHFA survey revealed the value placed by consumers on an “organic” label has faltered in recent years and is being replaced, to a degree, by labels with fair trade, humane certified and natural.
She suggested the sector emphasize that products meeting organic standards also typically meet standards in some other label programs.
Barnes said the challenges presented by inflation shouldn’t necessarily mean organic producers and marketers should lower the price gap between conventional and organic. It costs more to meet organic standards, he said, and farmers and processors shouldn’t force themselves into loss positions in reaction to what he believes is a short-term trend.
“We haven’t had a normal year in quite some time but this is an anomaly. It isn’t going to stay where it is forever.”