In this week’s edition of Growing Possibilities:

Demand for organic food is on the rise, but as with many products in 2022, supply chain issues are leading to shortages, and shortages mean higher prices. Is increased organic demand enough to convince farmers that organic farming is worth it, or will it remain a niche market?

As of 2022, the price of organic soybeans in the US has skyrocketed

to an all-time high at $41 a bushel(1). A lot of this price shock in the US is because, despite being a major producer of conventional soybeans, the U.S. imports most of its organic supply(2). Organic soybeans are largely used as feed for organic livestock and the manufacture of organic meat and dairy alternatives. Notably, they are a major source of protein for organic chicken operations. According to Technavio(3), the global organic chicken market is set to increase in value to $8.9 billion by 2026. Does this create an opportunity for farmers in North America to go organic?

It takes 3-5 years for a farmer to convert a field to organic,

according to both the University of Tennessee(4) and the Ontario Ministry of Agriculture and Rural Affairs(5). As far as we know, no one is currently being compensated for that time. Data from a decade ago(6) suggests organic farms are not more profitable than conventional, but organic land rents at a higher premium. This higher rental rate is seen as compensation for the time put into converting the land.

Are organic farmers taking advantage of Ag-Biotech products?

Is the higher price for organic products at the supermarket translating into enough of a premium to convince farmers to convert? At XiteBio, we have not yet seen that trend in the organic market. Although all of our inoculants and biologicals are certified organic in Canada, most of our customers are conventional farmers who are using our inoculants and biologicals to increase yields in tandem with conventional inputs. This tracks with data from Statistics Canada(7) that says about 3% of farms in Canada produce organic products. That number has not changed much, either: from 2,230 organic farms(8) in Canada in 2001, to 3,555 farms in 2006, and 5,658 farms in 2021(9). This is out of a total 189,874 farms in Canada.

Organic farms remain only 3% of farms in Canada

As an inoculant and ag-biological manufacturer, we consider ourselves to be a part of sustainable and regenerative farming practices. Nitrogen (N) fertilizers are mostly excluded from organic farming; as Alberta Organic(10) explains, N fertilizers are not accepted in organic soil due to organic farms practicing longer term approaches to soil nutrition. There are few organic alternatives to synthetic N fertilizers, because they are mostly made by converting natural gasses into N fertilizer. So, we would expect N-fixing biotech to be big in the organic community; products like N-fixing biologicals and inoculants pull available N from the air and the soil. However, with current inoculant and biotechnology, this isn’t a clear alternative to synthetic N fertilizers, beyond legumes. Other rotational crops such as corn still require additional N when being grown in a field that has previously hosted legumes.

Sustainable farm practices such as intercropping could provide possible organic alternatives as a means of reducing input, efficient nutrient cycling, reducing pest density, and effective crop management, according to S.A.R.E(11). But this would surely come at a cost, and will farmers change their current practices and methods? This could be the future of both conventional and organic farming, but today, growers still seem to receive the highest ROI with the least risk by remaining conventional.

So, the question remains,
is organic farming worth it? Will the future be organic, or will the future of farming adopt a mix of biotech and conventional farming practices?

1. https://mercaris.com/commodity_price/soybeans
2. https://www.reuters.com/world/us/its-madhouse-organic-us-soy-prices-hit-record-fuel-food-inflation-2021-10-11/
3. https://www.prnewswire.com/news-releases/organic-chicken-market-north-america-to-occupy-40-market-share–fresh–frozen-segment-to-be-significant-for-revenue-generation–technavio-301577773.html
4. https://extension.tennessee.edu/publications/Documents/W235-B.pdf
5. http://omafra.gov.on.ca/english/crops/facts/10-001.htm
6. https://www.producer.com/news/organic-vs-conventional-wheres-the-profit/
7. https://www150.statcan.gc.ca/n1/daily-quotidien/220511/dq220511a-eng.htm
8. https://www150.statcan.gc.ca/n1/pub/96-325-x/2007000/article/10529-eng.htm
9. https://www.statista.com/statistics/454651/number-of-organic-farms-in-canada/#:~:text=In%202020%2C%20there%20were%205%2C972,of%20organic%20producers%20in%20Canada.
10. https://organicalberta.org/article/nitrogen-rich-soil/#:~:text=Ryan%20says%20most%20of%20the,term%20approach%20to%20soil%20nutrition.
11. https://www.sare.org/publications/crop-rotation-on-organic-farms/guidelines-for-intercropping/