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Demand for organic food soars, but competition growing

(Saturday, Aug. 14, 2004 -- CropChoice news) -- Bilen Mesfin, AP, 08/11/04:
SAN FRANCISCO — From alfalfa to oats to wine grapes, prices for organic produce and products have held steady for about 52 percent of the organic farmers queried in a new survey, and more than one-quarter said they are seeing prices inching up.

About 27 percent also predicted falling prices, as more farmers, including big businesses, try to grab a share of the sector’s success, according to the survey by the Santa Cruz, Calif.-based Organic Farming Research Foundation.

More than 1,000 growers — about 16 percent of the country’s certified organic farmers — sounded off on a variety of subjects related to the fast-growing, $9 billion marketplace, including genetically modified organisms.

The survey gives “an incredibly detailed snapshot of a tough, hard but generally profitable way to farm,” said Bob Scowcroft, the foundation’s executive director.

Organic was not the buzz word it is now when Dennis Dierks and his wife, Sandy, started working their 3Ś acres 30 years ago. Dierks, owner of Paradise Valley Produce in Bolinas, Calif., has seen organic awareness spread immensely.

As organic sales surge an estimated 20 percent annually, the Dierkses prefer to stay small, selling the bulk of their cool-weather vegetables, such as kale, chard and lettuce, locally. Some of it is sold through a subscription service and to restaurants, but most of the produce sells at neighborhood farmers markets, where they interact face-to-face with consumers. More than three-fourths of their sales comes from repeat customers, “people trying your stuff and becoming regular because they like it so much,” said Sandy Dierks, 57.

Like the Dierkses, many of those surveyed say they rely on a direct connection with consumers to stay in business, with 79 percent of them unloading products within 100 miles of their farms and a majority of them using word of mouth as their main marketing tool. Unlike conventional agriculture, the organic marketplace boasts that flexibility because it attracts customers who are willing to pay more for products they trust from a grower they know.

“It’s a different kind of consumer,” said Erica Walz, who analyzes data for the Organic Farming Research Foundation.

Other growers are dealing with increased competition by becoming bigger and more innovative. About 58 percent said they want to expand the amount and type of organic products they offer, and 50 percent said they plan to increase acreage.

Vanessa Bogenholm, who owns VB Farms in Watsonville, Calif., went from 29 to 50 acres about a year ago. Like 51 percent of those surveyed, Bogenholm once was a conventional farmer who went organic about eight years ago because she wanted to produce pesticide-free products. She grows mostly strawberries and raspberries, as well as an occasional vegetable, and grosses between $1 million and $1.5 million per year through diversified products. She supplies yogurt companies such as Dannon, picks berries specifically for high-end restaurants and hotels, and grows specialty produce, such as a cauliflower the size of a fist that chefs can plop on a fancy plate.

“It’s a lot more labor,” said Bogenholm, 38. “It’s a lot more packaging. But it’s something that brings in money. I can’t compete with a guy who can produce 500 acres of cauliflower when I can do eight. So somehow, my cauliflower has got to be special or different.”

Bogenholm said she is going head-to-head not with small farmers at the local farmers market but conventional growers who devote a small portion of their lands to organic.

“That’s the guy that causes me problems,” she said.

Growers also pointed to the threat of pollution from genetically modified organisms as a looming concern. Forty-six percent said they think that the risk of contamination from GMO products is moderate to high, with 48 percent singling out contaminated seed stock as the greatest threat. Forty-two percent worried about pollen drift.