Organic targets may require new markets

By Caleb Hampton 

When Jeff and Annie Main of Good Humus Farm began farming in Yolo County nearly half a century ago, one of the first challenges they encountered was finding a market for their organic produce.

“In order to sell something, you have to have somebody to sell it to,” Jeff Main said last week during a farm tour organized by the California Climate & Agriculture Network, or CalCAN.

Back then, with organic farming in its early days, there were few established channels for selling organic produce. So, in 1976, the Mains created their own, helping found the Davis Farmers Market and the Davis Food Co-op.

Today, Good Humus Farm grows 200 varieties of organic fruits, vegetables, herbs and flowers on 30 acres, selling most of it to food co-ops, farmers markets and Community-Supported Agriculture, or CSA, programs, that prioritize local, organic produce.

The evolution of consumer demand for organic products has enabled organic farming to develop into a major industry. But according to researchers and policy experts, new markets may need to be created for California to meet its goal of converting more farmland to organic agriculture.

In April, Gov. Gavin Newsom’s administration released a set of “nature-based solutions” for meeting the state’s climate targets. Among the solutions is a goal of converting 10% of California’s annual and perennial cropland to organic agriculture by 2030. By 2045, the state aims to have 20% of its cropland in organic production.

Those targets could be a heavy lift in light of recent trends in California’s organic acreage. In 2022, the most recent year with data reported, about 4% of the state’s cropland was organic, and after years of expansion, the share of acreage that was organic had declined for two straight years.

“It could be that we have reached a plateau in terms of overall market forces,” said Ryan Galt, director of the University of California, Davis, Agricultural Sustainability Institute and professor of human ecology.

With organic acreage sliding, some stakeholders are pushing for the state government—as a major food buyer for schools, prisons and other publicly funded institutions—to leverage its purchasing power to create the market needed for California to achieve its goals. There are also market opportunities provided by federally funded programs.

Cathryn Couch, chief executive officer of the Ceres Community Project, which contracts with publicly funded health care organizations to provide meals, said last week during a panel at the CalCAN Climate & Agriculture Summit that the state should align its food spending with its climate objectives.

“If we have a climate goal,” Couch said, “don’t we want to bring these two things together?”

California does not track demand for organic products from public programs. Rough estimates suggest the purchasing power of the state and federal government, if leveraged, could be significant.

In 2022, organic producers in California grossed about $4.5 billion in sales, according to the California Department of Food and Agriculture.

That was the same year the federal government began reimbursing food-as-medicine programs in California and other states. Just 18 months into the program, Couch said the Ceres Community Project, which exclusively buys organic produce, and other partners were spending $200 million on food-as-medicine.

“We’re starting to scale really fast,” Couch said, adding that studies showing the food-as-medicine model results in significant cost savings for health care providers has generated further momentum. In the coming years, she said public spending on food in the health care sector could scale up to nearly $1 billion per year. “What if half of that is going to organic?” Couch said.

Another market opportunity is California’s $600 million yearly budget for the state’s Universal School Meals Program, which provides two meals per child per day. Additional spending on food for schools is generated by grant-funded programs such as CDFA’s Farm to School program.

Nicholas Anicich, who manages the Farm to School program, said he is pushing for California to prioritize buying certified organic produce for schools. “We’re not mandating organic in the program, but we do highly encourage it,” Anicich said.

A new federally funded program does focus on buying organic products for schools. Last week, the U.S. Department of Agriculture launched its Organic Dairy Product Promotion program, which allocates $15 million for public educational institutions and youth programs to purchase organic dairy products.

California State University, Fresno, is partnering with USDA to implement the program at schools in California.

Organic farming groups such as California Certified Organic Farmers are looking to the California Department of Pesticide Regulation’s Sustainable Pest Management framework as a means through which to secure procurement commitments from the state. Under the framework, DPR has directed state agencies to develop purchasing criteria, recommending they consider organic certification among other factors.

“We want all of our farmers, including those for whom organic makes the most sense, to have diverse market opportunities available to them,” said Chris Reardon, director of government affairs for the California Farm Bureau.

CCOF Policy Manager Laetitia Benador said contracts with public institutions are valuable for farmers because they ensure reliable sales. “Procurement means a stable market,” Benador said.

A significant shift in the state’s procurement priorities would inevitably bring challenges.

Built into the business model of organic farms is a higher price point to make up for lower crop yields. That can be an obstacle for institutions working with tight budgets. For school districts, Anicich said, “their job is to not lose money.”

There are also challenges associated with establishing the infrastructure and supply chains needed to get organic products from farms to school cafeterias.

Yael Cypers Kotick, director of procurement at the Alice Waters Institute for Edible Education and Regenerative Agriculture, has worked during the past year to implement CDFA’s Farm to School program in the Los Angeles Unified School District, the second largest school district in the nation.

Last year, which was the first year of the program, LAUSD purchased 517,000 pounds of produce directly from small and mid-sized local farmers, 59% of which was organic, according to the Alice Waters Institute. The schools were able to find pricing that worked for them, Cypers Kotick said, but they encountered obstacles as basic as figuring out where a carrot—sourced from a small farm and shipped to schools with limited kitchen infrastructure or staffing—was going to get washed.

“There’s this huge gap in the middle,” she said. “Physically, things are not set up to accommodate this kind of sourcing.”

Still, Cypers Kotick and others said working to establish those market channels can benefit schools and organic farms while advancing the state’s climate goals.

“Public procurement seems to make a lot of sense,” said Galt, the UC Davis researcher. “Farmers are going to need to be economically viable to continue to survive in the organic world.”

(Caleb Hampton is an assistant editor of Ag Alert. He may be contacted at champton@cfbf.com.)