Cancel OK

The Status of Organics

Weighing the costs and rewards
Organics_MS

M&M West Coast Produce, Inc. became a certified organic distributor and broker about four years ago. “We saw the direction the market was heading and wanted to brand ourselves as an organic house,” explains Ray Del Toro, president. About 20 percent of M&M West Coast’s operation is devoted to organics, including domestically-sourced vegetables like kale and broccoli, and avocados from Mexico. The company packs organic vegetables under its own label and exports to Japan, Taiwan, and Canada.

At 4Earth Farms, LLC, in Los Angeles, organics represent slightly more than half of total sales. The company started carrying organic produce about eight years ago in a measurable way and became certified as a handler. “We were not growing organic ourselves, but we saw strong opportunity—so we started our own operations,” says Mark Munger, vice president of sales and marketing at 4Earth Farms. “We have a nice balance of organic produce we grow ourselves and partnerships with organic growers.”

Alternative Growing Venues
Fertile fields are not the only place growing organic produce—greenhouses, vertical farms in warehouses, and container farms have been cropping up across the nation. About 20 percent of greenhouse growers are engaged in organic, with greens as the highest revenue generating crop at these operations.

According to a survey by Agrilyst, greens bring in $64 per square foot or about $2.8 million per acre. Revenue is driven by not only year-round production, but better consistency in yields and premium retail pricing.

Transitioning To Organic
“Becoming a certified organic grower and producing a product is difficult,” shares Rick Lejeune, CEO of Heath & Lejeune, Inc., a Los Angeles distributor dedicated to organic produce. The company has been selling organics for nearly 30 years. “Domestic sources are under greater pressure from the high cost of land, water, and labor than foreign sources,” he notes.

Most growers rely on untreated conventional seed, which is permitted under federal requirements when organic seed is not commercially available. “Organic seed is a huge area of discussion,” says Lejeune. “It’s difficult to procure.”

Purists believe organically grown seed is essential to organic integrity. “There should be a strong program to develop and maintain organic seed banks,” Lejeune points out, adding, “there are organizations working to preserve the integrity of organic seed.”

Yields of organic crops average about 20 percent lower than conventional yields. At the same time, labor costs are usually higher. Hand labor for weed management in high-value organic vegetable crops can cost up to $1,500 per acre, according to the USDA’s Agricultural Research Service. And, like their conventional counterparts, organic growers are struggling with the labor shortage.

Twitter