Milling & Baking News - December 22, 2015 - 23

Data

SOMETIMES IT'S
WHO YOU KNOW

Organic field crop production
stays low despite strong demand
WASHINGTON - Production of
organic field crops remains low despite often wide price premiums and
demand that in many cases outstrips
supply, according to the Economic
Research Service of the U.S. Department of Agriculture.
Certified organic area for wheat
appears to have peaked in 2008 while
area for corn, soybeans and most
other crops continued to increase.
"Despite potentially higher returns,
adoption
of
the organic approach
among U.S. field crop
producers remains low,
likely due to low crop
yields and challenges of
effective weed control,
among other factors,"
the U.S.D.A. said in the most recent
issue of Amber Waves. "Organic corn
and soybeans have been profitable,
primarily due to the significant price
premiums paid for certified organic
crops that more than offset the additional economic costs. Organic
wheat has been less profitable."
Total certified organic crop acreage
nearly doubled from 638,500 acres in
1995 to 1,218,905 acres in 2000, more
than doubled to 2,643,221 acres by
2008 and increased another 17% to
3,084,989 acres by 2011, which was
the most recent year the U.S.D.A. had
numbers for total organic crop area
based on somewhat sporadic data
from organic certifiers. But those organic acres still comprised only 0.83%
of total crop area of 370.7 million
acres in 2011, the U.S.D.A. said.
Total organic acreage increased
about 138% from when the U.S.D.A.'s
National Organic Program began in
2002 to 2011.
Wheat had the most certified organic area of any major crop with
344,644 acres, equal to 0.63% of total
wheat area in 2011. Next was corn
with 234,470 acres, equal to 0.26% of
total corn area, followed by soybeans
with 132,411 acres, equal to 0.17% of
total soybean area.
Organic wheat area at 344,644
acres in 2011 was down 17% from
415,902 acres in 2008. The most recent U.S.D.A. census data indicate
organic wheat area in 2014 at 263,881
acres, which is down 23% from 2011
but may not be directly comparable
since the prior data was sourced by
the U.S.D.A. from organic certifiers.
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The shifts in organic acreage, small
in the grand picture of U.S. field
crops, comes against a background
in which total wheat harvested area
has trended lower for decades. Wheat
acreage dipped to a 45-year low in
2013, while corn and soybean area
has trended higher, with corn record
high in 2013 and soybeans in 2014.
But the U.S.D.A. data appear clear
on one point, wheat was the least
profitable of the three major crops.
A comparison of additional costs associated
with organic production with historic price
premiums over conventional crops indicated
much better returns for
corn and soybeans than
for wheat. Net returns above economic costs were $51 to $66 per acre
for corn and $22 to $41 per acre for
soybeans, while wheat saw negative
returns from $2 to $9 per acre, the
U.S.D.A. report said.
"The gap between average organic and conventional wheat prices depended on the type of wheat
produced," the U.S.D.A. said.
"Throughout 2011-14, price premiums for organic food wheat increased, reaching above $10 per bu,
much higher than the economic cost
differential of $3.90 to $4.46 per bu
between organic and conventional
wheat production. However, farm
prices of organic feed wheat were
only $1 to $4 per bu higher than
those for conventional wheat, often
below the additional economic costs
of organic wheat production."
In a separate report the U.S.D.A.
said average food grade wheat prices were $7.87 per bu higher than
conventional prices from 2011-2014,
while the average feed grade wheat
price was $4.17 higher.
"Price premiums for both food
and feed grade organic wheat were
roughly at or below the higher economic production costs during much
of 2011-12, but improving price premiums for organic wheat in 2013-14,
especially food grade wheat, improved organic wheat profitability in
recent years," the U.S.D.A said in a
September report.
The U.S.D.A. cited several possible
reasons for the slow adoption of organic field crop production.
"One reason ... may be a lack of

hile planning to earn both a
master of science and doctorate
degree in biology, Norman Fox wanted
something to do "on the side." His "something on the side," was the Donut Den
which turned into a 33-year success.
When Norman decided to open a
doughnut shop, a friend, Herb Stewart,
introduced him to Oliver Harlow, founder
of Honey Flush Donuts, a 40-store chain.
Stewart and Harlow helped Norman open
the Donut Den, in July, 1973, in Nashville,
Tennessee. "Oliver Harlow not only
inspired, but gave me valuable practical
advice," said Norman.
Harlow started using International®
Bakers Services (IBS) flavorings in the
1960s, and suggested that Norman do the
same. He highly recommended
Cinnamon-Butter Blend. Today, that flavor
is the secret ingredient in the Donut Den's
Apple Fritters-their most popular product. "There is no other type of cinnamon
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Consistency is the key to success in
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line and keeping up with new trends keeps
regular customers coming back and
attracts new customers as well. "Another
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our own Harold Graves, the cook for the
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to Norman.
Norman was a graduate student during
the first four years of the Donut Den.
After earning his doctorate degree, he
taught in university classrooms. But it
was a friend of a friend who taught him
his most valuable business lessons.
Sometimes it's who you know that helps
the most.
If you value consistent quality, you
should get to know International® Bakers
Services. Contact us toll-free at (800)
345-7175, by fax at (574) 287-7161, or in
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flavors your customers deserve.
Milling & Baking News XDecember 22, 2015 / 23

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Milling & Baking News - December 22, 2015

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