by Craig Wichner, CEO, Farmland LP
2022 was a breakthrough year for organic agriculture. Consumer demand for organic food continued to rise steadily, with strong prices for producers, rising land values and excellent returns for investors. In addition to these results, three major trends were in sharp focus last year that will continue to impact not only organic farming, but the entire agricultural sector: rising consumer demand for healthy food, the fragility of the conventional farming system and investor interest in sustainable agricultural practices.
The organic market is experiencing strong momentum. Demand is growing as consumers increasingly recognize the benefits of pesticide-free, healthy organic food. They also see conventional, chemical-based agriculture and food production becoming increasingly industrialized and commoditized, harming the environment and producing unhealthy, pesticide-laden food. Today, organic food is a $56 billion market and represents 6% of all U.S. food sales. Demand is growing at 13% annually and is limited by a lack of supply, as organic farmland makes up only 1.2% of total U.S. farmland and is growing at only 7% annually. The result is a price increase of 50 to 200 percent for organic products.
These strong foundations were also reflected in our company. Farmland LP will be in its 14th year in 2022, and in that time we have demonstrated that organic farming is profitable at scale. Today we manage more than 16,000 hectares, valued at $250 million, and grow 40 crops on our farms. By converting conventional farmland to organic farmland, we have increased rents from $300/acre to $750/acre. We have also increased yield per hectare by up to ten times by switching from commodity crops to higher value sustainable crops.
Read Craig’s full article on all three trends here – https://greenmoney.com/three-trends-driving-the-growth-of-organic-agriculture