This report by the United States Department of Agriculture (Economic Information Bulletin No. EIB-55) dated June 2009 finds that consumer demand for organic products has widened over the last decade. While new producers have emerged to help meet demand, market participants report that a supply squeeze is constraining growth for both individual firms and the organic sector overall.
Partly in response to shortages in organic supply, Congress in 2008 included provisions in the Food, Conservation, and Energy Act (2008 Farm Act) that, for the first time, provide direct financial support to farmers to convert to organic production. This report examines recent economic research on the adoption of organic farming systems, organic production costs and returns, and market conditions to gain a better understanding of the organic supply squeeze and other emerging issues in this rapidly changing industry.
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