Author: Maria Bampasidou

Some people say that growing organically requires a different mindset. Receiving a price premium particularly when demand is high guarantees increased earnings, but many producers shifting to organic put environmental stewardship and personal values at the top of the list. Between 2017 and 2022, the US experienced a notable surge in the organic agriculture sector, with the Census of Agriculture showing increases (about 32%) in organic product sales. However, the number of organic operations dropped from 18,166 to 17,321 (about 5%). 

Growing organic in the South has its own challenges; high pest pressure, high humidity and a region prone to extreme temperatures. As such, organic operations in the South tend to be smaller but are still important contributors to the sector. A closer look at the Census of Agriculture reveals some important changes in organic production for row crops and specialty crops. Arkansas, Georgia, North Carolina and Kentucky about doubled sales, Texas and Florida went up by 50%, and states like Louisiana where organic agriculture does not have a big economic footprint still reported a 12% growth. South Carolina and Texas were the only Southern states reporting a growing number of organic operations.

Another challenge that organic producers face is the USDA certification process. Transitioning to organic requires familiarizing yourself with the certification process and regulations of the USDA National Organic Program (NOP). The recent Census of Agriculture revealed a decrease in the farms with acres transitioning to NOP. Though the numbers may be discouraging, it is worth considering the level of responses the Census received which was low particularly in some states.

Figure 1: Number of farms with acreage transitioning into USDA NOP

It will be interesting to see how producers will respond to the changing production landscape in the near future. As USDA works in amending organic production standards and with the demand for differentiated products continuing to grow will USDA provide more support to organic production? As of now we have seen increased funding in organic production through grants, funding towards development of organic markets under the Organic Market Development Grant program and this is the fourth year that USDA provides cost share assistance for organic certification. Certified organic producers and handlers who have paid certification fees during the 2024 program years may apply for reimbursement of the incurred costs up to 75%. The application deadline is October 31, 2024. For more information see link below: https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/organic-certification-cost-share-program/pdf/2024/fsa_occsp_fact_sheet.pdf

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Bampasidou, Maria, and Juna Dylce. “Transitioning to Organic in the South.” Southern Ag Today 4(26.5). June 28, 2024. Permalink

Producers face production and marketing risks that could affect the operation’s financial performance every growing season. Developing strategies to mitigate such risk is essential for the health of the operation. USDA offers a number of programs to insure specialty crops including individual insurance programs, federal crop insurance, whole-farm revenue protection, and the production and revenue history insurance plan. 

Interest in insurance plans for specialty crops has increased with the Federal Crop Insurance program alone providing coverage for specialty crops amounting to more than $22 Billion in 2021 (Figure 1). In terms of broad categories, fruits and tree nuts receiving the highest share followed by vegetables and horticulture nursery crops.

Figure 1. Federal Crop Insurance Coverage for Specialty Crops, years 2007-2021. 

Some expansions of insurance products and programs to specialty crops piloted in 2021 with the production and revenue history insurance plan made available to FL strawberry producers for the 2021 crop year. Interested in learning more about available programs? A list of individual crop insurance programs is provided by the USDA Risk Management Agency: hyperlink https://www.rma.usda.gov/en/Topics/Specialty-Crops

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Bampasidou, Maria . “Insurance Plans for Specialty Crops“. Southern Ag Today 2(44.5). October 28, 2022. Permalink

Many specialty crops are cultivated in nurseries including flowers, shrubs, seasonal vegetables, and fruit trees. During the spring and early summer seasons nursery products are in high demand for landscape contractors, landscape architects, and people working on their yards and gardens. Nurseries also supply wholesale and retail distribution firms, such as garden centers, home stores and distribution centers. 

The last couple of years nurseries face added stress to keep up with increased demand while securing key production resources. An increase in nursery products and services can be attributed to (i) a spike in demand that started during the pandemic as more people turned to home gardening, (ii) adapting to new production practices such as adopting sustainable practices, and (iii) switching to soilless systems such as container production. The nursery industry faces same increasing cost and input supply issues as other agricultural sectors. Figure 1 presents information on farm production expenses with labor and fertilizers being two inputs that we have seen increases the last year. Persistent supply chain disruptions, price fluctuations caused by the pandemic and volatile energy prices, as well as increased labor costs particularly for those operations depending on H-2A labor are well documented.

In the nursery industry, labor costs, and fertilizers and pesticides are two costly production inputs. Jeb Fields reports that a $600 barrel of herbicide in 2021 now costs at least $1,500 so differences between 2021 and 2022 would be even more extreme. Another resource that is high in demand and low in supply is growing media and containers, with orders taking more than one year to be fulfilled. In nursery and greenhouse ~85-90% of all ornamental production nationally is containerized. The only non-container-grown ornamentals are some large trees, but even those are shifting to containers. 

While the nursery products and services are high in demand, the challenges the industry faces are persistent, and the new ones are daunting with ripple effects experienced in the green industry.

Figure 1: Selected US farm production expenses, 2020-2021F USDA, ERS 

Maria Bampasidou is an assistant professor in the LSU AgCenter Agricultural Economics and Agribusiness Department, and Jeb Fields is an assistant research coordinator and extension specialist at the LSU AgCenter Hammond Research Station.

Bampasidou, Maria and Jeb Fields. “Increased Demand and Persistent Resource Challenges for the Nursery Industry.” Southern Ag Today 2(22.5). May 27, 2022. Permalink