Led by Millennial buyers, demand for organic food across Canada is growing robustly. Demand is surging ahead of domestic production, which has been growing but not nearly fast enough to keep up.
“Demand is definitely outpacing supply,” says Jill Guerra, research and special projects co-ordinator for Canada Organic Trade Association (COTA). “We need more producers because more and more Canadians are asking for organic and in particular are looking for Canadian organic products.”
It’s not as if the farm sector has turned a completely deaf ear to organic markets. Statistics reveal continual expansion in the organic farm sector.
By the numbers
Canada’s organic acreage reached 3.15 million acres in 2017, an increase of 130,000 from 2016, and up over 700,000 from 2015, according to the latest figures from COTA.
The association counts farmers, retailers and everything in between as members, and it also reports that organic operations, including producers and processors, rose 16 per cent in 2017 to 6,365.
This includes 4,800 crop producers, up 13.3 per cent from 2016.
Quebec and Ontario have the highest number of certified producers (1,530 and 915, respectively), although those provinces have relatively small acreage, with 341,500 acres in Quebec and 160,700 in Ontario.
Saskatchewan, meanwhile, had 915 producers (tied for second) farming on 1.162 million acres of land in 2017, which represented a nearly 80,000-acre increase on the year.
The contrast is likely due to Quebec and Ontario having more fruit and vegetable producers, as well as their grain producers operating on smaller areas of land versus growers in the Prairies, particularly Saskatchewan, COTA says.
Organic livestock production is much smaller at an estimated 745 operators — up from 685 in 2016 — with most (240) in Ontario and Quebec close behind at 235.
“Meat production is definitely not growing as fast as demand,” says Guerra.
Part of the problem may be not having enough government-inspected and certified abattoirs for organic livestock, particularly in the Prairies, causing a blockage in the supply chain for anyone looking to become certified, she says.
“Sometimes organic can integrate within the regular supply chain, but having federally inspected, certified organic abattoirs, that’s a separate entity than a regular abattoir,” says Guerra.
Overall, pasture, forage and natural areas dominated the share of organic areas at 65 per cent, with field crops coming in at 32 per cent. Fruits, vegetables and root crops stood at two per cent.
Big, big dollars
COTA estimates Canada’s total organic market (including food and non-food items) at $5.4 billion in 2017, up from $3.5 billion in 2012.
Organic food and beverage markets totalled $4.4 billion, up from $2.8 billion in 2012, COTA estimates. Exports for 2017 were predicted to reach $607 million.
Impressively, between 2016 and 2017, the percentage of Canadian grocery shoppers who chose organic rose from 56 per cent to 66 per cent, Guerra says.
“A big piece of that is Millennials,” Guerra says, who reports 83 per cent of Millennials buy organics weekly, versus 62 for Generation X and 56 for Baby Boomers.
COTA calls Canada’s organic demand growth “exponential,” but also adds domestic agricultural production can’t keep up, resulting in increased reliance on imports.
Canadian organic imports were valued at $637 million in 2016. In 2015, Canada imported $652 million worth of 65 tracked organic products, a 37 per cent spike over 2012.
“We’re very strong on the grains side of the industry in numbers, but there’s a huge opportunity for those that wish to become organic producers on those other sides like cattle and fruit and vegetables,” says Garry Johnson, a Saskatchewan organic grower and president of SaskOrganics.
Attracting more growers
The organic farmer group that Johnson heads is trying to promote growth through transitional and agronomy workshops for conventional farmers and others who wish to produce organically.
“With proper agronomy and information that’s out there, we can improve our production base to help mitigate imports from other countries,” Johnson says. “We’re in a unique position where demand outstrips supply, yes, and maybe that’s a very favourable position to be in when you’re marketing, but we realize this cannot stay that way.”
Ontario organic vegetables grower Jennifer Pfenning points out one of the barriers to enticing more farmers into organics is competition from places like Mexico and California.
“Their costs of production are much lower in both organic and conventional generally. And so we often face incursions into our own market from those growing regions, even during peak season,” Pfenning says.
Competition from the U.S. and Mexico has additional advantages when it comes to certification, Pfenning says.
“Their standard is federally funded and fully funded; ours is not, it has been funded largely by the sector, and we’ve had to fight for funding,” she says.
COTA too would like to see government support for organic transition, explaining that during the three-year transition period to organic, there tends to be an initial yield drop that comes with changing production methods, but no organic premiums.
“The first three years are absolutely critical, and very, very difficult to survive as a farm in order to transition because you can’t command the premiums,” says Pfenning, whose family farms about 800 acres to produce, mostly vegetable produce. “You also don’t have your farming rotation and practices fully developed, and so in those first three years, you’ve got a lot of learning and a lot of difficulties that you face initially.”
Johnson, in his tenth year as a certified organic producer, now manages 4,000 acres of organic land near Swift Current with his wife Geri. He also favours governmental transition support.
“There are other areas of the world, other countries, offering governmental incentives to produce organically, which really helps,” Johnson says, “even just to be able to offer a bit of a subsidy, so it isn’t as much of a barrier for producers who decide to go organic.”
COTA points out that the U.S. and EU offer organic environmental programs and policies that provide incentives to their farmers to transition to organic.
Here in Canada, COTA says Quebec leads the way in government commitments to the organic sector.
“We promote Quebec as a model for other provinces when we speak with our provincial partners to showcase the positive impacts happening in the sector,” says Guerra.
Quebec has the largest number of total operations at nearly 2,100 in 2017, with the greatest increase in year-over-year operations at 505.
That province also experienced the largest growth in organic livestock producers, from 180 in 2016 to 235 in 2017. Organic crop producers, meanwhile, jumped by 315 to 1,530 in 2017.
Although the number of organic processors in Quebec fell by 20 in 2017, the province easily led the rest with 705.
“That’s why Quebec is a very good example for financially supporting operations,” Guerra says. “They’ve had pretty substantial government support for transition to organic in recent years.”
Another area needing improvement is data collection.
Pfenning says encouraging new entrants into the sector requires reliable, accurate data.
“In order to get that, we have to track the imports and be able to articulate the import replacement potential,” she says. “The reason we aren’t able to track it is because not everything that’s coming into the country is able to be identified at the border or tracked once it’s in the country as having been organic versus conventional.”
COTA adds that Canada’s organic sector continues to rely on voluntary data disclosure by certifiers and provincial organizations. Universal participation only came in 2016.
In its overview report for 2017, COTA said organic data collection systems were limited and inconsistently available. “The lack of robust, consistent and timely data results in uninformed decision-making, which poses a risk to the sector,” the report said.
Canada lags behind competitors in the U.S. and EU in data tracking and collection. Quebec, again, is at the forefront with the most extensive organic tracking and data collection in Canada, and COTA recommends that other governments here follow suit to invest in expanding and improving organic data collection systems.
“This is important because businesses, organizations and policy-makers rely on trustworthy data to make informed decisions,” COTA reports.