Organic farms declining, even as sales soar

WELLINGTON – The number of certified organic farms has declined dramatically in Northern Colorado and the Boulder Valley since 2007, driven in part by rising water prices, according to the 2012 Census of Agriculture.

Organic product sales, however, have risen sharply in Weld, Larimer and Boulder counties, according to censuses taken in 2007 and 2012 by the U.S. Department of Agriculture.

First conducted in 1840, the agricultural census is the leading source of facts and figures about U.S. agribusiness. USDA surveys farmers and ranchers, regardless of size or type of operation, for the census every five years.

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Weld County had 27 certified organic farms in 2012, the same as in 2007. The number of organic farms in Larimer County declined by about half to 12, down from 23 during the same period. In Boulder County, the number of organic farms slipped to 15 from 34.

The decline or flat growth of farms in the region comes amid an industrywide consolidation in agriculture, in Colorado and nationwide. The number of Colorado farms dropped to 36,180 in 2012, down nearly 900 farms from 37,054.

Farm acreage slightly increased by 282,000 acres to 31.9 million from 31.6 million during the same period. Nationwide, the number of farms also declined to 2.1 million from 2.2 million during the period. Farm acreage declined to 914 million acres from 922 million acres.

At the same time, organic product sales rose to $2.2 million in Larimer County in 2012, a 243 percent increase from the $642,000 reported by organic farmers in 2007. In Boulder, organic sales increased 160 percent to $2.1 million from $809,000 during the same period. Organic product sales in Weld County totaled $39.6 million in 2012, although the census does not list a sales figure for 2007.

Statewide, organic product sales have risen to $68.2 million from $50.6 million, a 35-percent rise.

U.S. organic product sales rose to $3.12 billion in 2012, up from $1.7 billion in 2007, but accounted for less than 1 percent of the total value of U.S. agricultural production. U.S. producers sold a record $394.6 billion worth of agricultural products in 2012.

Organic producers use methods to preserve the environment and avoid genetically modified traits, pesticides and antibiotics. Organic livestock producers must meet animal health and welfare standards and use organic feed. Labels on organic food contain a USDA organic seal.

Northern Colorado and the Boulder Valley are home to some of the major players in organic farming, including Boulder-based Aurora Organic Dairy, which recently expanded with a new dairy near Eaton that has capacity for 3,200 more cows of the company’s total herd of 22,000.

Meanwhile, smaller organic farmers such as Grant Family Farms in Wellington have failed. The 2,000-acre farm, started in 1953 by Colorado State University professor Lewis Grant, shut down Dec. 28, 2012, when it filed for Chapter 7 bankruptcy.

Dawn Thilmany McFadden, Colorado State University Professor and Agribusiness Extension Economist, explained that Northern Colorado and the Boulder Valley have experienced the same organic economic trends as have the rest of the state and nation.

“There’s economies of scale pressure,” said McFadden, explaining that producers must farm more acreage and grow their herds to afford expensive equipment and labor.

In this region, pressure on water resources has led to the decline in organic and other farms alike.

“Water rights are worth a lot,” she said. “Once you don’t have water rights, it’s hard to farm.”

Simultaneously, organic farm sales have surged because of increasing demand for organic products. Many smaller organic farmers have stopped seeking the federal organic certification, a rigorous and expensive process, although they have continued farming and marketing directly to their customers.

Larger farmers, meanwhile, have reaped the benefits of heightened demand for certified organic production as it gained prominence on shelves of larger retailers, she said.

“The mid-size to large farmers who do want to be in King Soopers or Whole Foods, or marketed to restaurants as organic … those all have to have the certification to get in,” she said.

Organic farmers say they have succeeded because of the elevated demand, but the farming method remains challenging.

Richard Seaworth, who farms organic corn, pinto beans and sorghum near Wellington, said organic farming consumes more resources, such as water and fuel, than traditional methods because farmers must till their fields more often. He said he does not plan to expand his organic operations anytime soon.

“The margins are there,” he said. “That’s not the issue.”

Seaworth said hiring and equipment costs have posed challenges. The scarcity and higher prices of water also have made organic farming operations even more difficult, he said.

Greg Schreiner, who farms land once leased by Grant Family Farms, said sales have grown because of demand from restaurants in Larimer County as well as local food offerings from grocery stores such as Whole Foods.

The higher sales show that the industry survived the recession because consumers made a commitment to organic products despite higher price tags.

“The organics mean so much to people that they’re willing to make sacrifices in other parts of their budget,” Schreiner said.

Steve Lynn can be reached at 970-232-3147, 303-630-1968 or slynn@bizwestmedia.com. Follow him on Twitter at @stevelynnBW.