Consumers' demand for organic goods has increased continuously. This has provided farmers in the US with market incentives for a variety of products (Marsden, 2018). Over 20, 000 stores for natural foods in the US have organic foods as well as over 90% of the conventional stores have organic products as well. According to the recent statistics on the industry, it shows that the sales of organic products contribute over 4% of the whole product sales in the US. The demand for organic food is increasing continuously.
Farmers in the US are producing organic foods, but they are not meeting the demand of organic food by the consumers (Girotto, Alibardi and Cossu, 2015). They are using all means available to try to satisfy the increasing appetites for organic foods. But they are not able to meet the demand, even with the interference of the farmlands as well as the finances. The economic research on the organic shows that, the retail auctions of natural foods in the US, have enlarged three times between the year 2004 and the year 2014, for over 25.1 billion shillings. According to the organic trade organization. In as much as customers are willing to pay an extra dollar to get the natural foods. the farmers, on the other hand, have failed to meet the high demand of the consumers. The reason as to why the demand is not met according to the farmers is because it needs much cash to practice organic farming and funding is not easy. However, more customers, especially in the cities, have decided to impress more of the local programs that produce organic food. The consumers, who pay more for organic foods, argue that, even if they pay more for organic foods, they have long-term benefits. However, experts have suggested that for the natural foods for decreasing, then the organic farms should increase.
In as much the industry for organic growth is growing every day, there is no much information concerning the market structure (Facchini, Iacovidou, Gronow and Voulvoulis, 2018). The demand factors always dominate the supply factors according to the research conducted by the experts on the field. However, from the supply and demand point, there are numerous challenges on the cost and the entire process of getting organic foods to the market. More concern is also laid on the conditions as well as the operations that are carried on the medium as well as the small-sized farms. Supply is also linked to the methods of operation and operations, in the respective organic farms be they small-scale farms, mediums as well as large-scale farms. Many factors are taken into consideration before the organic food prices are decided. The production costs, operations, the inputs used are all harmonized before the organic foods are supplied at a particular value. However, the supply of organic foods depends on the demand by the consumers.
As per the report produced by BB&T, capital markets it suggests that the price of organic price premiums as well as the current pricing are still low when looked from the consumer supplier point of view (Martinez, 2015). The natural foods most of the time dictate the price premium; therefore they end up in narrow margins. The supply of the same on the other hand, has not also kept the required pace. According to this report, there is a chance of retail prices shooting up in the market for organic products. According to this report, this will also have a negative effect as it hinders the new consumers who could wish to begin purchasing the natural foods. The report looked at the pricing of organic foods for numerous categories, and there was a range of differences that were discovered. On the part of organic animals, the big challenge lied on the sourcing of the organic feeds, which is expensive (Porter and Kramer, 2019). The report indicated that the situation was worse for farmers in California. Due to some drought that was experienced in the state. Finally, the report suggested that the beef sector, as well as the organic dairies, experienced challenges because the pricing for organic production was relatively low.
The continued growth of consumers' demands organic products has led to numerous business people investing in the industry, as there is more business opportunity in the industry. Consumers are making more bold decisions about purchasing organic foods at high prices. This has also made the companies and farmers producing organic foods, to ensure that they meet the standards of the consumers. The other thing that the farmers, as well as the processing companies, are concerned with is being consisted in the supply of the organic foods all the time. On the other hand, since the demand of the organic foods is increasing every day, then the organic farms should be increased so that, here can be enough natural products to be supplied to the consumers. The regulations should also be placed in place to ensure that the organic foods produced are saved and 100% organic.
Facchini, E., Iacovidou, E., Gronow, J., & Voulvoulis, N. (2018). Food flows in the United Kingdom: The potential of surplus food redistribution to reduce waste. Journal of the Air & Waste Management Association, 68(9), 887-899.
Girotto, F., Alibardi, L., & Cossu, R. (2015). Food waste generation and industrial uses: a review. Waste management, 45, 32-41.
Martinez, P. E. (2015). Behind the Curtain: A Look into Food Production in the United States.
Marsden, T. (2018). Theorizing food quality: some key issues in understanding its competitive production and regulation. In Qualities of food. Manchester University Press.
Porter, M. E., & Kramer, M. R. (2019). Creating shared value. In Managing sustainable business (pp. 323-346). Springer, Dordrecht.
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