3 Ways Consumer Trends Impact Your Farm
Not everyone agrees on the details, but there’s no disagreement on this: Change is coming rapidly for the food business, and it reaches all the way to farm level.
That would be the summary of a recent conference in Omaha called Food and Ag at the Intersection. Several hundred people discussed changes in consumer demands brought on by the swelling tide of younger consumers and their attitudes about nutrition, health, and the origin of food. Here are a few of the highlights.
1. Vegetarian numbers are growing, but modestly.
So says ag economist Jayson Lusk of Purdue University, who tracks consumer trends through a monthly survey of over 1,000 people across the country. “Historically about 4% to 5% of people have identified as vegetarian,” says Lusk. “Now it’s up to about 7%. Vegetarians tend to be younger, higher income, and female.”
Also growing is the number of people who identify as “flexitarian” or part-time vegetarians. Some flexitarians, for instance, only eat meat on weekends.
These trends are important because animals represent 47% of total farm receipts, says Lusk. When you add the impact on feed grain usage, animal ag is over half of all agriculture. That means the developing meat wars over vegetarianism, plant-based meat, lab-grown meat, and traditional animal agriculture will have a huge impact on all farmers.
2. Meat alternatives continue to make inroads.
That comes from Bruce Friedrich of the Good Food Institute, which represents and promotes meat alternatives that are both plant-based and lab-grown. He says plant-based meat alternatives, including the Impossible Burger which was recently added to Burger King test markets, has grown by 20% in the last year and is now a $3.7 billion market. And, he adds, 13% of the milk market is now plant-based and growing.
Twenty-five companies have now jumped into the cell-based meat market, says Friedrich. A sliver of animal muscle is taken and grown in a laboratory into chicken, beef, or pork. Those companies are in a race to bring that technology to a large enough scale to have product for sale. Friedrich thinks they could have demonstration product within two years and be viable commercially within 10 years.
“Where it takes six weeks to raise a real chicken to market size, we will get that same growth in the lab in six days,” he says. And it will be more efficient and lower cost than growing a real chicken, he predicts, because with lab meat there is no energy expended to grow the low-value things like feathers and entrails.
3. Organic farming may look good on the surface, but the risks of converting to organic (no chemicals, commercial fertilizers, or GMOs) are huge.
That is from JP Rhea, a farmer at Arlington, Nebraska. His family runs one of the largest organic farms in the country, at 11,000 acres, on which they grow organic corn, soybeans, and several other crops.
“It sucks right now being a corn farmer,” says Rhea of those who grow conventional crops. The perpetual low markets are part of the reason that his family decided to convert to organic a few years ago. Now, Rhea can sell organic corn for $9 a bushel or more to feed organic chickens and other livestock.
“But even $9 a bushel isn’t attracting many new organic corn growers,’ he says. That’s because of the risks of converting to organic. It takes three years of organic practices before a field is certified organic, and that’s a three-year cash flow drag. At the end of three years, there’s no guarantee of what the market will be for the organic crops.
“The risks of switching to organic are pretty overwhelming for most farmers,” Rhea says. Consequently, the numbers of organic corn and soybean acres has actually declined since 2008, and most organic corn and soybeans fed in the U.S. is imported.
“We need to dramatically rethink how we approach and manage risk if we want farmers to change production practices,” Rhea says. “For instance, the supply chain for conventional corn is in place and taken for granted. But it’s not there with organics. You can’t go to your seed supplier and get much information on organics. There’s good potential for more organic corn, but lots of things need to fall in place.”
He’d welcome a system that would let him sign long-term contracts for his organic crops. “I may get $9 a bushel for organic corn today, but I’d take less if someone would offer me a five-year deal. That would help me on the risk side.”
His farm has fine-tuned organic production practices to the point that corn yields are nearly on par with conventional corn. They averaged 180 bushels per acre on organic corn last year, with some fields going over 200 bushels.
The Food and Ag Intersection conference was sponsored by Farmers National Company, Lindsay Corporation, and Gavilon.