International trade of organic food: Evidence of US imports

Abstract

AbstractOver the past decade, organic food sales and farmland have grown rapidly worldwide. As the US market for organic food has expanded, anecdotal evidence indicates that imports of organic food have increased. US organic handlers may be importing to meet consumer demand for out-of-season products, as well as products not grown domestically. Handlers may also be importing organic products that are in short supply or to reduce input costs. This paper provides the first examination of imports of organic products into the USA. Data from a national survey of certified organic handlers in 2007 are used to examine the extent, types and origins of imported organic commodities. A Heckman model is employed to investigate the factors that influence an organic handler's decision to import organic products, and the level at which organic handlers import a product. Summary results show that while many of the products being imported into the USA are those that cannot be produced domestically, such as coffee and tropical fruits, some oft-imported commodities are those that can be produced in the USA, such as soybeans, wheat, barley and berries. The summary results also show that organic handlers are procuring almost a half of their imported products from a few countries, including Canada, China, Mexico, Brazil and Indonesia. In the econometric analysis, we found those handlers prioritizing local suppliers negatively affected the facility's decision to import products. The use of a social label, such as Fair Trade, positively affected a handler's decision to import. The size of organic sales was important to both the decision to import and the share imported, with larger firms more likely to import and smaller firms less likely to import. However, once a smaller firm had decided to import, they imported a larger share. Finally, our analysis found that experiencing limited supplies or prioritizing price with suppliers did not influence a handler's decision to import products. Based on the findings, we suggest future research avenues, including studies that address consumer preferences and the impact of increased imports on domestic organic farms.