With suppressed commodity prices and challenged margins, many producers have begun to explore alternative methods of generating income. Questions about organic farming often enter discussions in my sessions and various travels. I hear, for example, “Is it fad?” or “Is the industry in a bubble?” and “Does it really pay off?” As it is a good idea to thoroughly explore any potential new market, let’s examine some producer feedback on the topic.

In one of my recent sessions, we used individual “clicker” technology to allow for anonymous answers. Approximately 800 producers were asked what percentage of their operation would be organic in three to five years. Approximately 28 percent indicated that 10 to 75 percent of their operation will be organic by the year 2020. Vegetable operations responded with the highest percentage, followed by hay, dairy and livestock.

Many continue to ask whether the demand for organic products is a fad. Well, the organic/local/natural movement is definitely a trend. The organic movement can shift markets depending upon the strength of the economy, food safety issues and the demand from various cultural and ethnic groups. Members of the millennial generation, ages 18 to 34, along with other demographic groups are now the drivers of change in the food and fiber markets for the U.S. as well as abroad.

The question of an industry bubble could be up for debate. Yes, in good economic times discretionary income can be shifted toward this type of product line. However, is it really a reasonable source of additional income in challenging economic times? Well, the steady growth of the organic market, as well as the related markets of local and natural, suggest a good, profitable niche market over time.

If exploring the organic market, either in part or whole for your operation, consider the following. Develop a business plan that includes goals and projected cash flow, which will require analysis of production, marketing and financial assumptions. Scenario planning that maps the impact of possible variables is also a prudent choice. The key is to develop a replicable system that generates a profit. However, if you are profitable, realize that competition will eventually appear. Staying ahead, either through a product, a service or both, will be critical. In addition, it normally takes five to seven years to build a product brand so initial capital and then working capital will be extremely important, particularly if you are launching the business. As with any new diversification or business opportunity, be sure to consider its alignment with your current goals, operation and obligations.

There is most certainly a future in the organic market. In fact, it is a growing area of opportunity. However, for sustainable success, one must align the market with the consumers and closely follow regulations such as food safety protocols. Analyze the opportunity through the numbers first and avoid the temptation to let excitement lead the charge.