Iowa pushes organic farming to fill demand gap

Sales of organic food are one of the great success stories of U.S. agriculture in recent years. Consumers are buying more and the farmers growing the produce earn good money.

It seems like a winning financial formula.

But while organic food is so mainstream even Wal-Mart sells it, farmers have been slow to switch from conventional crops to organic.

"The amount of local food isn't even scratching the surface of the demand," says Jim Slama.

Slama heads a Chicago-based organization called FamilyFarmed.org that promotes organic production. Slama says the U.S. needs more organic farmers.

He says organic dairy operations have trouble finding enough feed for their cows, hurting milk production. Grocery stores sometimes can't get sufficient vegetables and fruit supplies.

"There's an insidious mindset right now against small farmers."

Slama says U.S. farmers may be missing out on a profitable opportunity.

"I think American producers, they're a cautious bunch," says Slama. "They try to avoid risk. Organic is different. The farmers themselves don't necessarily just jump into something new."

There are efforts underway to encourage farmers to make the leap. In Minnesota, the state helps pay the cost to certify a farm's organic status.

In Northwest Iowa, there's a more ambitious program. Officials in Woodbury County, the Sioux City area, are trying to build an organic food industry.

As part of the effort the county has trademarked the brand name "Sioux City Sue Foods," based on the old country music song.

Local farmers can use the name to market their products. The county offers tax breaks and other incentives to farmers who switch to organic production.

Woodbury County Rural Economic Development Director Rob Marqusee says he hopes to attract a major soybean processor to the area. Marqusee says organic foods are one issue where local governments can lead.

"There's an insidious mindset right now against small farmers and small businesses," says Marqusee.

Marqusee says federal farm programs are mainly oriented toward large scale grain production, offering little help to organic producers.

"What we have to do in the rural economic development is we have to figure out how can we take the people who are here and create something new from what we have," says Marqusee.

He says Woodbury County is trying to build a farm to market infrastructure for organic foods. Things like processing plants, storage units, shipping links.

Already the Whole Foods Market chain has starting buying from county farmers.

Dolf Ivener is a construction contractor in Sioux City. He also owns 60 acres of farmland. Encouraged by what the county's doing, he's converting that land to organic production.

"A lot of the organic is done very close to large populations. Close to Chicago, close to Minneapolis, on the east coast," says Ivener. "And all natural progressions are that it'll move to where you have more space and can do it on a bigger scale and we're it."

He says since farming is only a small part of his income, going organic was a fairly simple decision. He'll raise hay and alfalfa on the land. He says making the switch is much tougher for a fulltime farmer who's income and social identity are tied up in decades of conventional agriculture.

"You've been trained by the fertilizer company, by Monsanto, by all of these companies, this is the way we do it," says Ivener. "And to think outside of that box is going to be very difficult and it'll take a large premium on the price to make you make the switch."

Ivener says the current grain markets tend to work against organic production. High corn and soybean prices mean most farmers will stick with conventional agriculture. That could mean imports play an increasing role in the U.S. organic food industry. Imports already account for at least 10 percent of the market and most analysts believe that share is growing.

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