Eco-the Organic Food Industry

The Organic Food Industry
    The organic food industry is in the business of providing food grown without the use of insecticides, fertilizer, hormones, antibiotics or biotechnology. Americans are looking for more organically produced food today than they have in the past. The new appetite for this organic food has been in such a demand that supplies cannot keep up with this demand. The rate of growth in the organic food arena has been 15 to 21 percent per year. Total food sales are between 2 to 4 percent. (Quaidd, 2006)
    One of the obstacles in the organic industry is organic farms are not increasing fast enough here in the United States. Manufactures of organic foods have been looking to other countries for their ingredients. Another obstacle for the organic food industry is the cost to produce organic products is more expensive. With the need to look outside the United States for organic ingredients and the process of producing organic products, the prices for organic products are higher.   (Quaidd, 2006)
Shifts and Price Elasticity
    The price elasticity of demand for the organic industry at the present time is elastic. Even though the supply of organic products cannot keep up with the demand, the number of organic farms is increasing and supplies can be obtained outside the United States. Since organic foods are not the only foods available, they would be considered a luxury item. The price elasticity of supply is such that the increase of organic farms, and greater organic supplies, the price of organic foods will become lower. (Quaidd, 2006)
    The demand for organic foods is becoming so great that the American farmers cannot supply the need. The United States spends over $1 billion per year to import organic foods. The ratio is 8-to-1 with imported organic foods being the highest. Europe does not have as great of a demand for organic foods, so their farmers are able to export organic foods to the United States. (Faber, n.d.)