DAYTON, Ohio – There have been some positives over the past year, according to Kellee James, founder and CEO of Mercaris Corporation, a market data service and trading platform for organic, non-GMO and other identity preserved products.

In the short term, James said with an economy wide shutdown, everything came to a screeching halt, as schools and restaurants were shut down and pantry loading took place as consumers made a run on grocery store inventory. Prior to the shutdown, 51 percent of food was consumed outside of the home, but traditional organic food is typically consumed at home.

“(The) organic market saw sales rise dramatically during this phase,” James said. “But organic prices didn’t react immediately because it takes awhile for the impact to filter through the system. So far the prices for row crops did not have an immediate reaction.”

James said when COVID hit, there was a lot of food waste going on because it is hard to repackage food that is delivered to restaurants and schools and turn it over to the retail market.

“We also saw plants closing as employees got sick and plants were forced to close,” James said. “It definitely showed the vulnerability of the supply chain.”

In the medium term, James said we are seeing two economies and two Americas.

“Food insecurity has almost doubled in the past year,” she said. But at the same time, organic food have gone up in sales because of emphasis on health and wellness, as well as the desire to know the farmers who produce the food. James said consumer  demand for organic food is up 12 percent in all categories, including dairy, eggs, meat, produce and packaged goods.

Looking at the long term, there are a lot of things to watch in the organic market, according to James.

When COVID hit, there was concern as to whether certifiers will be allowed to continue to do on-site inspections, James said.

“But we have figured out how to do these things,” she said. “We also haven’t seen a lot of disruption on the production side; planting continues, inspection continues. We think we have things pretty well solved unless there is some kind of black swan event.”

James said that we need to watch how long unemployment remains elevated. “Right now part of the economy that organic relies on has held up pretty well,” she said. “But that is not a given in the future.”

James said there are some structural employment concerns that will remain in the longterm.

“What type of consumer habits have been created and will they remain in place for the long term,” she said. “Will people contine to work from home and what will that do to certain aspects of the markets, such as casual dining restaurants. Will people continue to cook and eat at home. I think we will see less food consumed away from home than we have in the past.”

James added that producers should look at how they can take advantage of that growth (in the market) by maintaining the integrity of organics and trust with the consumers and take advantage of the growth that has occurred over the past year.