Lately, I have noticed a number real estate sites advertising a farm or ranch land as being organic. However, the land is not United States Department of Agriculture (USDA) certified organic farm land or organic ranch land. The lack of USDA organic certification is equivalent to a seller stating that their home is well maintained.
What does “well maintained” really mean? What is an “organic” farm? When I see a piece of property advertised simply as organic, I’d like to think that is a nicely maintained piece of property. I would also want to see it in person to make sure that it does not have excessive weed problems. I also want to know if it is certified organic.
Not all producers that sell “organically produced” food are willing to be certified or can afford to be certified. Even though they may not want to deal with government bureaucracy, these producers may be closer to complying with the publics expectations of what organic food really is. If they are selling their place, you might be getting an awesome farm. Just know that you can’t sell the produce as certified organic without the certification. (If you are purchasing their food – enjoy it and feel good for supporting a local farmer or rancher that is taking wonderful care of their place.).
However, in the business world of organic products, the piece of paper that says that it has been certified organic by the USDA is extremely important because of the federal organic labeling requirements. It generally takes at least three years for a piece of property to transition to the organic status thus qualifying for organic certification. In addition to the land being certified, there are other rules that have to be followed depending on what is being grown, raised or processed. The certification process takes time and it requires lot of record keeping.
The positive side of to all of this is that the certified organic food is a booming niche for producers that are willing to put up with the bureaucracy and other challenges associated with organic production. The demand for organic food has been significantly increasing. Look at these numbers that have been reported by the USDA and the Organic Trade Organization:
US 2012 organic sales – $28.4 Billion
US 2015 organic sales- $43.3 Billion
Of the $43.3 Billion dollars, $39.7 billion of it was for food. In 2015, certified organic sales only accounted for 5% of the food sold in the United States. Therefore, there is still plenty of room for growth.
Typically, it takes three years before a piece of land can be USDA certified organic. The rules required for certification depend on what is being grown or raised. The certification process takes time and it requires lot of record keeping. The rules also are changing and evolving, so I am not going to try to cover them here. The main point that I’m trying to make is that certified organic land is a valuable classification.
From a real estate perspective: If a farm, land or ranch is advertised as being “organic,” the buyer needs to find out if it has already been USDA certified organic. The latter adds value to the property because it can be immediately put into production for certified organic crops, diary, poultry or meat. In order to meet the growing demand for organic products, additional certified organic land is going to be needed.
I welcome any questions or comments that you may have.