U.S. Exports are Feeding South Korean Hunger for Organic Foods

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by Sarah Wang
Rising demand for organic products in South Korea has led to new export opportunities for American farmers and dairy producers in particular. Image: Bumsan Dairy Farm, South Korea.

On July 1st, South Korea signed its first ever organic equivalency agreement with the United States, its first such agreement with any trading partner. The deal means that organic condiments, cereal, baby food, frozen meals, milk and other processed products can be classified as organic in either country, providing greater access to each other’s organic markets.

It was only in October 2002 that the U.S. Department of Agriculture adopted national standards for organic products in the United States. As recently as 2013, the Census Bureau detailed 35 organic import codes and 26 organic export codes for tracking, where there had been none prior to 2011. In January 2014, the United States signed an equivalency agreement with Japan regarding organic products, joining agreements it had previously signed with Canada and the European Union. With its new agreement with South Korea, the United States stands to build on its strong organic export market. In 2013, U.S. organic exports to South Korea totaled $35 million and they are expected to double over the next five years. South Korea is the fifth largest market for U.S. agricultural exports overall, and its organic food market is projected to grow to $6 billion by 2020.

The organic dairy market in South Korea in particular is set for a boom, with predictions of it reaching $419 million by 2017. In April, South Korea hosted the International Organic Expo 2014. This is due in large part to the popularity organic products are enjoying among South Korean millennials, who are excited by the health benefits dairy offers. This is music to the ears of dairy producers across the United States and in Wisconsin and Washington in particular.

In 2013, Wisconsin’s dairy products accounted for $399 million, making it the biggest export sector in the state. That same year, Wisconsin’s agricultural exports to South Korea totaled $153 million dollars. Congressman Reid Ribble, who represents Wisconsin’s 8th district, told Asia Matters for America “Wisconsin farmers produce a wide range of organic foods and beverages. This agreement will give our producers the opportunity to sell organic dairy foods and other products to an important new market. South Korea’s demand for organic dairy is on the rise and Wisconsin farmers are well-positioned to provide South Korean consumers with an array of affordable, nutritious dairy products.”

Washington’s organic dairy products have grown to 6% of the U.S. dairy market. In 2012, South Korea was Washington’s third largest export destination, with goods exports totaling $2.54 billion. Congressman Dave Reichert, who helped launch the East-West Center’s Korea Matters for America publications, expressed his delight over this new trade agreement. “I applaud this equivalency agreement that will serve to benefit America’s farmers and South Korean consumers. South Korea is a critical trading partner and this is the latest example of our strong relationship,” Congressman Reichert said to Asia Matters for America. “Just a few months ago, we celebrated the second anniversary of entry into force of the U.S.-Korea Free Trade Agreement (KORUS). I urge continued work together to improve our economic ties through tackling challenges in the implementation of KORUS.”

Sarah Batiuk is a Research Intern at the East-West Center in Washington, DC.