Probably because both your choices are fine - it comes down to personal preference. The shopping cart idea is well known. But sometimes it gets old if you have to keep going back and forth between the cart and the item selection.
What's wrong with the separate grid? -That way you keep the selection list separate from the ordered items list?
Why tie the user to selecting the correct category and then selecting the quantity and hitting a button?
Why not use some type of autocomplete search so they can type in the produce name they want? Then a user could type "widg", get a drop town of choices, hit tab to go to a quantity field, enter a number, and then hit enter.
Display a quickie preview with the aucocomplete too, like as single row of your data.
Then throw all these into another grid at the top of the page if its a critical part of the application, maybe at the bottom if you think the actual grid results are important.
The reason I don't like category drop downs is people who are familiar with their jobs or company usually know the names and even skus numebers for what they are trying to do. Having them select a category instead of typing just slows them down. Also I hate running into the "which category is this?" moment. For example, is a chicken a pet, food, livestock, or food producer?
I strongly agree with your first choice: users need to see somewhere what they have chosen or they will probably keep choosing it over again thinking it failed. Waiting to display it on a summary page shouldn't even be an option. I don't see much wrong with binding to another grid, although a repeater is also a decent option. Well, there are many options. Anyway, if there is room to do this off to one side or another - especially the left- I definitely would, rather than at the bottom. Also, bonus points for enabling users to change the quantities (or delete all) of an item they already selected, wherever you choose to display this.
I like the idea of a search, but be careful with auto-complete. Google style is good where it displays results below, but I've seen people develop some that are way too aggressive and love to write over what you're typing: this is awful. Good luck.