The Cost of Organic Foods

January 8th, 2010 | Simcha Weinstein | 1 Comment »

It’s a question that you probably hear fairly often, and perhaps one where you never quite feel a comfort level when answering, and that’s “why do organic foods typically cost more than their conventional counterparts?” The question itself is very legitimate and is usually not meant to put us on the defensive, even though it can easily feel that way. No retailer wants to be in a position to explain higher prices. The strategy in the Organic Industry should not be a defensive one on this issue, but rather we should acknowledge the observation and move to educate the consumer as to why there is a differential in pricing between conventional and organic food.

Typically, organic produce is priced 20-25% higher than conventional product at the retail level. Sometimes the differential can be as high as twice as much, and sometimes only pennies. Below is some information that you can use in your discussion the next time you are asked “why organics are so high.”

– Cost factors such as growing, harvesting, storage and transportation are generally higher for organically produced foods, as farmers must meet stricter regulations governing all of these steps. As a result, the process of organic farming is more labor and management- intensive, which means higher costs.

– Because organic growers do not use toxic chemicals, more labor (and thus a higher cost) is required to deal with weeds and pests in the fields.

– Organic agriculture tends to be on a smaller scale than conventional farming and thus organic farmers tend to pay more per acre to produce their crops.

– Because of their size, organic farmers can often face added distribution costs. There are typically many more stops and deliveries in the distribution of organic food than with conventional.

– Historically organic farmers have not received federal subsidies or price supports for crops.

– If organic farmers dropped their prices across the board to match conventional products, we would run the risk that some of the steps taken to nurture the soil may be side-stepped. If this happens, their farms will not remain sustainable in the long run.

In the process of educating your customers about the organic farming process, it is very important that they are made aware of the real cost of growing food conventionally. There is mounting evidence that if all of the indirect costs of conventional agricultural production over time, including clean up costs due to pesticides in our water and soil, loss of soil and medical costs due to illness from pesticides were factored in, that organic foods would actually cost less. Seems like a reasonable conclusion to me.