Pick up an organic apple at the supermarket and compare its price to the same non-certified organic apple in the next bin. You’re not imagining it: the organic apple commands a premium price. Although prices of organic products have declined over the past few years, they remain above their non-organic counterparts and may stay that way.
Here’s why.
Organic Farming is Labor Intensive
Chemical fertilizers and synthetic pesticides allow conventional farmers to reduce the cost of production because they can get the job done quicker and more economically. Organic farmers won’t apologize for this premium price. They believe it reflects the real cost of growing food that’s healthier for you, and less impactful on the environment.
Demand Determines Pricing in a Free Market Economy
Less than one percent of the farmland worldwide is purposed for organic farming. What’s more, organic farms generally yield less than conventional farms. With nearly 60 percent of Americans expressing a preference for organic over non-organic products, there’s simply not enough organic farming activity to satisfy the demand.
Organic food has a higher price tag just like any product that is popular but limited.
The Certification Process is Expensive
For starters, an organic farm must pay an annual inspection and certification fee costing from $400 to $2,000. Organic farming and production methods are required to comply with the USDA standards – which include strict daily record keeping. Additional employees are necessary to do all of this extra work. That expense is reflected in the higher prices of organic food.
Organic Food Takes More Time to Grow
Organic farming methods prohibit the use of chemical fertilizers, which can speed up the growing cycle of fruit and vegetables. Conventional livestock is quickly matured using growth hormones. Growing things organically means going at nature’s pace – and that’s slower. And, organic farms are often considerably smaller than conventional farms. This also helps to explain why the demand exceeds supply.
Additional Production and Post-Harvest Costs
After going through all of the extra effort to grow organic products, the last thing anyone would want is for them to be mingled with non-organic products. This segregation adds an expense to harvesting and production. Conventional produce is often shipped in extremely large quantities – mainly because there is more to be harvested using these methods. On the other hand, organic produce is shipped in far smaller quantities – again adding to the cost.
It’s More Expensive to Fertilize Crops Organically
Chemicals and sewage sludge isn’t very appetizing, but that’s what conventional farmers use to fertilize their crops. It’s inexpensive to purchase and transport. There’s nothing inexpensive about the organic route, and that includes the fertilizers they use: the cost of compost and animal manure is far more expensive. You pay for this difference in the quality of fertilizers when you buy organic food.
Subsidies for Organic Farming is Practically Nonexistent
Although subsidies do exist for organic farmers, they are a fraction of what conventional farmers receive from the U.S. government. Less overhead combined with higher subsidies allow conventionally farmed products to be priced lower. In some respects, the consumer is forced to step in and pay the subsidies that organic farmers aren’t receiving from the government.
How Can You Help to Reduce the Prices of Organic Food?
The biggest impact you can make is to purchase organic foods that need the biggest spaces to grow. This includes:
- Dairy Foods
- Beef
- Corn
- Wheat
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