Organic Divide: Part II

The USDA's Economic Research Service analysis looks at the "catch 22" of organic produce - future demand growth depends on smaller premiums between organic and conventional, while organic supply growth depends on continued hefty premiums. Here is a spreadsheet showing the price spread on broccoli.
Here is the gist of the long report:

The trends in price premiums for broccoli and carrots over time suggest that, for the time being, even though certified organic acreage is rising rapidly, demand appears to be growing fast enough so that farmers and wholesalers are maintaining an organic premium. Interestingly, the wholesale organic premium consistently exceeds the organic premium at the farmgate for broccoli and carrots. In contrast, wholesale price premiums and prices for both organic and conventional mesclun mix have continued to narrow since the mid-to-late 1990s.

TK: Keeping the chain reaction of expanding supply and building demand is a precarious formula, but this analysis seems to say growers are still finding enough premium to expand acreage. It would certainly be easier to track organic premiums if more organic prices were reported by the USDA market news.


The Packer's Susie Cable passes along this link to a Business Week story about Chipotle Mexican eateries. Here is a quote that relates to organic from the piece.

Today, all of the pork Chipotle sells in its burritos and tacos comes from hogs raised naturally on family farms, without antibiotics or hormones. But while Chipotle uses fresh avocados, tomatoes, and peppers, almost none of its produce is organic. It's simply too expensive, says Ells.