scaleConsumer Sentiment and Supply Scalability Will Determine Future of Organic Price Premiums
Consumer demand for organic products has been growing steadily – U.S. organic food sales approached an estimated $37 billion in 2015, up 12 percent from the previous year. Although organic products often come with a higher price tag than conventional counterparts, the U.S. Department of Agriculture’s (USDA) organic certification offers an assurance to consumers that their food has not been produced with synthetic fertilizers, sewage sludge, irradiation, or genetic engineering, and that the distributors and retailers have not comingled organic foods with non-organic products. So far, this appears to be a trade off that many Americans are willing to make. Despite higher price premiums, however, supply-side challenges could threaten organic agriculture’s ability to meet growing demand. Read More…