In this installment of the ‘Agronometrics In Charts’ series, we the shrinking price premiums for organic apples and strawberries. Each week the series looks at a different horticultural commodity, focusing on a specific origin or topic visualizing the market factors that are driving change.

Organic producers typically receive higher prices for their commodities compared to conventional products, a price premium that helps offset the costs associated with organic farming. However, for key organic fruits such as apples and strawberries, these premiums have been steadily decreasing since 2015, according to the USDA.

Food price inflation in 2022 was at its highest since 1979, and consumers experienced higher food prices both for organic and conventional produce. While both organic and conventional food prices increased, conventional produce saw a sharper rise, causing the gap between organic and conventional prices to narrow. As a result, organic apple and strawberry producers faced shrinking premiums, making it harder to justify higher production costs.

During the COVID-19 pandemic, the Organic Trade Association noted that organic producers were hesitant to further increase their prices despite rising costs. This reluctance was driven by concerns that consumers, already facing high food prices, might shift away from organic options if the price differential grew too large. More recently, the decreasing trend has persisted. Supply chain disruptions and changing consumer spending habits have contributed to a more competitive pricing landscape, further limiting the premium organic growers can command.

Source: USDA Market News via Agronometrics.

(Agronometrics users can view this chart with live updates here)