The Costs of Organic Food

I am frequently frustrated with what seem exorbitant prices for some organic foods. It makes you wonder if some companies are exploiting the rise in demand for organic foods, or are costs that much higher? At a trade show in Calgary, I witnessed what I considered utterly absurd prices by an organic vendor there. Their cherry jam was $12, and $23 for a pumpkin pie!  As an Certified Organic producer, I hope to receive more for my products than conventional ones because my costs are higher, and the end product should be of higher quality. So how can imported organic jams can be lower in price at the local organic store than local jams?

What are the input costs?

Fruit is typically cheap in well established areas they are grown in. Cherries in Michigan are 1/8th of the cost of the going rate in Saskatchewan.  Also, labour costs are notoriously low in many areas in the world

Large companies have automated machinery to make jam at pennies per jar, and thousands of jars a day. Small companies, who do most processes manually, need to spend much more in labour costs to produce the same quantities. Large companies can also afford to make 10 cents of profit per jar when their sales volumes are in the hundreds of thousands of jars. Small companies selling 1000 jars a year need to have a higher profit margin to make it worthwhile.

What are the company goals?

Every company needs to make a profit to survive, but what are their reasons for being in business? Do they want to create the highest quality product possible, or will they skimp and save by purchasing substandard ingredients? Do they treat their grower partners with respect and pay a fair price for their fruit, or do they take their grower partners for granted and insist on lower prices for their fruit? Even if I could get away with charging $12 for a jar of my Prairie Cherry jam, ethically I wouldn’t be able to go through with that kind of exploitation.

One benefit from buying from local producers is that you can meet with them, and see for yourself what drives them to be in the business. You may find that once you understand the challenges they face, you won’t give a second thought to paying an extra dollar for a jar of organic jam.