Organic food has a substantial markup over conventional food, and always has, but that comes with a higher price for certification and production. A new study from researchers at Washington State University indicates that all the extra money and effort works out, and that organic farming is, at the moment, more profitable than conventional farming.
The study, published in the Proceedings of the National Academy of Sciences (commonly shortened to PNAS), is the first wide-ranging study to look at the profitability of organic farming in the real world. That’s more complex than it sounds; a major tenet of organic farming is to care for the soil and the nutrients in it, which means organic farmers typically rotate crops so as to not drain the soil of any particular nutrient. That leads to totally different yields and, in turn, profits, depending on what’s being grown each year. This study includes that data, and still finds that organic farming is worth the trouble, mostly.
Organic produce commands a price premium that has remained fairly stable over the 40 or so years that they have been on the market (though they’ve only been officially approved by the National Organic Program since 2000). In fact, the premium has varied only by a few percentage points, hovering generally around 30 percent higher than conventional produce. The yield of organic produce, though lower than conventional by about 18 percent, still has plenty of room for prices to drop before the math no longer works.
And sales show no sign of slowing down; though organics still represent a very tiny slice of the overall produce pie (yum!), the category is growing rapidly. On the other hand, the process of who actually gets to decide what qualifies as organic – a billion-dollar question if there ever was one – has recently been criticized.
Still, it’s a good sign for organic proponents. The study may not discuss the environmental impact of organic farming, but it does provide a much more ironclad reason for farmers to pursue it: the almighty dollar.
Image via Flickr user torbakhopper