If you shop organic, you may be paying a pretty penny these days.
That’s a key finding in a new report by LendingTree that analyzed pricing data from the U.S. Department of Agriculture. The report noted that while inflation has resulted in price increases in many conventional food items over the past year, the hikes for their organic equivalents have often been more significant.
Consider: Organic strawberries have more than tripled in price, increasing by 224.4%, while conventional ones have seen a more measured (though not insignificant) price hike of 22.6%. And organic vine-ripe tomatoes have doubled in price, while conventional ones have gone up by 18.6%.
Perhaps more remarkable: In some cases, prices have declined for conventional items, even as they have surged for organic ones. A dramatic case in point: conventional chicken legs have dropped in price by 42%, while the price of organic chicken legs has increased by 67%. And conventional kale prices have dropped by 10%, while organic kale has shot up 80%.
As the LendingTree report stated, “Eggs may be the new luxury status symbol at the grocery-store checkout line, but they’re not the only product with a rising price tag.”
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Why should buyers of organic food be feeling the pinch more intensely? It has to do with the size and scope of organic farms and food companies, according to Phil Lempert, editor of SupermarketGuru.com, a website that covers the grocery business.
Lempert noted that organic businesses are usually much smaller by virtue of their specialized nature. That means they don’t have the same ability to negotiate costs for everything from supplies (an example: chicken feed) to shipping as their large conventional counterparts.
Of course, that holds true even in noninflationary times and contributes to making organic items more expensive in general. But when inflation or supply-chain issues hit, small businesses are all the more vulnerable, Lempert said. And, ultimately, they pass on the costs to the consumer. “If you’re a big company, you can absorb more,” he said.
Another issue: Organic farms have been challenged by weather and virus issues recently, according to Matt Seeley, chief executive of the Organic Produce Network, an organization that supports and provides information about the industry. And, by their very nature, organic farms can’t use pesticides to combat problems that arise, resulting in smaller yields. In the end, consumers pay the price for that, Seeley said.
But, given the price hikes among organic products, will some consumers decide to opt for conventional ones instead?
“We’re already seeing that trade-off,” Seeley said.
Indeed, the Organic Produce Network’s annual industry report noted sales declines in 2022 for such organic items as lettuce (down 12.7%), celery (down 2.3%) and bell peppers (down 2.1%).
Still, Seeley said, there’s been a shift over the last two decades in which organic items have increasingly become part of the U.S. dietary mainstream, taking up more and more space on supermarket shelves. In the long run, he doesn’t see that trend reversing. “Organic has an extremely bright future,” he said.
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This article was originally published by Marketwatch.com. Read the original article here.