Organic Produce Premiums Under Pressure: North American Organic Produce Update

Driven by consumer and retailer-centric demand forces and regulatory pressures that favor organic production, we expect organic produce production to continue to increase, and for long-run opportunities to continue to exist in the space. Growers will have to continue to adapt to effectively take advantage of changes in the market.

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“It is imperative that producers continue to adapt their production strategies,” says Roland Fumasi, Senior Analyst Fresh Produce. “Organic produce availability has now become mainstream, which means that the organic produce market will continue to more closely resemble the traditionally-grown produce market. In short, price strength – or weakness – has/will become most heavily influenced by supply-side gaps and gluts. Technological advances and continued changes/improvements in production practices/knowledge will help ensure long-run profitability for adaptive suppliers. Figuring out how to produce organically, at a unit cost that is similar to conventional production, is the evasive, but long-run goal.”