Investigating Retail Price Premiums for Organic Foods

Retail price premiums for selected organic foods, 2010 chart

The Economic Research Service used grocery store purchase data to estimate retail price premiums for 17 commonly purchased organic foods relative to their nonorganic counterparts from 2004 to 2010.

This post is part of the Science Tuesday feature series on the USDA blog. Check back each week as we showcase stories and news from USDA’s rich science and research portfolio.

Consumer demand for organically produced goods has shown double-digit growth during most years since the 1990s, according to industry statistics, providing market incentives for U.S. farmers across a broad range of products. Consumers can now purchase organic food at nearly three out of four conventional grocery stores. These products generally carry a price that reflects the additional costs of producing organic foods and of keeping products segregated throughout the supply chain. The price premiums reflect these costs as well as consumers’ willingness to pay more for organic products.

A new Economic Research Service report provides estimated retail price premiums—and changes in premiums—for 17 commonly purchased organic foods relative to their nonorganic counterparts from 2004 to 2010. We used grocery store purchase data from a large set of nationally representative households. The data included detailed information on each product (degree of processing, flavor, package size, and whether organic), its price, and where it was purchased, allowing us to isolate the organic price premium.

Our analysis, unique in number of years and products examined, found that organic price premiums in 2010 were more than 20 percent of the nonorganic price for all but 1 (fresh spinach) of the 17 products. Milk and eggs had the highest premiums—72 percent of the nonorganic price for milk and 82 percent for eggs. Organic eggs and dairy products have high production costs since chickens and cows must be given organic feed, have access to the outside, and be free of hormones and antibiotics. Demand for organic foods fed to children, such as milk and baby food, may also play a role in the price premium level. Among organic fresh fruits and vegetables, premiums in 2010 ranged from just 7 percent for fresh spinach to 60 percent for salad mix. For organic processed foods that year, price premiums ranged from 22 percent for granola to 54 percent for canned beans.

Most organic price premiums fluctuated over the 7-year study period. Premiums for organic baby food ranged from 18 to 53 percent above the nonorganic price, while premiums for apples were between 29 and 44 percent. Organic eggs displayed the largest fluctuations in price premiums—between 66 and 173 percent.

More information on organic price premiums—and on the growth in sales of organic products—is in our report, Changes in Retail Organic Price Premiums from 2004 to 2010.

Knitting Together Treasured Landscapes with the Forest Legacy Program

Gopher Tortoise

Gopher Tortoise. Photo by Dirk Stevenson of the Orianne Society.

Did you know the Forest Legacy Program is the only federal grant program focused on the permanent protection of important private forestland, conserving over 2.5 million acres to date?

This incentive-based and voluntary program managed by the U.S. Forest Service conserves working forests and environmental benefits for communities. It does this through land acquisition and conveyance to state management as well as through the establishment of conservation easements that allow families to maintain ownership of their land.

Forest Service researchers estimate that nearly 600,000 acres of forest are lost to development every year, with similar trends projected into the future. As demographic, commercial and climate change pressures intensify and threaten the integrity of some of the nation’s most treasured landscapes, the U.S. Forest Service has consistently supported efforts to assist and empower private landowners to conserve private lands.

One of these efforts is the Land and Water Conservation Fund (LWCF), which is funded through earnings from offshore oil and gas leasing royalties.

The LWCF expired last fall, but this Spring Congress reauthorized the fund with $450 million to continue this important work in coming years. With these and other funds, the Forest Service has been able to provide $100 million for 20 proposed projects across the country in 2017. These projects help families and communities preserve private forests while protecting and knitting together intact landscapes.

Selected projects are frequently championed by local communities that recognize the potential of this program to conserve not only the land and its resources, but the cultural identity that defines their landscapes.

One great example of what can happen when people utilize this program is the Lentile Longleaf Pine Tract in Georgia. This locally-driven work to protect a significant contiguous longleaf pine tract will secure the largest gopher tortoise tract in the state that includes over 1,800 acres of forested wetlands and cypress ponds, and provides the region with the many other benefits forests provide. Protected by land acquisition of over 7,000 acres of working forestland, the tract will buffer against imminent agricultural development that has fragmented wildlife habitat through much of the state.

Why I’m Here: Combining Passions for Forests and Communications

By Lindsay Seventko, Communications Intern

Lindsay SeventkoAs I began searching for an internship nearly six months ago, I struggled to find an opportunity that seemed well-rounded in potential experiences. I kept comparing what one particular friend told me about his internship, David May, who was American Forests’ Communications Intern in summer 2015, with what I had heard from other people.

His experience of actually contributing real work by creating content for the website and magazine, and aiding the communications department in all areas of the organization, contrasted strongly with other stories of months of filing paperwork and making coffee. I wanted a similar opportunity to gain real experience and develop new skills, especially in a way that combined communications and marketing with forest conservation.

Growing up in a congested New York suburb, I always cherished family getaways to the Adirondacks, one of the most well protected state parks in the country. There, I learned to love the richness of forests and always wanted a “professional wilderness explorer” job.

As I’ve grown up, I’ve remained passionate about forest conservation and environmental issues, but my interests have also evolved to include marketing and communications. Thus, I’m excited for this internship to be a blending of the two — an experience in communicating the science of forests and trees in a creative, and simple, way and an opportunity to aid the conservation, education and policy efforts of American Forests.

Congratulations to our friends at NIACS!

This past Friday (June 10) the US Forest Service was named as the first ever recipient of the Climate Adaption Leadership Award for Natural Resources!  We at Climate, Forests and Woodlands want to give a shout out to the Northern Institute of Applied Climate Science (NIACS), which was specifically named as an award recipient. NIACS is part of the Northern Research Station and is incorporating climate vulnerability into over 185 forest management projects across the Midwest, Central Appalachians and the Northeast.

PA Forest_CC
Old growth hemlock in the Susquehannock State Forest, PA by Tonelli is licensed under CC by 2.0.

We know what great work they do as we have seen their webinars, read their reports, participated in one of their online adaptation trainings, and shared their research-based knowledge with our readers.  A good chunk of the country is covered by their Climate Change Response Framework which “provides an integrated set of tools, partnerships, and actions to support climate-informed conservation and forest management”.   Some of the most productive and innovative work related to climate and natural resource management is being done by NIACS.  Check them out!

Trade Agreements Key to Oregon Winemaker’s Success

Cristom wine bottles on a shelf

Cristom wine bottles on a shelf. Photo courtesy of Cristom Vineyards.

Exports are vital to the growth of U.S. agriculture. Since 2000, around 20 percent of annual agricultural production in the United States has been exported. Still, it’s difficult to conceptualize the real impact of free trade agreements until you talk to the people who have directly benefitted from them. In April, I had the pleasure of meeting with a group of winegrowers from Oregon – among them Tom Gerrie, president of Cristom Vineyards in Salem, who was kind enough to share with me his personal experience in exporting.

Cristom Vineyards is a family-run craft winery producing around 15,000 cases of wine per year. Founded in 1992 by Gerrie’s father, Paul, the company decided that in order to build global brand recognition of Oregon’s fine wines, it would need to target high-end restaurants both in the United States and abroad. In 1994, it shipped its first cases to New York, Chicago, London and Tokyo. Since then, Cristom Vineyards has expanded its exports to 48 states and 18 countries, including South Korea. More than 15 percent of Cristom’s total sales now come from exports.

Gerrie notes that exporting is not easy, but that free trade agreements have helped immensely. As a wine exporter, he constantly grapples with concerns over payment terms, shipping costs, storage conditions and, most notably, the need to discount wines to remain competitive in countries with high tariff rates. This was particularly true in South Korea, where his products faced a 15-percent tariff. But the U.S.-Korea Trade Agreement (KORUS), which entered into force in 2012, reduced those tariffs to zero. Yes, zero.

As a result, Cristom Vineyards saw a 300-percent leap in sales to South Korea. And not only did the tariff elimination improve sales, it also allowed Cristom to capture market share from competitors in Australia, New Zealand, Chile and South Africa, which are still subject to the 15-percent tariff. The tariff elimination also enabled Cristom to begin selling its higher-end wines in Korea, which previously had been cost-prohibitive. This has further enhanced the Cristom brand in Korea and helped increase demand for all the wines it sells there.

Following Cristom’s success in South Korea, Gerrie is now looking to expand elsewhere in Asia. For this reason, he is supportive of trade agreements such as Trans-Pacific Partnership (TPP). Under the TPP, tariffs on wine products will be eliminated by all member countries. This means that Japan’s tariff of 15 percent and Vietnam’s tariffs – which range as high as 35 percent – will come down to zero. TPP also contains a special annex for wine and spirits labelling which guarantees that U.S. wine companies will not have their exports discriminated against because they use words like “chateau,” “reserve,” “classic” or “vintage,” which some other countries have tried to claim for themselves.

For Cristom Vineyards, these tariff reductions and labelling agreements have a real impact on the company’s bottom line. The removal of a tariff can make the difference between breaking into a new market and standing on the outside looking in. Furthermore, in the absence of agreements like the TPP, U.S. wine exporters face a clear disadvantage against competitors from Australia and Chile that already receive preferential treatment in markets such as Japan. Failing to ratify the TPP means Cristom Vineyards and countless other producers would lose potential sales in lucrative overseas markets. We must do everything we can to ensure that our exporters are best positioned to succeed in the global marketplace – and entering into, and enforcing, free trade agreements is a key part of that effort.

For more information about the TPP and its benefits to U.S. agriculture, visit www.fas.usda.gov/tpp.

Forest Digest – Week of June 6, 2016

Find out the latest in forest news in this week’s Forest Digest! foggy forest

Capturing the Beauty of Trees in Our Cities

We know we need forests — they provide a myriad of benefits that we simply can’t live without. But, urban forests are equally important in many respects! The trees within our cities not only provide health and economic benefits to residents, but they simply making city living a bit more beautiful. Below is a collection of photographs by Chuck Fazio, our Artist-in-Residence, taken in urban cities. Sometimes, it’s nice to simply stop…and take in the beauty that trees provide in the backdrop of urban living.

tree-lined street

Fountain in park

Charleston square

Trees in city

People on tree-lined street

Neighborhood with trees

tree-lined corner

Celebrating Food and Culinary Connections: Schools Serve up California-grown Food on “California Thursdays”

The “California Wrap”

The “California Wrap” was served at many districts across Contra Costa County, a strategy that allows them to purchase collectively on California Thursdays.

June is National Fresh Fruit and Vegetable Month! To celebrate this, we’re showcasing the important work of California Thursdays, a collaboration between the Center for Ecoliteracy and a network of public school districts to serve healthy, freshly prepared school meals made from California-grown food. The following guest blog also highlights the inspiring work of the Center for Ecoliteracy, a partner with USDA’s national sodium reduction in schools-initiative, What’s Shaking? Creative Ways to Boost Flavor with Less Sodium.

By Jennifer Gerard, R.D., Center for Ecoliteracy, California Food for California Kids Program Director

What’s your favorite day of the week? For many students in California — it’s Thursday.

On Thursdays, over 1.7 million students in schools that participate in the California Thursdays program know they’ll be offered a lunch freshly prepared from California ingredients. California Thursdays is a celebration of local food, the people who produce and prepare it, and the significant connections that exist between children, food, and their environment.

California Thursdays is also a powerful tool to increase consumption of fresh fruits and vegetables, stimulate local economies, and decrease the transportation required for distribution — decreasing emissions and increasing freshness.

California Thursdays is led by the Center for Ecoliteracy, a not-for-profit which provides support, inspiration, and resources for the program. Participating school districts adopt the California Thursdays program in their own brilliant and unique ways — as you’ll see in two stories below.

Encinitas Union School District’s Farm Lab

Encinitas Union School District’s Farm Lab is a ten-acre farm and interactive learning center providing educational retreats for students and locally grown produce for school cafeterias.

Encinitas Union School District (EUSD) has taken the farm to school movement literally — by building a farm on district property. The Farm Lab serves as both an outdoor education site and a production farm — providing the district’s cafeterias with locally grown lettuces, herbs, zucchini, snap peas, celery, melons, and up to 300 pounds of tomatoes per week during peak season. While much of the harvest occurs in summer when school is out, the Child Nutrition Services team doesn’t miss a beat. They roast tomatoes, shred zucchini (with their industrial cheese grater), and freeze both for a marinara sauce to serve when students return. Herbs such as oregano, basil, and rosemary are dried over the course of several weeks, utilizing repurposed wire food-transport racks lined with parchment paper. Once dried, the herbs are coarsely ground and stored in airtight containers for use in pizza and marinara sauce. Through processes like these, EUSD is able to prepare a delicious, meaningful meal that exceeds USDA nutrition requirements for school meals and inspires change in the conventional school food system.

A tomato harvest from Farm Lab

A bountiful tomato harvest from Farm Lab, soon to become marinara sauce and devoured by students.

Pittsburg Unified School District (PUSD) and six neighboring school districts in Contra Costa County saw their California Thursdays kick-off in April of 2015, as the perfect opportunity to combine their purchasing power. They agreed to carry similar salad bar options and many served identical entrées, including a “California Wrap” made with California lavash (which is lower in sodium than traditional tortillas), deli turkey, and cheese. For just one day, their efforts translated in purchases of over 4,000 pounds of local produce, including 1,800 pounds of asparagus bought directly from a grower cooperative. “The coolest part,” reflects Sarah Hanson of the California Department of Food and Agriculture (CDFA) “was seeing how the directors worked together and exchanged recipes…and convinced each other that it was okay to serve things like asparagus!” CDFA assisted the group with organizational support and sourcing. The group plans on continuing to collectively purchase seasonal produce in the 2016–17 school year for use in their California Thursdays meals. The effort of these harmonious school districts, guided by a statewide movement, has the potential to invest $1.2 million in Contra Costa and nearby counties and shift the landscape towards a more fruitful future for farmers and students.

A salad bar at Antioch Unified School District

A salad bar at Antioch Unified School District, in Contra Costa County, showcases the abundance of California and the celebration of California Thursdays.

For now, California Thursdays is a stepping stone to exemplary school meal programs that connect classrooms, cafeterias, and farms statewide. Maybe someday, every day will be a California Thursday.

For more information on California Thursdays, recipes featuring California foods for schools and families, and garden-based curriculum materials, visit www.californiathursdays.org.

Jennifer McNeil, Encinitas Union School District’s Director of Nutrition Services

Jennifer McNeil, Encinitas Union School District’s Director of Nutrition Services, displays the delicious lettuce varieties grown by Farm Lab and served on the district’s salad bars.

Local Food – Cooking Up Creative & Fresh Ideas for Healthy Communities

Columbia Heights Farmers Market shoppers

Columbia Heights Farmers Market shoppers enjoy locally-produced food. USDA’s Agricultural Marketing Service (AMS) grants are helping farmers markets implement creative programs to support local food producers and build healthy communities. Photo courtesy Mr T in DC.

Nutritional classes, purple beets, basil pesto and dark roast coffee – it’s not your father’s farmers market.  The entire local food system is maturing and farmers markets are offering more and more community-focused services. Many farmers markets now give their customers a chance to learn about locally-produced foods, in addition to buying and consuming them.

USDA is a proud partner and supporter of local and regional food systems through our programs, grants and technical services. USDA’s Agricultural Marketing Service (AMS) grants are helping farmers markets implement creative programs to support local food producers and build healthy communities. One example of an AMS grant success story is Community Foodworks, which manages the Columbia Heights Farmers Market and six other markets across Washington, DC, and Northern Virginia.

Leveraging a Farmers Market Promotion Program grant, Foodworks established a new Wednesday evening farmers market to increase access to locally produced food in the Columbia Heights neighborhood. The program included “Bonus Bucks” to give shoppers who use Federal food benefits (SNAP, WIC, Senior FMNP) more purchasing power.

The grant also helped Foodworks to develop a mixed-income CSA program – a weekly share from the market’s producers with options for individual or family-sized shares or a subsidized family-sized share for SNAP customers. The new market had a real impact on the community:

  • Over half of the customers reported eating more vegetables since the market opened (54 percent)
  • A majority of market visitors reported the Bonus Bucks program was the main reason they shopped at the market (72 percent)
  • Most customers agreed that spending their benefits at the market was easy (89 percent)

In addition to their farmers market efforts, Foodworks offers other creative programs to help support the community.  In partnership with another local social service organization, Foodworks is able to provide fresh, local food home delivery services for seniors. They serve as a site for USDA summer meals, distributing 3-4 dozen snacks to hungry children at their two weekday markets. They also offer community educational classes on nutrition, obesity, and diabetes intervention. In the fall of 2015, Foodworks piloted a new Veterans Vegetable Prescription Program to distribute weekly fruit and vegetable vouchers to eligible Veterans, seeing a redemption rate of 42 percent.

These are great innovations and partnerships leveraged by Foodworks.  As we continue to support the marketing and distribution of locally produced foods for U.S. farmers and ranchers, we look to see more impacts resulting from our investments.  Under this Administration, USDA has invested more than $1 billion in over 40,000 local and regional food businesses and infrastructure projects.

These activities contribute to USDA’s Know Your Farmer, Know Your Food (KYF2) initiative, which coordinates efforts across USDA. Our recently-revamped website provides USDA resources for every point in the local food supply chain, including grants, loans, and other instructional guides.  Additionally, the KYF2 Compass maps local and regional food system investments across the country.

More information on how USDA investments are connecting producers with consumers and expanding rural economic opportunities is available in Chapter IV of USDA Results on Medium.

Columbia Heights Farmers Market

“The growth of Community Foodworks and our essential programs couldn't be possible without opportunities like the Farmers Market Promotion Program from AMS,” said Nick Stavely, Community Foodworks Farmers Market & Incentives Program Manager. “We're thankful for the role that the AMS grants played in the organization's expansion and program development.” Photo of Columbia Heights Farmers Market courtesy Mr T in DC.

USDA Builds Communities with Lenders

Rural families become homeowners

Rural families become homeowners. Click to enlarge.

It’s been 25 years since USDA guaranteed the first home loan in Donalsonville, Georgia. The home itself was a modest spot nestled into the tiny little village in rural Georgia. To an outsider this home may look non-descript, but to the family who moved in 25 years ago, owning this home was a dream that seemed impossible before they found out USDA and their small town lender could work together to make their dream become reality.

25 years later, USDA has worked with thousands of lenders big and small to help 1.48 million families just like the first in Donalsonville buy modest homes in rural America. USDA Home Loan Guarantees are so important to hard working folks who want to settle down in rural areas. This program is the golden example of the private and public sectors coming together to make this opportunities for a better life accessible for all.

The need for this private-public collaboration is still great across the nation. The program itself has grown exponentially since we made that first guarantee. In 1991 USDA helped 633 families realize their dreams of homeownership; just last year we guaranteed 132,967 home loans made by more than 2,800 lenders across the country.

In perspective, that’s 132,967 kitchens to cook family meals in, 132,967 living rooms where families can laugh and be together, 132,967 dining room tables for kids to do their homework, 132,967 opportunities to build household wealth, start a business, or fund education. 132,967 dreams realized just in 2015.

I couldn’t be more proud to say that since 2009, USDA and our lender friends have helped 1 million families access the opportunity to buy their own home in rural America.

Thank you to the thousands of lenders across the country who have made each one of these successes happen in the last 8 years. We are building rural communities together one home loan at a time.