Hostname: page-component-586b7cd67f-rcrh6 Total loading time: 0 Render date: 2024-11-28T02:19:32.208Z Has data issue: false hasContentIssue false
  • English
  • Français

Organic premiums of US fresh produce

Published online by Cambridge University Press:  30 June 2008

Biing-Hwan Lin ,
Travis A. Smith  and
Chung L. Huang
Biing-Hwan Lin
Affiliation:
Economic Research Service, US Department of Agriculture, Room N2110, 1800 M Street NW, Washington, DC, 20036-5831, USA.
Travis A. Smith
Affiliation:
Department of Agricultural and Applied Economics, The University of Georgia, Athens, GA 30602-7509, USA.
Chung L. Huang*
Affiliation:
Department of Agricultural and Applied Economics, The University of Georgia, Athens, GA 30602-7509, USA.
*
*Corresponding author: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

The study uses the 2005 Nielsen Homescan panel data to estimate price premiums and discounts associated with product attributes, market factors, and consumer characteristics, focusing on the organic attribute for five major fresh fruits and five major fresh vegetables in the United States. The results suggest that the organic attribute commands a significant price premium, which varies greatly from 13 cents per pound for bananas to 86 cents per pound for strawberries among fresh fruits and from 13 cents per pound for onions to 50 cents per pound for peppers among fresh vegetables. In terms of percentages, the estimated organic price premiums vary from 20% above prices paid for conventional grapes to 42% for strawberries among fresh fruits and from 15% above prices paid for conventional carrots and tomatoes to 60% for potatoes. Furthermore, prices paid for fresh produce are found to vary by other product attributes, market factors, and household characteristics.

Keywords

fresh fruits and vegetableshedonic priceorganic produceorganic premiumproduct attributesNielsen Homescan
Type
Research Papers
Information
Renewable Agriculture and Food Systems , Volume 23 , Issue 3 , September 2008 , pp. 208 - 216
Copyright
Copyright © 2008 Cambridge University Press

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Dimitri, C. and Greene, C. 2002. Recent growth patterns in US organic foods market. Agricultural Information Bulletin No. 777. US Department of Agriculture, Economic Research Service, Washington, DC.Google Scholar
2 Organic Trade Association (OTA). 2006. The OTA 2006 Manufacturer Survey Overview. Available at Web site http://www.ota.com/pics/documents/short%20overview%20MMS.pdf (verified 6 August 2007).Google Scholar
3 Nutrition Business Journal (NBJ). 2004. The NBJ/SPINS Organic Foods Report 2004. Penton Media, Inc., Cleveland, OH.Google Scholar
4 Dimitri, C. and Oberholtzer, L. 2006. A brief retrospective on the US organic sector: 1997 and 2003. Crop Management. Available at Web site http://www.plantmanagementnetwork.org/pub/cm/symposium/organics/Dimitri/ (verified 6 August 2007).CrossRefGoogle Scholar
5 Whole Foods Market. 2005. Nearly two-thirds of Americans have tried organic foods and beverages. Available at Web site http://www.wholefoodsmarket.com/company/pr_11-18-05.html (verified 6 August 2007).Google Scholar
6 Giannakas, K. 2002. Information asymmetries and consumption decisions in organic food product markets. Canadian Journal of Agricultural Economics 50(1):35–50.CrossRefGoogle Scholar
7 Yiridoe, E.K., Bonti-Ankomah, S., and Martin, R.C. 2005. Comparison of consumer perceptions and preference toward organic versus conventionally produced foods: a review and update of the literature. Renewable Agriculture and Food Systems 20(4):193–205.CrossRefGoogle Scholar
8 Tregear, A., Dent, J.B., and McGregor, M.J. 1994. The demand for organically-grown produce. British Food Journal 96(4):21–25.CrossRefGoogle Scholar
9 Davies, A., Titterington, A.J., and Cochrane, C. 1995. Who buys organic food? A profile of the purchasers of organic food in Northern Ireland. British Food Journal 97(10):17–23.CrossRefGoogle Scholar
10 Roddy, G., Cowan, C., and Hutchinson, G. 1996. Consumer attitudes and behaviour to organic foods in Ireland. Journal of International Consumer Marketing 9(2):41–63.CrossRefGoogle Scholar
11 Thompson, G.D. and Kidwell, J. 1998. Explaining the choice of organic produce: cosmetic defects, prices, and consumer preferences. American Journal of Agricultural Economics 80(2):277–287.CrossRefGoogle Scholar
12 Govindasamy, R. and Italia, J. 1999. Predicting willingness-to-pay a premium for organically grown fresh produce. Journal of Food Distribution Research 30(2):44–53.Google Scholar
13 Goldman, B.J. and Clancy, K.L. 1991. A survey of organic produce purchases and related attitudes of food cooperative shoppers. American Journal of Alternative Agriculture 6(2):89–96.CrossRefGoogle Scholar
14 Boland, M. and Schroeder, T. 2002. Marginal value of quality attributes for natural and organic beef. Journal of Agricultural and Applied Economics 34(1):39–49.CrossRefGoogle Scholar
15 Loureiro, M.L. and Hine, S. 2002. Discovering niche markets: a comparison of consumer willingness to pay for local (Colorado grown), organic, and GMO-free products. Journal of Agricultural and Applied Economics 34(3):477–487.CrossRefGoogle Scholar
16 O'Donovan, P. and McCarthy, M. 2002. Irish consumer preference for organic meat. British Food Journal 104(3/4/5):353–370.CrossRefGoogle Scholar
17 Chang, H.-S. and Zepeda, L. 2005. Consumer perceptions and demand for organic food in Australia: focus group discussions. Renewable Agriculture and food Systems 20(3):155–167.CrossRefGoogle Scholar
18 Walnut Acres. 2001. Boom in organic foods and beverages fueled by food fears and by desire for healthier living. Available at Web site http://www.walnutacres.com/news_view.php?id=26 (verified 30 August 2007).Google Scholar
19 Nielsen, . 2007. Consumer panel solutions. Available at Web site http://www2.acnielsen.com/products/cps.shtml (verified 6 August 2007).Google Scholar
20 Lancaster, K. 1966. A new approach to consumer demand theory. Journal of Political Economics 74(2):132–157.CrossRefGoogle Scholar
21 Rosen, S. 1974. Hedonic prices and implicit markets: product differentiation in pure competition. Journal of Political Economics 82(1):34–55.CrossRefGoogle Scholar
22 Ladd, G.W. and Martin, M.B. 1976. Prices and demands for input characteristics. American Journal of Agricultural Economics 58(1):21–30.CrossRefGoogle Scholar
23 Ladd, G.W. and Suvannunt, V. 1976. A model of consumer goods characteristics. American Journal of Agricultural Economics 58(3):504–510.CrossRefGoogle Scholar
24 Palmquist, R.B. 1984. Estimating the demand for the characteristics of housing. Review of Economics and Statistics 66(3):394–404.CrossRefGoogle Scholar
25 Maguire, K.B., Owens, N., and Simon, N.B. 2004. The price premium for organic babyfood: a hedonic analysis. Journal of Agricultural Resource Economics 29(1):132–149.Google Scholar
26 Taylor, M.R. and Brester, G.W. 2005. Noncash income transfers and agricultural land values. Review of Agricultural Economics 27(4):526–541.CrossRefGoogle Scholar
27 Estes, E.A. and Smith, V.K. 1996. Price, quality, and pesticide related health risk considerations in fruit and vegetable purchase: an hedonic analysis of Tucson, Arizona supermarkets. Journal of Food Distribution Research 27(3):59–76.Google Scholar
28 Steiner, B.E. 2004. Australian wines in the British wine market: a hedonic price analysis. Agribusiness 20(3):287–307.CrossRefGoogle Scholar
29 Halvorsen, R. and Pollakowski, H.O. 1981. Choice of functional form for hedonic price equations. Journal of Urban Economics 10(1):37–49.CrossRefGoogle Scholar
30 Loureiro, M.L. and McCluskey, J.J. 2000. Assessing consumer response to protected geographical identification labeling. Agribusiness 16(3):309–320.3.0.CO;2-G>CrossRefGoogle Scholar
31 Brogan, D.J. 1997. Pitfalls of using standard statistical software packages for sample survey data. Available at Web site http://www.rti.org/sudaan/pdf_files/brogan.pdf (verified 6 August 2007).Google Scholar
32 StataCorp. 2005. Stata Statistical Software: Release 9. StataCorp LP, College Station, TX.Google Scholar
33 Wyman, J. and Diercks, S. 1992. Organic potatoes: they can be grown, but can they be profitable? Research Brief No. 4, University of Wisconsin-Madison. Available at Web site http://www.cias.wisc.edu/archives/1992/10/01/organic_potatoes_they_can_be_grown_but_can_they_be_profitable/index.php (verified 17 December 2007).Google Scholar
34 Lucier, G. and Jerardo, A. 2006. Vegetables and melons outlook. US Department of Agriculture, Economic Research Service. Available at Web site http://www.ers.usda.gov/publications/vgs/2006/02feb/vgs313.pdf (verified 6 August 2007).Google Scholar
35 Burden, D. 2006. Peppers profile. Agricultural Marketing Resource Center. Available at Web site http://www.agmrc.org/agmrc/commodity/vegetables/peppers/peppersprofile.htm (verified 6 August 2007).Google Scholar
36 USDA, ERS. 2007. Food CPI, prices and expenditures: foodservice as a share of food expenditures. Available at Web site http://www.ers.usda.gov/Briefing/CPIFoodAndExpenditures/Data/table12.htm (verified 20 August 2007).Google Scholar