Why Organic Food is So Expensive

In recent years I’ve become increasingly frustrated with the willful blindness of the food movement to the fact that organic food is produced by profit-making entities.

Organic food has to be expensive, say the foodies. It’s more labor-intensive! It doesn’t use pesticides! It’s made in small batches!

These sound suspiciously like rationalizations to me. I have no doubt that the production costs of organic food are higher than non-organic food, but that’s not an explanation for why the retail price is up to three times higher.

Retail prices are only related to production costs up to a certain point. An iPhone costs about $170 to make. Apple charges you $650 to buy one not because this has some quantitative relationship to the production cost, but because the company has calculated that this is the highest price the greatest number of people are likely to pay. Any less than that, and the company would earn less profit. Any more than that, and the company would sell fewer units.

The price of a product is based on profitability and demand, not cost. As soon as the price is above $170.01, how much it costs to make is irrelevant to how much it costs to buy.

I hate to break it to everyone who takes healthy eating seriously (myself included), but there is no reason to believe organic food is the only sector of our economy that is immune to this reality.

A free range chicken at Whole Foods is $3.99/lb. At Safeway, it’s $0.89/lb. I’m sure it costs more to produce a chicken that’s free-range, no-GMO, gluten-free, dolphin-safe, etc. But you’re not gonna convince me that those two chickens are equally profitable for the retailer.

Or check out peanut butter: $0.24 per ounce for normal (‘natural’, even!), $0.44 per ounce for organic. Again, I’m sure organic peanuts are more expensive to produce than normal (natural!) ones. But seven bucks for a jar of peanut butter is just fucking hella, and the company that makes it is just as profit-seeking as McDonald’s or Nike or Halliburton or any other.

No one defends their Lexus by saying ‘Well, it cost more to make’. We accept that it’s a luxury good whose price is determined by a standard demand curve. A Lexus costs $80,000 because that is how much people are willing to pay. That jar of peanut butter costs $7 for the same reason.

In the context of our current food system, Whole Foods and other organic food producers and retailers are providing luxury goods. A whole chicken costs $12 not because it was raised on foie gras and asparagus tips, or allowed to roam freely and pursue its life’s dreams. It costs $12 because that is highest possible price the company can charge before demand starts to taper off.

Admitting you have a problem is the first step toward solving it. We need to acknowledge that organic companies are just another facet of Big Food, and aim our advocacy efforts toward universal sustainability standards (if pesticides are so harmful, why can they be used at all?).

Otherwise, we haven’t improved the food system. We’ve just added a Lexus to every meal.

6 Comments

Filed under America, Food, Serious

6 responses to “Why Organic Food is So Expensive

  1. elephantwoman

    A friend of mine calls organic food (and its like) “white nonsense”.

  2. I’ve been trying to tell this to people for a long time but the problem is that I am a chemist, so people always think I’m like an advocate for Monsanto! Everything is bussiness, models based on ‘organic’ thinking will colapse due to the same reasons why other bubbles collapse, too many people gets freaked out so they buy and they buy a lot!
    Congratulations, great post!

  3. FCH

    Buying local is way more important that buying organic. And I do think that my local farmer, providing a living wage to her employees (including a modicum of health care), needs way more money to make that happen than a large corporation — be they organic or not.

  4. I think its important to distinguish between the producer’s position and the retailer’s. in the case of supermarket giants, these squeeze the hell out of producers, but then charge what the market will bear. Result: huge profit for the retailer, not the producer.

  5. On the local and the retailer tip, if you’re shopping at Whole Foods you either live in a sterile city or need to get your shoes dirty in smaller grocers. The nice nondescript place that smells like rotten soybeans will have organic and ‘conventional’ goods. The organics will be more expensive than the conventional but will be half what you’d pay in some name brand chain.

    And if you’re buying Morning Star or their manufactured meat envy equivalents you’re not doing the planet or yourself any favors.

  6. Pingback: deconstructing complexes regarding buying local and rebuilding | thatguysuarez

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