New Year sparks organic demand

01/24/2014 03:16:00 PM
Tom Karst

Organic produce marketers reported generally strong demand and firm prices in January, and some believe the active market is partly related to new years’ resolutions.

“We definitely see a bump in January in demand,” said Jon Steffy, director of sales with Four Seasons Produce, Ephrata, Penn., and author of the Organicproducegeek.com blog.

While there may be various factors that contributed to the uptick, Steffy said he believes the biggest factor is that people start the new year ready to eat more fruits and vegetables.

“Maybe they got a juicer over the Christmas holidays and you start doing that for a few weeks and suddenly you are buying a lot of produce,” he said.

Many consumers also associate organic with eating better, Steffy said.

The net result is a spike in demand at the same time weather and other supply factors can limit supply, Steffy said.

“Things get really exaggerated but we see it start to level off in late January and slide back into more of a normal stance in February.”

Not all organic prices were above year-ago levels, but apples, cucumbers, grapes, strawberries and avocados were among the items with higher average terminal market prices compared to year-ago levels in mid-January. Prices for organic broccoli, carrots, and romaine came in below year-ago levels.

Organic fresh produce items can reap the benefit of new-year resolutions by consumers, said Earl Herrick, owner of Earl’s Organic Produce, San Francisco, but weather is also a big factor in the organic market. He noted California’s freezing weather also clipped supply of organic citrus this year.

Organic citrus prices showed mixed trends with average terminal market prices of clementines at $61.50 per carton in mid-January, up about $1.50 per carton from the same time last year. Organic orange prices were $36.50 per carton in mid-January, down from $52 per carton in mid-January last year, when six nights of freezing weather in California drove up citrus prices dramatically.

Herrick said his company, now in its 26th year of selling organic produce, experienced growth of 15% in 2013. Rising sales of organic fresh produce can’t be attributed to any one factor, but growth is evident across all commodities and customers, he said. Home and office delivery of organic fresh produce is a growing category, he said. Herrick said the increase in juice companies that use both organic and conventional produce adds steady sales gains to the category, he said.

Steffy of Four Seasons believes organic demand is continuing to grow, estimating sales at natural food stores are growing more than 10% yearly.

Growth mode

Organic citrus suppliers — both of navels and varietals — in freeze-hit areas of California lost 30% to 50% of their supplies, Steffy said.

While the marketing space for some organic commodities is becoming limited because of greater supply, Herrick said there is still very strong demand for organic mandarins and other niche citrus varieties.

Marketers said organic apples — sold from storage from Washington state and British Columbia until Argentina apple imports begin in March — are a very hot item.

“There is just not enough supply out there to meet demand, and it made prices really spike at the wholesale level,” Steffy said.

Strong demand and insufficient supply characterized the organic apple market in Washington, said Brianna Shales, communications manager for Stemilt Growers, Wenatchee, Wash.

Shales said the company can’t really push organic promotions because of limited supplies. She said high returns for organic apples and pears may spur more growers to consider transitioning orchards to organic production.

The average terminal market price for fuji organic apples from Washington was $57 per carton in mid-January, up from about $43 per carton the same time in 2013. The average f.o.b. price per carton for organic apples (all varieties) was $38 per carton in mid-January this year, up from an average of just $31 per carton last year at the same time.



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A. Mac    
January, 27, 2014 at 10:23 AM

Thanks for the article Tom. I hope this trend continues. I'd like to suggest another product to keep a look out for. Freshana Organic Solutions. Keep in mind it's just as important what you use in your environment as what you put in your body. Buy some organic cucumbers and we'll provide the organic cleaners. Let's work together to make them both our bodies and environment as chemical and toxin free as possible and stem the tide of out of control chemicals and toxins. Regards, http://FreshanaOrganic.com

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