Friday, July 1, 2011

Peak Organic

I was reading farmnwife's blog(@farmnwife on Twitter) and left a lengthy comment, as I tend to do at times.  I decided to post most of that comment since it was something I haven't really talked about here in any great detail.  No big drawn out intro, so if you're confused, leave a comment on here or find me on Twitter @samvance...

There is an economic tipping point that is in organic's future which will doom it, that I never hear anyone mention.  Basically, organic food started out costing about 75% more than conventional and as it became more popular, the prices dropped to about 40-50% more.  As more people use organic, the price will continue to drop until the price equals that of conventional foods.  Normally, this is where a business can finally start to compete and dominate the market, but we have to remember that organic is a more labor intensive choice to create a premium product.  Meaning that farmers really only grow it because it's more profitable. At the point where it costs more for the farmer to grow than conventional(meaning that they see less profit than conventional), they will stop growing organic and switch back to conventional.

This is the reason American beverage bottlers use HFCS primarily and Mexican beverage bottlers use cane sugar... not because of a difference on philosophy, but because HFCS is cheaper than cane sugar in this country due to some trade restrictions we put on Brazilian sugar.  Mexico doesn't have such restrictions, and thus, has cheaper sugar.

I'm not pro or anti-HFCS, I'm just using that as an analogy to explain what will eventually happen to organic food.