Organic Food

Premium Prices and Uncertain Benefits

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Organic food sales have gone through the roof. It’s no wonder. It’s widely believed that organic foods are more nutritious and safer than non-organic — they’re even said to fight cancer — even though the evidence is far from clear. Consumers have been paying a lot to eat organic; food certified as organic sometimes costs twice as much as conventional products. The premium prices may not be buying everything that’s promised.

The Situation

About three-quarters of grocers in the U.S. sell organic food, including specialty markets, like Sprouts, and mass-market retailers, like Wal-Mart and Target. While that’s only 4 percent of total food sales, demand in the U.S. and Europe is growing. The trend is driven both by rising interest in locally grown food — more than 80 percent of farmers markets sell organic food — and fears about food safety. Roughly 48 million Americans every year become sick and 3,000 die from foodborne diseases. To be labeled organic, the U.S. Department of Agriculture says food must be grown without synthetic fertilizers and must be free of genetically modified organisms; meat must be raised without antibiotics and growth hormones and the animals must have access to the outdoors. There are similar standards in the European Union and Japan. In China, demand for organic food is skyrocketing after a series of scandals over tainted food has consumers willing to pay double for organic kale and other items.

Source: Catherine Greene for the USDA
Source: Catherine Greene for the USDA

The Background

Until the invention of chemical fertilizers and pesticides, all agriculture was organic. Sulfuric acid was first used to extract phosphate from bones and rock for use as fertilizer in the mid-1800s. Poison gas research in World War I led to bug-killing nerve gases, including sarin and DDT, which was so effective at killing malaria-carrying mosquitoes it won its inventor a Nobel Prize. After Rachel Carson’s book “Silent Spring” documented the dangers of DDT, the chemical was banned for use as a pesticide in the U.S. in 1972. In the 1970s, the first industrial-scale animal farms in the U.S. began popping up, first for egg production, later for pigs and cattle. Yields increased, but so did worries: These animals are often treated with antibiotics and consumption of the meat has led to more drug-resistant infections in humans. Health-food stores began appearing in the 1960s; New Age Natural Foods, opened in San Francisco in 1965. In 1990, after the USDA passed the Organic Foods Production Act to develop national standards, organic products became more common. Mainstream grocery chains started their own lines of organic food, while large foodmakers began snapping up smaller organic startups. Coca-Cola bought juice and bar maker Odwalla in 2001; Stonyfield Farm, an organic dairy producer, became a subsidiary of Danone in 2004; and Kellogg purchased Bear Naked in 2007.

The Argument

Proponents say that organic produce has more nutrients, including antioxidants and vitamins that may prevent or delay cell damage, than conventionally grown fruits and vegetables. They also argue that eating organic produce and meat reduces diners’ exposure to toxic chemicals, such as pesticides and fertilizers, that may increase the risks of certain types of cancer. Eating organic can also help the environment by supporting farms that send less toxic runoff into water and soil. The industry is trying to shake its “whole paycheck” reputation, a play on Whole Foods, the organics-heavy grocery chain known for high prices. But the commercial appeal is clear, so non-organics often try to piggyback on the organic reputation by using labels like “all-natural” or “local,” though these can contain pesticides and chemicals. Just because food is organic doesn’t mean that it won’t make people sick, and fertilizing crops with improperly composted manure can result in E. coli contamination. Some say eating organic food doesn’t improve health. In fact, plenty of foods labeled organic aren’t inherently healthy. (Organic gummy bears?) Nutrition aside, one thing organic foods have going for them is popular opinion — 41 percent of Americans say organic tastes better than non-organic.

The Reference Shelf

  • U.S. Department of Agriculture overview of the organic food market.
  • The International Federation of Organic Agriculture Movements’ guide to global organic agriculture.
  • The Mayo Clinic weighs in on whether organics are safer and more nutritious than conventionally-grown food.
  • The Dirty Dozen list of foods with the highest amounts of pesticides, including apples and strawberries.
  • Bloomberg Best (and Worst) tracks countries with the most organic farmland.

First Published August 18, 2014

To contact the writer of this QuickTake:

Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this QuickTake:

Anne Cronin at acronin14@bloomberg.net