Organic almond, kiwifruit and winter pear handlers' views on federal marketing order programs

Abstract

Producers and handlers of organic crops covered by federal marketing orders have questioned the value received for programs financed by mandatory assessments on their products. This article highlights marketing issues and organic handlers' views on marketing orders for three crops, California kiwifruit, California almonds and Washington–Oregon winter pears. Case studies for these three crops combine results of a survey of organic handlers with available data on production and marketing for each organic product. Handlers gave their views on the effectiveness of marketing order provisions for mandatory minimum quality standards, research, supply control and advertising and promotion. The average per acre yield is lower for each organic commodity than for the same conventional commodity. On a per farm basis, the average organic almond and winter pear acreage is smaller than the industry average, while that of the organic kiwifruit grower is slightly larger. Marketing issues for the three organic crops are similar. Organic products tend to use different channels of distribution than do the same conventional products, because of the smaller volume of product and the product mix of retailers. Organic almonds, kiwifruit and winter pears have enjoyed premium prices, but the premium has decreased as organic production has increased. Some handlers report that customers for their organic products are becoming more quality conscious, and handlers have responded by selling smaller and lower-grade organic kiwifruit and winter pears as conventional fruit at conventional prices. Organic handlers for all three commodities tend to be supportive of marketing order provisions for minimum quality standards and research. Most organic almond handlers were opposed to their marketing order's reserve program, or could see little reason for its application to organic almonds, which have been in relatively short supply. Organic handlers’ views concerning generic advertising and promotion programs were mixed, but most handlers do not believe that these programs increase demand for the organic product.