Changes in Retail Organic Price Premiums from 2004 to 2010

Organic foods are one of the most rapidly growing sectors of the retail food market. This study applies a hedonic model to 2004-10 Nielsen Homescan data to estimate the organic price premiums for 17 products. Eggs and dairy products generally have the highest premiums, while fresh produce has the widest spread of premiums (ranging from 7 percent of the nonorganic price for spinach to 60 percent for salad mix). Processed food premiums range from 22 percent for granola to 54 percent for canned beans. The strong organic premiums, combined with increased sales, suggest that there is continued room for growth in the organic supply.