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Increasing costs pressure organic banana growers and shippers

Supplies of organic bananas are in peak production currently.

“A storm and hurricane did impact farms in our growing areas. But thanks to being at peak production, there is a lot of fruit and we have been able to offset any storm damage as our farms have recovered,” says Mayra Velazquez de León of Organics Unlimited based in San Diego, CA.

Demand for organic bananas are coming from the U.S., Canada and Japan. 

Organics Unlimited’s primary farming operations are in Colima, Mexico along with a group of smaller family farmers in both Mexico and Ecuador. “These locations reliably provide our Organics Unlimited, GROW and Fair Trade Certified label organic Cavendish bananas year-round for the U.S., Canada and Japan, among other places,” says Velazquez de León. Meanwhile organic banana production is also coming from Peru.

On demand, the U.S., Canada and Japan are the markets where demand is coming from for organic bananas. “More and more people are going organic. It seems like more retail stores are looking to have organic options. So, the assumption is that consumption is going up,” says Velazquez de León.

Overall costs, including packaging, have gone up for organic bananas. 

Costs skyrocketing
As for pricing, while contracts have kept banana pricing in place, Velazquez de León notes that costs overall have gone up. “Packaging, supplies and transportation–you name it--everything has gone up quite a bit,” she says. “The cost of cardboard has increased 20 percent. Plastic, fuel, wood for pallets – there is a shortage on supplies.”

Add to this the already expensive proposition that is producing an organic banana. “Besides the extra cultural costs and the decrease in yield per hectare, all the certifications needed for organic production add costs for the grower that are difficult to recoup in the current pricing environment,” says Velazquez de León.

Mayra Velazquez de León of Organics Unlimited. 

Even now with higher spot market prices, growers don’t always get to take advantage of the better prices due to those contracts. “The field price for organic bananas has dropped 20 percent over the last few years when the multinationals got into the organic market, even as the growers’ costs have gone up due to rising labor and input costs. For growers, the margins are so thin that smaller organic growers are being priced out of business,” she says.

To assist with this, Velazquez de León says retailers could step in to support smaller organic growers and pay them a fair price. “There are retailers that pay a fair price for produce and, in turn, offer that fruit at a reasonable retail price. However, other supermarkets continue to offer organic bananas at a low-ball price that does not reflect production costs,” says Velazquez de León.

For more information:
Mayra Velazquez de León
Organics Unlimited
Tel: (+1) 619-710-0658 

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