Growing Method, Organic Certification and their Impact on Wholesale Prices

Last month, Cabbige Insights featured analysis of wholesale channels for direct market farmers, and our conclusion was that broader, higher volume wholesale channels are necessary to open up significant revenue opportunities for small-to-mid sized farms.

And, as anyone who has worked to bring local food into wholesale channels knows, there is much to be considered and done in this area. Our May Cabbige Insights report focuses on farm growing method (ie. certified organic, not-certified organic, use of cover crops, no-till method, and the presence or absence of pesticides). We looked at trends from our internal data on what types of farms have organic certification, their growing methods, crop and sales channel mix, and price premiums associated with growing method across different sales channels.

Non-certified organic farmers

no till method

Pesticide use

Cover Crops

87% of the non-certified organic farms employ at least one organic or sustainable method without being certified. The question is: what happens to the 87% of small-scale growers that have typically sold through direct-to-consumer channels when they enter wholesale channels? More specifically, how does organic certification status impact prices in wholesale markets, both the direct wholesale buyer that we found so prevalent in last month’s report, and larger-volume buyers?

We decided to measure the percentage of the retail dollar that farms are able to get through wholesale channels based on whether they have organic certification or are non-certified organic growers with organic/sustainable practices. The results that we found were very telling, though not surprising. 

Cabbige subscribers can access the full report here.