Organics Unlimited, Coliman Bananas, and Tropical Organic Growers Discuss Rising Organic Banana Costs
COLIMA, MEXICO - In the last year alone, over seven million boxes of organic bananas hit the U.S. market, and that is thanks to the dedicated efforts of the Mexican organic banana industry. Despite successfully producing and delivering high-quality fruit, growers in the industry have undergone extreme cost pressures, posing further challenges for these suppliers.
According to a press release issued by Organics Unlimited, Coliman Bananas, and Tropical Organic Growers, packing material prices have risen nearly 20 percent and plastic bags have gone up 15 percent. In addition, labor costs have also increased by nearly double-digits.
“As an industry, we are very proud of what we have achieved during this exceptional time. We remain steadfastly committed to harvesting organic bananas week in and week out to ensure that supermarket shelves remain well-stocked,” the release stated. “However, we cannot support this great pressure any longer. This is not a recent issue, as we have been struggling with reduced margins for several years.”
Mexico recently became the second-largest source of organic bananas to the U.S. market, second to Ecuador, the press release stated. At this rate, Mexico may become the largest source of organic bananas in the coming years. However, the world’s shipping container shortage has led to additional supply chain pressures, with logistics costs skyrocketing over 15 percent from pre-pandemic rates. Higher costs to ensure a safe, COVID-free environment across operations have also impacted the industry, as well as several major climate disasters, including two hurricanes, Dolores and Nora.
“The current situation is impossible,” the release continued. “Organic banana prices have gone down systematically in the past 10 years, and although we want to offer competitive prices to increase the consumer base and offer affordable fruit, we can no longer sustain what, in many cases, has become a negative margin situation. Organic bananas are not only the cheapest organic fruit offered, but they are also cheaper than any other conventional fruit sold in stores.”
The past 18 months have imposed intense challenges surrounding unprecedented health, social, and economic turmoil on a global scale, with the organic sector dramatically impacted.
“Growing organic is a completely different practice from conventional, with a much higher cost structure due to the need to use certified organic inputs, non-chemical solutions, and sustainable farming practices. Nevertheless, we see in U.S. retail stores as low as a $.10 per pound price difference between the conventional and organic presentations. Input prices rose year over year for the past decade while organic banana prices dropped consistently during the same period. Now is the time for a price adjustment for organic bananas to endure and promote the benefits of sustainable, organic agriculture,” the release concluded.
AndNowUKnow will continue to report on how companies are working to overcome the challenges we are witnessing across the supply chain, so keep an eye out for our next update.