Consumer demand in organics from Chile is relatively flat, say suppliers, who warn that while productive acreage is increasing, premiums are down, meaning less revenue for growers.

"Surprisingly, the economy has not had as drastic impact on the organics as we thought it would,” said Bruce Dowhan, general manager of Giumarra Bros. Fruit Co. Inc., Reedley, Calif. “We thought we would really see demand diminish with the economic issues we have … but there is a good premium on the organic versus the conventional and it continues to be a growth item.”

Dowhan estimated a 10% increase in organics out of Chile this year, and noted that the company has year-round organic supply from California, Mexico and Chile coming into 15 distribution facilities on the coasts.

Mario Flores, blueberry product manager for Naturipe Farms LLC, Naples, Fla., said there will always be a market for lifestyle organic eaters and those who believe it is healthier for their families, but that less committed buyers are down.

“Another subset, they’ll buy it because they can afford it, they feel comfortable buying it, but because of the economy, some of those consumers have fallen off the organic bandwagon,” said Flores. “There is always a supply and demand game in the produce industry, so as the demand was there and had increased when the economy was really strong, producers responded by planting more and more organics.”

However, Flores explained as demand has gone down and put pressure on pricing, premiums are not the same as in years past.

“There is still a price premium but not as high as it was a few years ago,” he said. “(Growers) are going to have to understand that if you plant more, those high returns aren’t going to continue to go up and up. The marketplace is getting more mature and so … premiums fall closer toward the conventional.”

Robert Verloop, senior vice president of sales and marketing at Naturipe Farms, said because Chilean organic production has been around for 15 years, Naturipe is in a good position to supply organic demand once it picks up again.

“The organic production part of it is exciting even though we have hit a bit of a (rough spot) with the economy. We still have been increasing interest in that product,” he said.

Verloop said the company will be up over 70% on organics from Chile due to maturing acreage, new acreage that is coming into production and improved horticultural practices that gets more production per acre.

Premiums low

While some suppliers are seeing volumes increase because of natural maturity, others are seeing low volumes pressed lower due to weak demand and inadequate premiums.

Maggie Bezart, marketing director for the Chilean Avocado Importers Association, Washington, D.C., said the hardest hit sector of the avocado market will be the small volume of organics from Chile.

David Schiro, president of Jac Vandenberg Inc., Yonkers, N.Y., also said demand for his Chilean organics will be about the same.

Flores said grower interest in producing organics will weaken because during the peak of the season premiums might only be 10%.

“In previous years the premium was (up to) 60%. That is the adjustment factor we are seeing on blueberries,” he said. “Growers are starting to become realistic in terms of how much they want to continue to grow organic. The ones that have already transitioned into organics, at this point are pretty steadfast, they are going to stick to it … There’s some growers who want to go organic, but they want to make sure that it pencils out for them.”