Organic growers, shippers face numerous obstacles

As the mainstream market for organic produce continues to grow and mature, the largest grower-shippers face the challenge of maintaining the premium they need while still supplying enough fruits and vegetables to meet the needs of major retailers.

Economic pressures faced by all produce growers, conventional and organic alike, make that balancing act even more difficult.

"We're seeing the premium narrow because of factors making the cost of both conventional and organic go up," said Rod Braga, president and CEO of Soledad-based Braga Fresh Family Farms. "It's labor, regulation and shipping that are affecting the cost of both conventional and organic."

Braga made his remarks as a panel of organic grower-shippers explained the challenges they face in maintaining a reliable supply chain to major supermarket and club store buyers at the Organic Produce Summit in Monterey.

"How do you maintain the premium for organic?" asked vice president of marketing at the California Avocado Commission Jan De Lyser, who moderated the panel discussion.

The answer may be that the price is largely determined by factors that have little to do with the cost of organic production.

"The premium is determined by supply and demand, and right now the demand for organic is very strong," said Roger Pepperl, marketing director for Washington apple and cherry shipper Stemilt. "The price needs to work for consumers to keep product moving. It is difficult enough to supply enough to meet the retailers' demand, and then when you finally do, it's more than they're used to."

Growers on the panel asked retailers for a little understanding of the agronomic and regulatory difficulties involved in supplying a steady stream of quality organic fruits and vegetables.

"We need customer partners who understand what we go through every day to get quality products to them," said Will Feliz, CEO of Wawona Packing, a Central Valley shipper of more than 10,000 acres of stone fruit and citrus. "Sustainability is not just making the environment better. It has to include making our workers' lives better, our customers' lives better, and you have to turn a profit."

One ironic consequence of steadily increasing demand is that growers are constantly faced with the economic challenge of transitioning ground to organic production.

"In the Salinas Valley, you're talking $9,000 or more to transition an acre to organic," Braga said. "We're transitioning 300 to 500 acres a year. We have 4,000 organic acres in the Salinas Valley and another 8,000 in the Imperial and Yuma valleys."

Braga Fresh maintains its conventional business, in part, so it will be able to sell produce from ground it is transitioning.

While selling produce from transitioning ground avoids a total loss, it may not be enough to pencil out.

"As we transition, we're selling the fruit conventionally," Feliz said. "But as you transition, your yields go down substantially. It's one thing to sell it conventionally, but it's another thing to sell it for a profit."

Part of the answer to the riddle of maintaining a premium as organics achieve mainstream efficiency is to continually increase the demand for fresh fruits and vegetables.

"We are a large organic grower-shipper, but I don't see the farmers markets and urban rooftop gardens as competitors," Braga said. "They are promoting what we do. We need to do a better job of explaining how good fruits and vegetables are for you."

These more direct produce outlets could become more important, not less, as a more inquisitive generation of consumers comes of age.

"All of the studies say that the millennials and younger people want to know where their food comes from," said Feliz. "The entire industry needs to have unified answers."

An important part of the unified answer will be the stories of families with generations that worked the land, panelists said.

"This is our 90th year this year," Braga said. "We started in the cattle and dairy business in 1928. Our story mirrors many others in the Salinas Valley; we were always growing one kind of vegetable or another. We started growing organics in the 1990s. I grew up on a ranch with my dad and grandfather and they never talked about organic or sustainability. It was just how we farmed. They used cover crops and rotations to make the soil better for the next generation."

These stories will become even more important as farmers search for answers to ever more challenging regulation, he said.

"It's not farmers that need the water," Braga said. "It's our workers that need it, and our cities that need it."

Water is just one small piece of the regulatory challenge faced by grower-shippers as they try to maintain a reliable supply of organic produce.

"The legislative environment in California is making it incredibly difficult for us, "Feliz said. "Farming a wholesome crop that you can eat is not a waste of water. We feed the nation, and we keep the wheels turning."

(Bob Johnson is a reporter in Davis. He may be contacted at bjohn11135@aol.com.)