News that Walmart is partnering with the Wild Oats brand to provide organic products at lower prices has been met with some skepticism.
Supply And Demand
Initially, the demand for organic ingredients to create the olive oil, tomato products and applesauce that Wild Oats produces will drive up prices. If the line takes off, the move could eventually drive organic prices down.
Organic products typically cost more not because of a “premium,” but because organic farmers don’t receive subsidies like conventional farms.
For organic farmers to meet demand, farmers could implement industrial organic practices, potentially diluting the sustainability of organic farming.
Currently, demand for organic foods far outstrips production in the United States by about 25 percent.
In order for Walmart to sell organics at rock-bottom prices, the cost must be made up somewhere, executive director of the Rodale Institute Coach Mark Smallwood explained.
Walmart has said it has a plan for both suppliers and consumers — although it hasn’t said exactly what that plan is.