Price Sensitivity

Consumers have indicated a desire to know more about the ways their food choices are produced. Farmers, ranchers, food manufacturers, restaurants and marketers have responded by being more open about production practices and have provided more options than ever before.

Many of those options come at a premium price.

Take eggs, for example. A quick look in the grocery store case reveals a variety of options: traditional, cage-free, and organic, just to name a few. Now, let’s take a look at their price tags per dozen:

  • Traditional – $2.72
  • Cage-Free – $4.33
  • Organic – $4.97

While all three are healthy options, with no distinguishable difference in health or nutritional content, the costs of production for cage-free and organic eggs are higher, so the consumer pays a higher price. Some consumers feel strongly about the merits of cage-free or organic production and choose to pay a premium for those options. For others, who struggle to afford nutritious, high-protein options for their families the lower cost, traditional eggs are the only option.

The same applies for many meat products as well.

Chicken breast tenderloins are available in a variety of options. Traditional, cage-free from animals that were never treated with antibiotics, and free-range organic. It is also interesting to note that all three options include “No added hormones or steroids,” on the label despite the fact that federal law prohibits the use of hormones or steroids in poultry. Although the meat in each package is indistinguishable when comparing health, safety or nutrient content, the second two options are higher priced due to the increased costs of production.

  • Traditional – $3.92 per pound
  • Cage-Free – $4.94 per pound
  • Free-Range Organic – $6.48 per pound

The same trends continue for beef, pork, dairy, produce and processed foods. Many conventional and organic options are available for purchase according to each consumer’s personal preference and budget.