With organic and natural pork production, modest producer premiums are likely to continue over the long run, according to a study from the University of Minnesota Swine Center. Wheatley recently completed the study by reviewing a number of previous studies done throughout the U.S. and talking to pork producers. He says demand is driven by the perceived safety of organic and natural products. As such, consumers view the premiums paid to organic producers as implicit rewards for reducing the pollution associated with production. An additional source of increased demand is the consumer perception that natural and organic production provides for improved animal welfare.
Actual premiums received by producers are hard to document, since no studies have been done.
But Wheatley's discussions with two natural and organic pork producers and one marketing firm give you an idea. In its promotional material, the cooperative indicated a pricing policy based on production costs and maintenance of a fair price, which is independent of commodity pricing. This same producer also handles all the processing and marketing in a separately held company. However, the premiums existed even when prices were lower in 1998 and 1999, and provided some stability to these producers' incomes. Check-off dollars from the Minnesota Pork Producers' Association funded the project.