THE EFFECT OF CALIFORNIA WEATHER CONDITIONS ON PRICE PREMIA FOR ORGANICALLY GROWN VEGETABLES IN THE UNITED STATES

Organic vegetable producers typically earn a premium over conventional producers to cover the added costs of organic production. The premium can vary greatly, making organic vegetable farming riskier than conventional farming and causing potential financial problems for new organic farming enterprises. Further, organic vegetable production is geographically concentrated in California, and the variation in organic price premia depends upon regional production factors, especially weather conditions. This study examines the relationship between organic vegetable price premia and California weather conditions near organic vegetable farms. Analysis is based on a unique data set of daily prices from the Boston Terminal Wholesale Market and California weather data from the National Climate Data Center