No matter where you buy your groceries, it is likely that you have the option to buy organic, and it's likely to be more expensive. Many people wonder if this price premium is reflected in the costs of organic production. In the January 2012 issue of the American Journal of Agricultural Economics Karen Klonsky gives us a very candid explanation of just that in her article Comparison of Production Costs and Resource Use for Organic and Conventional Production Systems. She looks at various types of crops including alfalfa, tomatoes, field corn, broccoli, lettuce, strawberries, raisins, almonds, and walnuts.
For both the organic and conventional crop systems, Klonsky looked at the costs per acre to maintain fertility along with weed, pest, and disease control. These are broken down into categories such as materials, labor, fuel, lube, and repairs on equipment. The article also compares resource use in the categories of fuel use, labor (human and machine) and water use. What Klonsky found is that "the total cost of fertility, weed, pest, and disease control is higher for the organic systems than the conventional systems except for strawberries and lettuce due to the fumigation of strawberries and the high use of synthetic pesticides in lettuce."
When looking at resource use, machine labor does not vary between the systems much except for conventional lettuce which requires many applications of pesticides. Fuel use is also very comparable except organic almonds require much more due to propane used for flaming to kill weeds, and water use was the same for both systems. However, the organic system required more hand labor per acre for every crop except almonds.
Klonsky closes by saying that given 1) yields are lower for organic strawberries and almonds, 2) organic alfalfa's shorter stand life, 3) organic vegetables produce fewer crops over a 2 year period, and 4) higher organic production costs - the organic market is largely dependent on price premiums often reflected in grocery store prices to make comparable profits. For more information on price premiums and the U.S. Organic Market, check out Price Premiums Hold on U.S. Organic Produce Market from the USDA ERS.