Although the organic produce industry is growing dramatically, little
is known about market structure. We estimate a system of reduced-form
equations to evaluate supply and demand factors that influence equilib
rium farm price and quantity in wholesale markets for organic broccoli
, carrots, and lettuce. In the long run, demand factors dominate suppl
y factors. Reduced wholesaling costs, increased margins by which organ
ic wholesale price exceeds nonorganic price, and higher consumer incom
e stimulate both farm price and output. Increasing the nonorganic farm
price decreases equilibrium quantity of organics. Market expansion st
rategies should target consumers and wholesalers.