Bananas are getting cheaper. That low price comes with hidden costs.
Chances are, you eat bananas. Since they’re the country’s most popular fruit, purchased by nearly 70 percent of people in the U.S., you’re likely to have a bunch ripening on your countertop right this minute, somewhere between waxy yellow and speckled brown. The appeal is clear: Bananas are tasty, filling, potassium-packed. They’re portable, coming zipped in a handy peel. Oh, and they’re cheap—almost impossibly cheap.
Strangely, we pay less for bananas than we do for durable, easy-to-transport items of produce that come from much closer to home. Considering that the delicate and intensely perishable fruit lives no more than two weeks once chopped from the tree, and is shipped from thousands of miles away in chilled containers, it’s unthinkable that it costs less than white potatoes, or carrots—which both go for about 70 cents a pound at retail, according to the U.S. Bureau of Labor Statistics (BOL). Even dry yellow onions, which can last for two to three months in the pantry, cost Americans nearly a buck a pound in 2018. And yet the humble banana averages only 57 cents per pound, according to BOL data, making it by far the cheapest item in the produce department.
That affordability is a key part of the banana’s allure, but it’s also something of a quiet mystery. How is it possible that a temperamental, tropical fruit can be such a bargain?
Part of the answer lies with retailers, who—for reasons I’ll explain—routinely sell bananas at a fractional markup, or even occasionally at a loss. But that low cost comes at a price. According to a 2018 report from Fairtrade International, a nonprofit organization and certifier advocating for agricultural producers in developing countries, modern banana production causes a host of social and environmental problems, from chronic underpayment of workers and workplace harassment to habitat loss and water pollution. The costs we don’t pay at the register—about $6.70 per 40-pound wholesale box, according to the report—are externalized onto smallholder farmers and the employees of banana plantations, as well as onto the land itself.
These issues could be avoided, reduced, or offset through arrangements that incrementally raise the price of bananas, asking us to pay a few more cents per pound to better support workers and farms. Such models already exist. Many fast-food chains, after lobbying from the Coalition of Immokalee Workers (CIW), pay a one-cent premium on tomatoes that goes directly back to workers—a small increase that CIW says has helped to minimize the worst forms of exploitation in the supply chain. When it comes to bananas, companies like Equal Exchange and Fairtrade International use a similar approach, facilitating premium payments that go directly back to producers and workers.
But that model, sources say, is getting more difficult when it comes to America’s favorite fruit. As competition stiffens in the grocery industry, retailers increasingly use artificially low banana prices to gain an edge. That means mission-driven companies that charge more for bananas feel pressure to reduce their prices, too—and raising prices further is out of the question. Retailers simply can’t raise banana prices to more than $1 a pound without losing customers, even if that price is fairer to workers and better for the planet. They’re held in check by a powerful constituency with enormous political clout and unreasonable demands: Us.
The cost of most things—from oil to your Netflix subscription—will change unexpectedly from time to time. But the sticker price of bananas seems to remain remarkably steady, almost if by magic.
In 2018, the wholesale cost of bananas rose significantly due to a number of factors, including striking workers in Honduras and flooding in Costa Rica. According to World Bank data first reported by The Wall Street Journal, retailers paid wholesalers $0.577 a pound in the first two months of 2018, an all-time high. And yet, the average retail price paid for bananas in the U.S., according to BOL data, was $0.571 a pound during the same time period. The nation’s grocery stores were selling bananas for less than they were worth.
That price rigidity is due, in part, to the contracts most grocery stores sign with banana wholesalers. According to Jeff Cady, director of produce and floral for the regional grocery chain Tops Markets, these contracts lock in price and volume for long periods of time, typically between one and two years. Grocers tend to like the stability that comes with longer-term contracts, Cady says, though it does mean that, when market forces cause prices to rise, they can get stuck with the bill.
But contracts don’t fully explain why the price of bananas is lower today than it was a decade ago. That continual downward pressure results from our own unusual attachment to the fruit. It’s a relationship that goes back more than 150 years.