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Bananas are one of the cheapest items at the grocery store, but they used to be considered a delicacy. SAUL LOEB/AFP via Getty Images
I've Always Wondered ...

Why are bananas so cheap?

Janet Nguyen Jun 23, 2023
Bananas are one of the cheapest items at the grocery store, but they used to be considered a delicacy. SAUL LOEB/AFP via Getty Images

This is just one of the stories from our “I’ve Always Wondered” series, where we tackle all of your questions about the world of business, no matter how big or small. Ever wondered if recycling is worth it? Or how store brands stack up against name brands? Check out more from the series here.

A listener, who wanted to remain anonymous, asks: 

Why do bananas cost less than other items at the grocery store? They have to be harvested and shipped just like other fruits, yet they are incredibly inexpensive. 

A few quarters will get you an entire pound of bananas, making them one of the cheapest items in the produce aisle. 

Labor Department data shows that the average price for a pound of bananas stood at almost 63 cents back in May, cheaper than other grocery items such as lemons ($2.24),  tomatoes ($1.80), and potatoes ($1.01). 

And when controlling their price for inflation, they’ve gone down over time. Ricky Volpe, an associate professor in the agribusiness department at California Polytechnic State University, crunched the numbers, and found that banana prices have fallen 31% over the past 30 years.

And then there is Trader Joe’s, which has famously priced its bananas at 19 cents apiece for decades. 

Welcome news for our pocketbooks, given how much Americans love bananas. They were the most consumed fresh fruit in the U.S. in 2021, with more than 13 pounds available for consumption per person, according to data from the U.S. Department of Agriculture.

Easy to grow, low labor costs, and additional markdowns

Believe it or not, but bananas were once seen as a delicacy in the 19th century. So why are bananas so cheap these days? 

“The short answer is basically labor costs: even though workers in U.S. agriculture do not earn much, farmers and workers in places like Ecuador and Guatemala earn even less. The banana is also a highly productive plant, a result of centuries of selection and breeding,” explained John Soluri, an associate professor of history at Carnegie Mellon and the author of “Banana Cultures: Agriculture, Consumption, and Environmental Change in Honduras and the United States.” 

America’s top banana suppliers include Guatemala, Costa Rica, Honduras, Ecuador and Mexico, said Luis Ribera, a professor and economist at Texas A&M AgriLife Extension Service. 

“Most of the bananas that we consume are imported because they're grown in a tropical climate,” he said. 

When you look at the cost it takes to produce bananas, it’s lower than other fruit, like berries, and they’re also less perishable, Ribera added.

Bananas are also sometimes deliberately priced lower than what’s profitable as a way to attract customers. 

“When you walk into a supermarket, not just in the bulk produce section, but literally walking into a supermarket, one of the first products you see are fresh bananas,” Volpe said. “And they're a fairly common loss leader because retailers want you to see an impressive eye-grabbing price on a popular item as soon as you walk in the store.”  

But there are trade-offs for that low price.

For example, along with low wages, some workers at Chiquita Brands, a major banana producer, say that they face harmful working conditions. A 2018 report from Univision explained that Honduran banana plantation workers might face carpal tunnel, fungal infections or accidents in the field. These laborers can work all day for just $14, at most.

The caviar of fruit

Bananas were once regarded as a luxury item, akin to caviar, explained author Dan Koeppel in his 2007 book “Banana: The Fate of the Fruit That Changed the World.” They became available in the U.S. after the Civil War, but Jamaica was the closest region the U.S. could import them from — a journey that could last three weeks. 

In his book, Koeppel wrote that a Cape Cod sea captain named Lorenzo Dow Baker decided to make a business out of exporting bananas from Jamaica in the late 19th century. While the banana wasn’t widely accessible throughout America, cities on the East Coast such as New York, Boston, and Philadelphia were able to savor the tropical fruit. Baker became partners with a New England produce buyer named Andrew Preston. The two, along with eight other investors, formed the first commercial banana company: Boston Fruit. 

Preston wanted the fruit to become “more popular than apples.” But even though the banana industry cut down on shipping time by changing shipping vessels, the bananas would sometimes arrive rotten. 

To preserve the fruit on its journey, Preston experimented with refrigerated shipping to ensure that the bananas were kept chilled, and set up cold-storage warehouses in the U.S. 

“What Preston and Baker accomplished with their bananas should have been impossible. They brought consumers a highly perishable tropical product, intact and ready to eat, thousands of miles from the place where it grew, at a price everyone could afford. They did it by developing a formula the banana conglomerates still employ today: Work on a large scale, control transportation and distribution, and aggressively dominate land and labor,” Koeppel wrote. 

Another American businessman, Minor Cooper Keith, had begun planting bananas alongside the construction of a rail line he was overseeing in Costa Rica. While his banana business became a lucrative venture, he eventually encountered financial hardships that led him to agree to a merger with his rival, Preston, to create United Fruit Company (now known as Chiquita). 

The company expanded its operations in Guatemala, Honduras, Nicaragua and Panama between 1899 and 1905, according to Emily Perkins, a curatorial cataloger for The Historic New Orleans Collection. 

Perkins wrote that these countries became known as banana republics because “their entire governments were focused around the trade of a single crop … to the detriment of their own people and development.” 

“The local people working these plantations were paid poverty wages, and efforts to organize were violently quelled,” she wrote. 

Bananas might not be cheap forever

The Cavendish banana — the variety of banana we’re all familiar with — may be easy to grow right now, but it faces an existential threat in the form of a deadly fungus known as Tropical Race 4, a strain of Panama disease that was discovered in the early 1990s. 

Constraints on our banana supply might not just mean higher prices at the grocery store. It could hurt economies that depend on the fruit and threaten global food security.

The disease has spread quickly in recent history, affecting banana production across the world, including Asia, Australia, the Middle East, Africa and Latin America. 

The fungus was detected in Colombia in 2019 and in Peru in 2021. The Cavendish banana lacks genetic diversity, making it vulnerable to disease. Wired reported that it reproduces by making clones of itself, which means that it's easy to grow and that its characteristics are predictable.

“People want cheap bananas,” researcher Dan Bebber told Wired. “The system is set up for a very uniform crop.” 

Banana production isn’t a stranger to this issue: In the 1950s, another strain of the Panama disease had destroyed areas that grew the Gros Michel, a different variety of banana that is known as Big Mike. 

Experts say that we need to encourage more diverse agriculture, even if it means more expensive crops. Soluri noted that there are banana varieties out there that could serve as substitutes for the Cavendish. 

The Lakatan banana, for example, is a sweet banana that’s popular in the Philippines. There’s the Blue Java banana, which is native to Southeast Asia and reportedly has the consistency of vanilla custard. Then there’s the Goldfinger, which is resistant to Panama disease. 

“The banana industry has been very conservative in the kinds of bananas it considers to be marketable,” Soluri said.  

Soluri said we’ve embraced different types of apples. Why not do the same with bananas? 

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