Market will deliver for organic

With attractive support for conversion to organic farming and rising cost of inputs for conventional farming, has the time for expansion in Irish organic farming arrived?

The final piece of the jigsaw to make it happen is having a consistent market willing to pay a premium price.

The Irish Farmers Journal spoke to Joe Burke, senior manager of Bord Bia’s meat and livestock team, to find out.

On the question of whether there will be a market for more organic produce from Irish farms, Joe Burke said that he was “very confident” that there is.

He sees the opportunity, particularly in the beef and sheep sectors, perhaps to a slightly lesser extent in dairy because mainstream production is relatively attractive at present and is more intensive. The same applies to pigmeat and poultry as sourcing feed is an issue.

On beef, he referred to Bord Bia research from the end of last year, suggesting the domestic market which takes 45% of organic beef production, is growing at 9% per year and that half of consumers surveyed are willing to pay a price premium of 10% for organic.

Almost half of organic beef exports go to Germany where the market for organic food is more developed than Ireland, with almost 7% of grocery sales organic. This and other continental markets is where he sees the growth potential for Irish organic beef and dairy.

In terms of putting a value on the market premium, Joe Burke said that it was up to €1/kg in 2019 when conventional beef price was particularly weak, less so in the past year.

He referred to the fact that factories are anxious to develop this sector and spoke of an organic processor in Spain who told his colleagues at the recent organic food fair in Germany that farmers are currently getting €5.35/kg for organic beef when conventional beef is €5.05/kg.

Organic sold in mainstream markets

The Irish Farmers Journal put it to Joe Burke that almost half of organic lambs (48%) are not sold as organic. He accepted this and pointed out it was particularly the case for store lambs and even weanling cattle.

He explained that selling organic cattle or sheep is very different than for conventional because stock have to be pre-booked for slaughter well in advance.

It wasn’t possible to turn up on impulse and this is particularly the case in the autumn as farmers generally try to finish stock off grass, which means that there is a seasonal dimension to prices farmers get for organic.

Burke also pointed to the fact that factories are willing to give suppliers a table of prices that will be payable for several weeks and months ahead is also a departure from the mainstream. It shows that farmers selling organic have to be organised well in advance and is very different from traditional selling in marts and to factories.

Recession

The issue of looming recession in the UK and Europe is on the face of it a threat to securing a premium for organic produce. However, Burke pointed to Kantar research in the UK which suggests that organic produce is more resilient than mainstream and regular grocery, though he did accept that it was early days yet in terms of recession.

Burke’s last words were that “we would certainly be optimistic that the market will be there and you know that we will have sufficient numbers of customers on a year-round basis to absorb our output.”

Organic beef and lamb are a tiny part of Irish output at present, but if a market can be developed there is potential to grow.