Farming organically has the potential to leave agricultural producers with a higher margin than continuing to farm conventionally, should the price they receive compensate them for lower yields, the head of the European Commission’s organic unit Elena Panichi has said.

“The yield gap[s] are possibly compensated by higher prices because, in fact, premium prices can go 150% compared to conventional farming,” Panichi claimed.

The organic price premium currently being paid to Irish organic beef finishers is 15% more than the price their animals would achieve on the grid in a conventional factory, Good Herdsmen’s John Purcell told attendees.

Price fluctuation

The price of organic beef relative to that of conventional beef fluctuates, having been approximately €1/kg when beef prices were lower, the representative of the beef processor said.

“We are really a different species, if you like. Everyone is asking what is the premium, but when conventional prices were on the floor, nobody was asking what the premium was – it was a euro a kilo, roughly, of a difference,” according to Purcell.

“Now it is about 15% currently, but it is so hard to follow. We try to park the conventional prices if I can,” he explained.

Market penetration

The Commission’s organics official went on to say that some organic products had better market penetration than others and that meat was one of the food classes with poor market penetration across the EU.

“The highest penetration of organics is in eggs, fresh fruit, vegetables and dairy, while there is still low penetration for beverage[s], meat and processed products,” she said.

Consumers are willing to pay higher prices for “embrace” organic foods out of environmental concerns and food safety concerns arising from the use of pesticides and genetically modified organisms (GMOs), the webinar attendees heard.

Consumer spending

Irish consumer spending on organic foods runs at 40% of the EU average, with Denmark being the country with the higher per-capita consumer spend on organics, the webinar heard.

“€348 are spent per person, per capita, in Denmark and that is the highest level we have in Europe for spending,” the official continued.

“While at European average, we have €102 per capita spend in organic products every year.

“The organic market in Ireland is worth €189m and €39 were spent per capita per year by Irish consumers on organic products,” Panichi said.