Organic market trending but prices and income under pressure

BioFach 2004 in Nuremberg in difficult times

Organic food is trendy, especially if it doesn't differ too much from conventional products in terms of price. However, this leads to considerable market and income worries among organic farmers. Without an average of 10.000 euros more funding, the income of organic farmers would have plummeted in the past financial year. In addition to expanding the product range and enlarging the sales area, the organic sector is increasingly relying on professional and creative marketing. The food retail trade is becoming more and more important for the marketing of organic products. Own brands as well as products from natural food manufacturers and organic variants from conventional brand manufacturers are offered. This was declared by the German Farmers' Association (DBV) at BioFach 2004 in Nuremberg (February 19 to 22.2.2004, 2004). The marketing company of the German agricultural industry CMA will be represented with a joint stand at BioFach XNUMX, as will the DBV Ecological Agriculture Committee, which deals with the promotion of organic farming and the developments in the markets.

The economic downturn in 2003 did not stop at the organic food sector, the DBV notes. For example, sales of organic milk and organic dairy products fell slightly in the past year. Consumers increasingly bought price-consciously from discounters. But because of the higher expenses, higher prices are necessary, for organic farmers, dairies and marketers of organic milk. The necessary price level could not be achieved in 2003. As with conventional dairy farmers, 2003 was a black year for organic milk producers. The base price, which is based on the conventional milk price, fell within nine months by over 6 percent per liter to 27 cents. The dairies, which had to contend with increased costs for energy, transport and logistics in 2003, then lowered the prices paid to the producers, since price increases were supposedly impossible to enforce on the market. The competition for market share caused some dairies to constantly undercut each other in the food retail sector. This development was entirely at the expense of organic milk producers. The declining demand for organic milk also forced organic farmers to market this, in some cases, at even lower prices than conventionally produced milk. If the situation for the dairy farmers does not change quickly, the DBV fears that a number of organic dairy farmers will switch their production back to conventional production. If price pressure continues, structural change in German milk production is likely to increase overall.

The organic grain market is also under increasing pressure due to growing production in Germany and Europe and a demand that is not increasing to the same extent. However, according to a study carried out as part of the federal program for organic farming, the organic market for grain is characterized by a lack of cooperation and communication between market participants. Cereals are produced in almost all organic farms in Germany, if they are not specifically grassland or horticultural farms. The processing and marketing structures for grain production are rather fragmented. The DBV believes that the needs of producers and processors must be better coordinated. It is unacceptable that the producers do not know what qualities the processors need and that the bakers do not know the concerns of farmers and mills with the limited storage options.

Source: Nuremberg [ dbv ]