Welsh organic farming and organic market in figures[1]

1] All figures are taken from the Defra’s statistics January 2007 unless otherwise stated.

Organic land in Wales ;

End 2006, organically managed land in Wales accounts for 12.8% of the total organic land in the UK and approximately 5.5% of the total agricultural (organic and non-organic) land in Wales. Between December 2005 and December 2006, the area of organically managed land in Wales increased by 11.5%, outperforming every other nation in the UK.

 The area of land under organic management in Wales in December 2006 was 78,973 ha (see also 1). Fully organic land area increased by 9.5% from 58,024 ha in December 2005 to 63,546 ha in December 2006.  (See table 1 and figure 1) and the area of in-conversion land in Wales increased by 20% in the same period. Whereas the area of in-conversion land in the UK as a whole increased by 41% over the same period. OCIS requests in Wales contribute to 44% of the total in the UK. It is suggested that

Figure 1: Change in organically managed land area, Wales, year end 1998 to year end 2006

There are currently 710 organic and in-conversion farms in Wales. The average organic farm size has increased from 94 hectares in April 2004 to 111 hectares in December 2006 (See Figure 2, below). It is the biggest of all regions in the UK.

Figure 2 Average Welsh farm size

The number of registered organic producers in Wales increased from 688 in December 2005 to 710 in December 2006, or 15.3% of the UK total, in December 2006. In the UK as a whole the number of organic producers increased by 8.3% over the same period.

 The number of registered organic processors in Wales increased from 112 in Dec 2005 to 125 in December 2006. This indicates that consumer demand for high quality, organic produce continues to grow, or 5.2% of the UK total. In UK as a whole the number of organic processors increased by 13% over the same period.

Comparison of Wales with UK

This section provides information about organically managed land, number of producers and farm sizes in both Wales and the UK, between 2000 and 2006. See also the UK statistics for more information/ comparison.

Table 1 Organically managed land (OML) in Wales and the UK, year end 2000 to year end 2006

Source: Defra dataset

 Table 4: Number of organic producers (fully organic and in-conversion) 2002-2006

Source: Defra dataset

Figure 3 Average farm size in the UK, 2002-2006

Source: Defra dataset

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Key sectors of organic production in Wales 2000-2006;

Beef and sheep production dominates organic farming in Wales, and as a consequence 81% of fully organic land in Wales is permanent grassland (see figure 4). Only 3% of organic land is arable and less than 0.5% is horticultural. However, the organic share of horticultural land is over 20% and when including potatoes it is just over 25% (see figure 5).

Figure 4 Welsh organic land area by enterprise type, December 2006

Table 3: Welsh organic land area by enterprise type, December 2003 – December 2006 (hectares)

Source: Defra dataset, adapted

Livestock

Organic cattle and sheep numbers have increased steadily between 2003 and 2006, with total cattle numbers increasing to 41,600 and sheep to 279,000 by the end of 2006.  These quantities represent 17% and 37% of the UK organic population respectively, contrasting with Wales having 13% of UK organic land area.  See figures below for more details.

 Figure 6a Development of number of cattle 2003-2006                                             Figure 6b Development of number of sheep 2003-2006

Source: Defra dataset                                                                                                Source: Defra dataset

Figure 6c Development of number of pigs 2003-2006                                                Figure 6d Development of number of poultry 2003-2006

Source: Defra dataset                                                                                                 Source: Defra dataset

For more detailed information on the Welsh organic red meat sector click here and see also the following reports: 'Review of the market for Welsh organic meat, 2007 ' and 'OCW benchmarking project- costs of production for organic milk, beef and lamb '.

Dairy

In 2007 there were 86 licensed organic dairy producers in Wales, which is less than 4% of Welsh dairy farmers, and a further 12 farms are in conversion.  The 2006/07 organic dairy herd was 12,500 strong, with an average herd size of 86 cows, slightly greater than conventional Welsh herd average of 75 cows.

After quiet years due to the oversupply of organic milk in 2002 and 2003, enquiries from dairy farmers about conversion increased substantially in 2006. However the sector is being cautious about expanding supply as a result of the lessons learned in 2002/03.  One of the key findings of the marketing report was the need for cooperation by all parties to share information on demand and supply to ensure no repetition of the oversupply problem.

As well as addressing the supply issue, other conclusions from the report are that the industry needs to encourage more organic cereal and protein crops to be grown to prevent a shortage of organic feed, and further work on conserved grass legumes and alternative protein sources is needed to address the impact of the economics of winter milk production on seasonality issues.

Arable

Currently, 4.8% or 3,756 hectares of organic land in Wales are under arable production. Nearly 2,500 hectares was under cereal or protein crops in 2006, accounting for 3% of Welsh organic land.  Figure 6 shows the arable sector per subgroup. The data is derived from a producer survey which was part of the Welsh organic arable sector review; follow the link Market Review of the Welsh Organic Arable Sector, 2007 . It was chosen to use these data as DEFRA data for UK arable exclude a number of protein crops and root crops used for fodder.

Figure 8. Arable sector per subgroup December 2006

Horticulture

Just 343 hectares of organic land in Wales are under horticultural production; that is less than 0.5% of total Welsh organic land area. The area under horticultural production in Wales has remained static, or even decreased since 2004, and lack of local suppliers is the key constraint to further expansion of many businesses. This contrasts with the UK market for organic horticultural products which reported exceptionally high growth in 2006, increasing by almost a third.

 The sector covers a wide range of crops, including root vegetables and alliums, potatoes, green vegetables, salads and protected crops and fruit (figure). Figure X gives an overview of the current situation (March 2007). The figure is based on data obtained via a producer survey. It was chosen to use these data as DEFRA data for UK horticulture include peas, beans, turnip, swedes and kale for fodder and combining. The figure shows the large contribution of potatoes.

 Figure 9. Organic horticultural crops in Wales by area

For more information on the organic horticultural sector in Wales refer to the following report: Market Review of the Welsh Organic Horticulture Sector, 2007. See Table 3, below.

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Welsh organic food sales;

The sections below are a brief summary of the Welsh organic sales and markets for the meat, arable, horticulture and dairy sector. To find out more about the Welsh organic markets of a specific sector please follow the link.

Organic meat market

The Welsh organic meat market is currently worth £2.4 million and is growing at 3% a year. This growth is coming from new entrants into the market. The total GB market is growing ate 10%, ahead of Wales but the household penetration in Wales is higher at 13.1% compared to 12.9% for GB as a whole.

The Welsh organic meat market review suggests that there are opportunities for sales to retail markets in Great Britain, to the foodservice sector and for export of organic Welsh lamb;

Organic farm gate prices for lamb and beef remained relatively steady over the 2003 – 2005 period, although the gap with conventional prices closed as the conventional sector recovered.  Prices strengthened in 2006 resulting from increased demand for organic meat and the temporary suspension of organic beef imports from Argentina.

Organic premium prices do not, however, fully compensate for the increased costs of production per kg of meat, so that organic producers, like their conventional counterparts, are being paid less than the real costs of production, and are relying on Tir Mynydd, agri-environment and Single Farm Payments to subsidise continued production. This leaves the industry vulnerable to any decline in market conditions and will mean continuing pressure on smaller producers to leave the sector.

The Welsh organic red meat sector currently relies on two main marketing approaches. The majority of lamb and beef (> 80%) is marketed through multiple retailers, supplied by two producer groups. The need for producer collaboration to ensure a strong price negotiating position with the multiple retailers is recognised and has been yielding benefits. The remainder of Welsh production is marketed on a smaller scale through specialist and local retailers and directly to consumers, through farmers markets, farm shops and via internet sales. There is currently virtually no exploitation of the potential export market (outside the UK) and still some difficulties with marketing light and store lambs as well as dairy bred calves and cull cattle, although various initiatives are in progress to address this.

Organic arable market

The UK position for the supply and demand of organic cereals is giving considerable cause for concern at the present, particularly in the area of organic livestock feed. This has been brought about by marked increases in organic milk, pork, egg and poultry sales along with continuing expansion of the red meat sectors. This has led to a considerable imbalance that is likely to get worse over the coming years, something that will be amplified by changes in the standards with respect to non organic feed allowances.

 It is estimated that the UK is around 60% self sufficient in home produced feed grain – the shortfall is made up of imports from around the world and a number of factors are threatening the security of supply from many of the exporting countries. The calculations involved are subject to a number of crude assumptions and there is universal agreement that there is an urgent need for information and regularly updated statistics.

Organic horticulture market

The Welsh organic fruit and vegetable market review 2007 estimated the farm-gate value of Welsh produced organic fruit and vegetables to be around £1.8 million. Marketing channels for Welsh organic fruit and vegetables as used by people interviewed as part of a survey conducted for the organic horticultural market review 2007

Produce is marketed through various channels (Figure X ). There has been a shift away from supplying pre packers/ multiples in recent years, towards direct selling through local outlets: independent retailers, box schemes, farm shops, farmers markets and processing (including wine). This is partly due to an increased interest in local food generally (direct sales of non organic food have also increased rapidly), combined with the closing of the Organic Farm Foods pre-pack facility at Lampeter in 2005.

Figure 10. Marketing outlets for Welsh organic horticultural produce (2007)

There are clearly opportunities for growers wishing to expand their businesses or livestock producers considering diversification into vegetable production. It is estimated that the box scheme/ wholesale market alone could grow by £0.5 million on the basis of increased demand and import substitution. There are also potential opportunities in new markets, such as the public sector, as councils become more interested in sourcing form local and sustainable businesses. However there are also challenges to be met including access to labour, land, machinery, labour and finance.

Organic dairy market

In 2006 and in 2007 both the organic milk price and conventional milk price have changed enormously. With the demand for milk from countries such as China, the conventional milk price has risen enormously. It is unclear how both the organic and conventional milk price will develop in future.  The figure below shows the demand for organic milk. The latter years are projections.

 Figure 11. Organic Milk demand and supply changes 2000/01 to 2008/09.

Source: OMSCo (2007)

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