Cymraeg

 

Thank you to the producers who completed the Organic Producer Survey in the autumn. The full report can now be downloaded here or requested from OCW. It builds upon last year’s survey, and covers all aspects of organic production and marketing, as well as attitudes to organic conversion.

 

Download the Welsh organic production and market report 2008 (PDF, 837kb) or read the summary below.

 

Growing organic sector continues to remain competitive

 

Larger Welsh organic sector The Welsh organic sector has grown to over 950 producers in 2008, with up to 150 additional producers per year entering conversion in 2007 and 2008. Organically managed land in Wales now extends to over 100,000 ha, most of it grassland. Organic cropped land areas are still small, although a relatively high proportion of horticultural and arable land is now organic.

 

Producer concerns: premiums, feed prices and new converters

The primary concern for Welsh organic farmers is the reduction in organic premium in many sectors. Beef and sheep farmers are being paid around £3.00/kg DW, which many view as too low, particularly when conventional prices are very similar, and organic feed is still at around £360-£400/tonne. There is evidence that the credit crunch has reduced demand for more expensive cuts of meat, affecting demand for prime stock. Sheep farmers in particular expressed concerns that the lamb market was over-supplied, with apprehension at the large numbers of sheep now in-conversion. Organic dairy producers are generally receiving a significant organic premium on their milk, though many indicate they need a larger margin over conventional prices to pay for expensive organic feed. Egg producers vary considerably in size, with many small producers finding feed prices to be prohibitive, whilst new poultry enterprises tend to be on a large scale.

 

Beef prices Sources: Graig Producers and AHDB SQQ prices

Sheep prices Sources: Graig Producers and AHDB SQQ prices

 

Reasons for optimism

Organic lamb prices are considerably higher than last year, with spring supplies now expected to be short, and although organic beef prices are slightly below last year, conventional prices are almost identical and provide a buffer to organic supply. The latest cost-of-production data confirm that the organic red meat sector performed extremely well in 2007/8 and will remain competitive even at conventional prices. Organic prices have been stable for a number of years, and a number of factors supporting high conventional prices will ensure organic prices remain good.

 

Livestock sectors prepare for addition of converting stock

 

Table 2: Estimated livestock numbers, sales and % sold as organic, 2008 Livestock type Estimated numbers retained on farm Estimated total sales from Welsh organic livestock Estimated Organic sales % of total Estimated Welsh livestock currently in-conversion Breeding cattle 9,100 650 31% 4,250 Store cattle 13,000 3,400 74% 3,000 Finished cattle - 6,900 94% - Breeding sheep 125,000 11,050 18% 65,000 Store lambs 41,000 18,200 40% 19,600 Finished lambs - 133,100 73% - Dairy 12,500 73 million litres 93% 1,550 Laying hens 46,000 900,000 dz eggs 100% 350 Pigs 30 300 83% 15

 

Estimated fully organic livestock numbers remained similar in 2008 compared with 2007, though significant numbers are now in conversion – however, these are not expected to come on to the market in significant numbers until 2010/11 and beyond. In the beef sector, around 25% of store cattle and 6% of finished cattle were sold into the conventional market. In the sheep sector, 25% of finished lambs and 60% of store lambs were lost to conventional markets, partly due to attractive conventional prices. Despite large numbers of livestock in-conversion, it will be a number of years before they produce any organically marketable livestock, which will allow time for the market to adjust.

 

Future intentions Producers’ future intentions vary considerably between sectors, as the diagram shows. Horticultural and arable producers are the most optimistic, while a high proportion of beef and sheep producers think the price is too low.

 

Market development

These results will enable OCW, WAG and other industry bodies, including Hybu Cig Cymru, to develop effective strategies to ensure the Welsh organic sector continues to expand. Despite producer concerns the sector remains financially competitive and has time to adapt to additional organic producers.

 

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