Market for Organic Food Set to Treble
Issued 12th February 2002
The market for organic food in Ireland is expected to more than treble over the next four years, according to Cathal Cowan of the Teagasc National Food Centre.
Addressing the Teagasc Rural Development Conference in Tullamore, Mr Cowan said that organic food sales are currently worth only €25m per annum, representing 0.4% of the total food market, compared to 2% for the EU as a whole.
''Sales of organic food in Ireland have increased steadily from a very low base in the mid 1990s. The total organic market is expected to more than treble to €86m by 2006'', he said.
Mr Cowan said fruit and vegetables account for over 40% of all organic sales. However, 70% of all organic fruit and vegetables are imported. Organic beef and lamb has expanded in recent years and now accounts for 25% of total organic food sales. Dairy products have a 10% market share while sales of organic poultry and pigmeat are virtually negligible, he said.
He said Ireland lags behind much of Europe in the development of an organic milk market. At present, countries such as Australia and Denmark are expanding into exporting organic milk products.
''Given the export orientation of the Irish industry, strong consideration should be given by dairy companies to meeting European consumer demand for organic dairy products'', he said.
Teagasc economist, Liam Connolly, told the conference that there are currently almost 1,100 farmers involved in organic production or in the process of converting to organic.
He said a typical 100 acre beef and sheep producer could expect to increase net margin by 20% by converting to organic.
''This is based on a 15% reduced output and 7% lower costs with organic compared to conventional farming practices and a price premium of 20% for both organic beef and lamb. A significant portion of the increased income comes from the additional payment under the Rural Environment Protection Scheme (REPS) to farmers who convert to organic'', he said.
He said that the premium for organically produced vegetables could be 40%-60% because of the current low volume of production in Ireland. In this scenario, converting to organic vegetables could lift income by 50%.
However he warned that since a high proportion of organic vegetables are sold in local markets or direct to the consumer, markets can be easily over-supplied leading to a rapid decline in price premia.
