OF0374 Annexe 3 Summary Workshop 26 Feb 2008.doc

Workshop on The characterisation of markets for organic goods

The project team for the Defra project OF0374 held a workshop at Warwick HRI Wellesbourne onTuesday 26th February 2008. The invited participants were as follows

Rosemary Collier / Warwick HRIProject leader
Jane Fellows / Warwick HRI Project team member
Graham Collier / ABACUSProject team member
Matt Reed / CCRI Project team member
Andrew Charlton / ABACUS
Andrew Trump / ABACUS
Gabrielle Lanceley / ABACUS
Gareth Jones / ABACUS
Isobel Wright / ABACUS
Lois Philipps / ABACUS
Mike Tame / ABACUS
Ric Bowers / ABACUS
Lucy Barnard / Defra Project officer for this project OF0374
Allan Butler / University of Exeter
Damian Maye / CCRI
Sue Fowler / Organic Centre Wales
Catherine Phillips / Organic Inform
Liz Oughton / University of Newcastle
Alan Hopkins / University of Exeter
Chris Firth / HDRA
Margi Lennartsson / HDRA

Apologies were received from Stephen Briggs (ABACUS Project team member) and Phil Stocker (Soil Association).

The workshop began with an introduction to the project OF0374by Rosemary Collier. Allan Butler of University of Exeter then gave an overview of the complementary project OF0377entitled Analysis of socio-economic aspects of local and national organic farming markets.Afterwards, presentations for each of eight sectors were given by the sector specialists from ABACUS, followed by an open discussion of the points raised. At the end of the workshop, common issues were identified and discussed by all present.

The outcomes of the day are summarised below.

ARABLE Andrew TrumpIsobel Wright

  • The market is very dynamic
  • World commodity price will be a continuing influence
  • The growth in livestock sectors causes increase in demand
  • The sector is weak because it is small
  • Insufficient volume causes problems in both supply and localised storage
  • Overheads are high because the sector is small
  • The levy body is perceived to be disinterested
  • Price differential relative to non-organic has reduced so there is a lack if incentive to convert
  • Market intelligence is poor
  • There is a lack of co-operation within the sector

DAIRY Mike Tame

  • Both scarcity and high cost of feed are prohibitive
  • Balancing supplies is difficult, with overproduction in Spring, under in Summer
  • Collections are spread and distribution costs more
  • Low prices ensure that there is no financial incentive for a conventional farmer to convert
  • There are opportunities in processing, for example cheese production

DISTRIBUTION & RETAILING Graham CollierGabrielle Lanceley

  • Multiple retailers dominate sales
  • Other diverse routes via farm shops, farmers’ markets, mail order, box schemes
  • Diverse consumers in both private and public sector catering
  • The conflict between local and organic clouds the issues
  • Consumers do not understand organics
  • But, consumers are more aware of how food is produced

FOOD PROCESSING & MANUFACTURING Gabrielle Lanceley

  • Processed food is a paradox to the organic ideal
  • Large businesses can cope but there are difficulties for small businesses
  • Problems of scale
  • Provenance of ingredients is an issue
  • Feeling of well-being is important, now 40-50% of baby food is organic
  • Opportunities in catering, textiles and cosmetics
  • Food safety is an issue with small scale producers

HORTICULTURE Ric BowersGraham Collier

  • Complex and diverse industry
  • Many and various routes to market
  • Lack of critical mass of both growers and packers
  • Lack of suitable land for conversion which is in itself a costly undertaking
  • Problems with continuity of supply
  • The sector is vulnerable to adverse weather conditions
  • Disease pressures
  • Quality problems, particularly with recent converts
  • The industry is reactive and should be proactive
  • Irrigation may be a greater barrier to conversion for horticultural crops than soil fertility

PORK Gareth JonesLois Philipps

  • Sector has expanded rapidly
  • Feed availability is a problem and feed cost is prohibitive
  • Conventional breeds manifest better food conversion rates
  • Many small scale producers
  • Processing problems, and difficulties with location of abattoirs
  • Carcass and meat quality problems
  • The levy body is perceived to do little for organic producers
  • The sector needs to co-operate and collaborate

POULTRY Lois Philipps

  • Rapid growth in the sector over the last 20 years
  • Major concerns over availability of feed at affordable prices
  • Reluctance to convert because of feed costs and fear of avian flu
  • Unsuitability issues with breeds available for table birds
  • Massive increase in demand instigated by media campaigns for free-range
  • Egg prices judged to be on the edge of what the consumer will pay
  • Volume of by-products lacks critical mass
  • Labour is a concern
  • Scope for product development

RED MEAT Andrew Charlton & Dan Powell

  • Growth in demand outstrips supply
  • Very fragmented sector with a diverse group of farmers and a large range of breeds
  • The sector lacks cohesion and strategy
  • Approximately half of animals are sold into the conventional market
  • Problems with feed availability and cost
  • Many and various routes to market
  • Specifications by the multiples are very tight e.g. upland lambs are too light
  • Volumes of produce are too small for processors
  • Many breeds are unsuitable to match market demands
  • Real threat to the sector of well-hung conventionally produced meat
  • Opportunities for meat production from dairy herds

A number of commonalities were identified

  • The impact of rises in commodity prices will impact on the entire food chain
  • There is a great lack of both market awareness and market information
  • There is a lack of co-operation within and between sectors
  • Communication is poor
  • In each sector, there are a few powerful players, some detrimental some beneficial
  • There are many issues about the variability of quality of produce
  • Demand often outstrips supply
  • Location relative to abattoirs, processors, distributors and markets is of great importance and can limit the operational potential of some enterprises which are geographically distant or remote from these facilities
  • The predominance of conventional markets hinders all sectors
  • Relationships between organic and conventional require improvement, perhaps via the levy bodies
  • The consumer needs to be better informed
  • There are some very good green non-organic products and consumers are confused
  • Organic products must compete with local food and premium products
  • There may be opportunities to make the product profitable by selling the by-product

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