THE GROWTH OF AUSTRALIAN ORGANICS
By PETE HEININGER
(This article was commissioned by The Australian Financial Review early in 2009)
Australian organic farming, food processing and marketing is now big business – light years beyond the concept of hippy farmers trundling small barrow-loads of produce to their local markets.
The country’s largest member-based organics organisation, Biological Farmers of Australia, says the retail value of organic products sold in Australia – incorporating imports and adjusting for exports – is now $623 million.
Farm gate value of Australian organic products and produce stood at $231 million in 2007.
The BFA says the global financial crisis does not appear to be having much effect on organic production, or on the numbers of farms seeking organic certification. Australia now accounts for the largest area of certified organic farmland in the world –slightly less than 12 million hectares.
Capitalising on the rising popularity of organics, the BFA – as part of its 2009 green marketing push – is aiming to see “organic products in every isle in the supermarket from 2009”, general manager Holly Vyner says.
“From here, we believe organic produce and products can feature in almost all shopping baskets by 2013,” she says.
In its market forecast report, Food Of The Future: Australian Shopping Baskets in 2013, IBISWorld highlights a range of organic products it says will rise in popularity in the next four years. These include organic yoghurt and other dairy products, eggs, processed chicken, red meat, and chocolate.
The BFA – for whom the report was prepared – says those with a sweet tooth, and who love their teas and coffees, are arguably taking one of the sharpest ethical turns. IBISWorld says chocolate sales are set to rise sharpest where products are shown to be dark, premium, and certified organic and/or fair trade.
Organic chocolate company Loving Earth’s managing director Scott Fry says that despite current economic conditions, demand for his products are “skyrocketing” in Australia and New Zealand.
Robert Watson, from the Mungalli Creek biodynamic dairy in Queensland, says demand for organic products, particularly cheeses, is also growing exponentially.
Those producing organic red meat and poultry are encountering similar market conditions, and the BFA is expecting producers to invest further in 2009-2010 in marketing the distinction between organics and conventional products.
“We’re now embracing technology that will help deliver high-quality, organically certified lamb to consumers,” Justin McClure, a large organic meat producer near Tilpa, NSW, says. “The lower stocking densities [of organic farming] are working in tandem with our management to deliver quality meat.”
Vyner says that although there’s no hard data yet, supermarket chains are telling the BFA that shoppers are continuing to demand organic produce and products. She says consumer demand for organic produce has risen “at least” 80 per cent in the past few years.
The BFA released its second Australian Organic Market Report in 2008, designed to allow farmers and marketers to make business decisions on organics and organic marketing.
The first report, published in 2004, was provided to the federal Department of Agriculture, Fisheries and Forestry.
“[The report] also provides reference points for governments and other interested parties on a range of issues – including farm-gate value by industry sector, the estimated size of Australia’s retail market, as well as import and export values,” the BFA’s chairman, Queensland vegetable farmer, Doug Haas, says.
The report, commissioned by the BFA, was researched and compiled by the University of New England’s Organic Research Centre.
“Organic farming in Australia has been operating under formalised agreements since the 1980s,” Haas says.
Now, thanks to higher customer awareness of organics, he says major retailers are carrying more than 500 different fresh and grocery lines.
At last count, Australia had 2750 certified organic operators, and this number had risen 5.2 per cent between 2004 and 2007. The BFA’s registered member and client list now stands at 3500 individuals and organisations.
The BFA says that of all organic farmers, processors and marketers, about 75 per cent are farmers, and about 66 per cent of these are engaged in horticulture.
Yet despite its size, and the fact that some organic sectors have grown 10-30 per cent since 2004, only 1.5-1.8 per cent of Australia’s farmers are certified as organic operators. Haas and Vyner are adamant: there’s still enormous potential for operators wishing to embrace organic and/or biodynamic farming and processing – both for local and export markets.
Time is on organics’ side. The average Australian organic farmer is younger than his conventional counterpart, and the BFA says organic farms are growing in size and through consolidation.
One BFA member in the Bowen district of central Queensland employs 200-300 workers seasonally, and harvests up tgo140 tonnes of tomatoes a day. Another member, a chicken farmer, is processing up to 80,000 birds a week through his on-farm facility, Haas says.
So what’s driving this increased production?
The BFA says farm gate sales of organic produce have risen more than 80 per cent since 2004, and IBISWorld says 40 per cent of all consumers now say they buy organic food items “sometimes” when they shop.
This growth in demand, in turn, has created other organic niches – ranging from fertilisers to cosmetics.
The BSA helps maintain organics stability through its two certification agencies, Australian Certified Organic and Organic Growers of Australia.
These standards are helping Australian producers in some of the toughest export markets. Late last year, beef producers Matt O’Leary from Australian Organic Meats in NSW became the first meat supplier in the world to meet criteria of the Japanese Agriculture Standard (JAS) for livestock.
“We were able to conform . . . quickly because we were operating at a high level under Australian standards already,” O’Leary says.
Although most organic meat suppliers current conform to Japan’s National Standard for Organic and Bio-Dynamic Produce, JAS is likely to be mandatory in future.
“We’re now that one step ahead to service a market that’s showing growing interest in Australian organics,” O’Leary told the BFA recently.
