The Organic Farming Scheme 2010:who will join, and why will they do it?

Perhaps the most stark thing about the article below is the fact that 2/3 of certified organic sheep meat gets sold as conventional. What a waste!

There is a solution to this, for at least some farmers willing to grasp the nettle: direct selling 100% grass fed extra mature organic lamb (extra mature means about 15-18 months) .

My other blog, here, is all about this (as well as other hill farmed organic products)

See, I don't just write about food, I try to change it too!

For now, here's the state of play for the new crop of organic potentials, 2010........

The May 15th deadline for signing up to the Organic Farming Scheme is fast approaching and the last of the compulsory Teagasc Organic training courses are finishing up.

With these in mind, I spoke to Teagasc organic advisor Pat Barry about this years crop of organic hopefuls.

�I don't think all of the 400 or so who have done the course will sign up for the Organic Farming Scheme this year�, he tell me. �Some will take their time - its a big decision to convert a holding, and those who have done the course this year now see what's involved. They can make a more informed decision for next year, which is probably better for the longer term sustainability of the organic sector�.

In organic tillage, while there has been some interest due to the green manure payment, poor returns in conventional, and the availability of conventional slurry to organic farmers, nonetheless take up of stockless tillage remains weak.

In the main �farmers are bringing balance into their own organic units: tillage is being incorporated into livestock farms�.

Numbers converting are strong for sheep and beef. The diet of organic cattle has to be 60% grass, so the variable price of feeds is not as much an issue fas it is for conventional beef farmers.

That said, �the price of organic concentrates is back significantly, but then again, so is the price of beef� according to Pat Barry.

As has been the case, finding markets for organic lamb remains difficult: �2/3 of raw lamb in organic goes into the conventional sector: For every 20,000 ewes only 8,000 lambs are sold as organic. That's a conservative estimate�.

Out of season lamb production is one way to try to access an organic price premium, according to Barry.

One of the most significant changes in organic horticulture and tillage will be the effect of an Grainan, the operation run by Donegal Creameries.

They will be providing �80 acres of carrots and spuds, and a couple of hundred of wheat.�

320 acres of this massive holding, called an Grainan, went fully organic on 1st March. Currently, it produces arable crops, beef, beetroot, cabbage, carrots, potatoes and milk.

In diary, he points out that five are coming on stream this year, and another 3 to 4 next year. This represents a significant increase: �there will be a 20% increase in cow numbers: it will be important for the sector and the market to be fully in tune�.

However, Donegal Creameries again will exert major influence on dairy dynamics.

According to Ian Ireland, Managing Director, Donegal Creameries, they recently invested a significant amount of money in the building of an organic yogurt production plant at their Killygordon site where the company has been processing milk for over a century.

This has allowed the company to supply ALDI's 74 stores nationwide with an organic yogurt range.

The new Liskeel organic yogurt range in ALDI is made by Donegal Creameries. The 500ml pots retail at E1.39 � considerably cheaper than many competitors.

As LIDL and ALDI try to tempt different shoppers in with more diverse products, consumers are shopping around more than just a few short years ago.

Recent research in Ireland suggests that the number of retail outlets people visit regularly has gone from 2.2 to 2.8.

The race to the bottom in price terms is, in many ways, the conventionalisation of the organic sector.

Barry, like many others, suggests �cutting out the middle man� i.e. direct selling, primarily at farmers' markets, as a way to add to, or at least maintain, a price premium.

Along with this, many producers are finding that organic alone is no longer enough. Adding extra meanings - such as health, taste, locale, breed/variety, environment, production methods - to your product, along with organic, is a way forward.

Soon, we will feature here a beef farmer in conversion to organic who has secured an interesting route to market with an interesting breed of animal.

Organic Lamb: the issues according to John Brennan

Along with Beef, sheep makes up the biggest sector within Irish organic farming. This year, as in other years, most farmers opting to convert to organic before May 15th were either in sheep or beef.

While organic beef is relatively successful, organic lamb is far more challenging. In general, conventional lamb sales are down in Ireland, the UK and the rest of the EU, so both organic and conventional sheep farmers face challenges.

(pic: John Brennan - second from the end of the right, at BioFach with the heads of the five families...)

Some farmers who already have a low stocking rate seem happy to convert to organic and collect the improved supports, while still mostly selling into the conventional market.

John Brennan can claim expertise on three fronts. A farmer himself, he also heads the Leitrim Organic Farmers' Co-op, which has 150 members many of them with sheep. He is also completing an MA in Organic Agriculture, specialising in the organic lamb market for his research.

John suggests that �market conditions are difficult and producer sentiment poor�.

�The real issue is that organic lamb in Scotland is 4.51 Euros, whereas in Ireland it is 6 Euro per kilo. Add to this the fact that sterling is weaker and the production costs are lower over there.�

He goes on: �The Irish organic lamb market is about 11,000, whereas Scotland produces 100,000�. In both cases the primary market is the home market.

Inevitably, what holds for Scotland also holds for Northern Ireland with regard to sterling.

For his research, John Brennan surveyed 90 sheep farmers and interviewed a number of processors. He found that September is the biggest month for sales, with 33% of all sheep sold sold in this month. August clocks in at 11%, July 14%. So over half of all organic sheep sold are sold in this period.

�Seasonality is an issue for the rest of the year. This year we scraped through. If a processor said he wanted 40 extra lambs, it would have been difficult to establish.�

Regarding the market, Brennan points out that �there is a solid price for hoggets in the early part of the year, from January to May. Early lambs get a premium. However many of the September sales end up in the conventional market.�

Along with his survey research, Brennan understands the practical issues in securing sales. Marks and Spenser's (M&S) are the main outlet for Leitrim Co-op's organic lamb.

M&S have 27 stores in the south and 14 in Northern Ireland. �M&S want lambs from both north and south of border,� according to Brennan. This inevitably puts pressure on price.

A major issue for the organic lamb market in general is the retailer's cut. According to Brennan �I was talking to supermarket buyer who was taking a 50% mark up in lamb. I could not understand how the market could survive on this. When I asked him, he said that lamb was very profitable, but that he was selling very little because its too expensive. However, he seemed to prefer the good profit over increasing volume of sales�.

With consumers more price aware than ever, and more willing to bulk buy and fill the freezer, this sort of mark up is a barrier to increased sales.

Consumer education also needs to be improved, he suggests, as many consumers do not know how to cook lamb. Product differentiation for organic lamb too is a concern.

To try to secure foreign non-sterling markets, Brennan represented the Co-op as Slaney Meat's preferred supplier at the BioFach organic trade show in Germany this year.

One approach the Co-op are spearheading is direct sales. They have been instrumental in developing the mobile butcher units in the north west, and now have a simple but effective direct sales section on their website for consumers.

This section allows consumers to purchase half or whole spring lambs for the freezer. The meat is then brought to the selected farmers' market for collection. The market must be on at least five days after the order is made, to allow time for processing.

This provides the consumer with a genuine alternative to multiple retailers, provided they are willing and able to bulk buy.

Leitrim co-op: here