July 14, 2006

 

Organic meat market growing strongly

 

 

As demand for organic foods continue to strengthen across the globe, organic meat supply shortages and price hikes are expected to continue, according to a new report by Organic Monitor released this week.

 

Soaring demand for organic meats is causing global supply to tighten, and North American processors are having to look overseas for supplies to meet growing demand. The situation is raising prices of organic supplies across a range of meats.

 

Demand for organic beef has surged since the first cases of mad cow disease in the US were reported in 2003, the report stated. The organic beef market is expected to reach US$13 billion this year.

 

Organic meat sales in North America increased by 51 percent in 2005, making it the fastest growth area in the segment. Most growth is occurring in the US organic beef market, which has doubled each year since mad cow disease was first reported.

 

Supply has been unable to meet demand since USDA put in place the National Organic Programme (NOP) in 2002, the industry analyst said.

 

This means US processors have been importing organic meat products from Latin America, Australasia and Canada. Imports are increasing at a fast rate with the volume of non-American organic pork doubling in 2005 alone, Organic Monitor noted.

 

Western Europe is also experiencing acute supply shortages.

 

Meanwhile, the production of organic meat has failed to keep pace with rising demand in a number of countries.

 

The organic beef and pork segments are the most adversely affected with prices rising across Europe. Danish Crown, the largest producer of organic pork, has reported a 36 percent price rise compared to last year, the analyst stated.

 

In Europe, British retailers have started offering fixed contracts to organic meat producers to secure supply, the report stated.

 

Like the US, organic meats are imported from a number of countries into the UK.

 

The increased demand has gained the attention of beef exporting countries like Brazil and Australia. Friboi, a leading Brazilian producer of organic beef, is expecting export sales to triple this year. New organic meat producers are also emerging in other Latin American sales.

 

Organic products still account for less than two percent of food sales in the US, and organically certified land is only 0.3 percent of the nation's farmland.

 

However, the number of acres certified as organic surged by 74 percent between 1997 to 2001, according to a study by the USDA's economic research service.

 

Legislation passed in 2003 allow farmers to label meat and dairy products as organic without using 100 percent organic feed under certain conditions.

 

Mad cow disease has increased consumer awareness of organic production methods, said Organic Monitor in a previous report. Organic meats have become popular as they are made from animals free from antibiotics, growth promoters or synthetic feeds and are thus perceived to be safer.