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ORGANIC PERSPECTIVES
October 2000
1. Organics in Western
Japan
Staff from FAS's Agricultural Trade Office in Osaka met
with retailers, importers and consumers to explore the state of
the organic market in western Japan. The results, summarized in
this interesting, comprehensive report, provide insights into
people's attitudes about organics that have implications for U.S.
exporters. Currently, the major constraints facing organic
products in the western Japanese market are high prices, limited
product variety, consumer distrust of the legitimacy of organic
products, and low consumer awareness. The main organic and
"reduced chemical" foods consumed include fresh
vegetables, rice and fresh fruit. Imported organic foods account
for 10 percent of total sales, and the United States' major
exports to Japan are soybeans and frozen vegetables. Dried fruits
also show potential for success in this market. Source:
Attache/ATO report JA0712.
2. Fresh Organic
Deciduous Fruit Production Overseas
Full-scale, sector-specific organic reports from FAS
overseas offices are not possible at this time because data and
information are scarce. However, as supply and demand for organic
products grows, so will the need for a better understanding of
the current status, trends and future outlook. The following
items were sent in by attaches as part of comprehensive reports
on the conventional deciduous fruit sectors of their respective
host countries to help shed some light on the organic side of the
equation.
Austria - About 600 hectares (1,480 acres or 5 percent of the total commercial fruit area) are devoted to organic fruit production. Apples dominate, accounting for 40 percent of planted area. The remaining shares of organic planted area consist of pears-- 4 percent; cherries/sour cherries--2 percent; plums--1 percent; apricots--3 percent; peaches--2 percent; nuts and quince--4 percent; strawberries--7 percent; red currents--11 percent; and other berries, including elderberries--26 percent.
In Austria, "integrated" fruit production (where limits are placed on the quantity of fertilizer and pesticides allowed) is subsidized at the rate of $US440 per hectare ($US175 per acre) to compensate for higher labor costs and lower yields. Organic production is supported at the significantly higher rate of $US625 per hectare ($US255 per acre). However, despite the subsidies and a level of demand that exceeds supply, relatively few farmers have gone organic and currently far less than1 percent of both fruit production and consumption in Austria is organic. Constraints on production include high labor costs, fear of losses to diseases and pests, and lack of knowledge about organic cultivation methods. However, bolstered by consumers prepared to pay higher prices for organic products, organic fruit production is expected to rise in the long term. Source: Attache report AU0036.
China - Conventional fruit growers' main production inputs include pesticides and plant medicines (nutrients sprayed on the foliage). The number of applications can range from three to seven times per season, depending on factors such as weather and incidence of disease. Chemicals used to extend the harvest season are rare because growers believe yields would be adversely affected. Fertilizer usage is not great among deciduous fruit growers due to its expense and the fact that a sizable percentage of apple and pear trees in China are grown on uneven, sloping land which sometimes results in high wastage rates.
Despite continued dependence on chemicals for growing deciduous fruit in China, the Ministry of Agriculture (MAF) is promoting decreased use, citing the growing importance of environmental protection. In Shandong province, for example, officials are encouraging more bio-friendly methods of disease and pest control. MAF also states that no genetically modified deciduous fruit currently is grown commercially in China, but that research in this area could be occurring somewhere in China. Source: Attache report CH0618.
France - Apples account for the largest share (22 percent) of fruit consumption in France. Apples have a good image and most consumers associate them with healthy eating and fun. France imports relatively few apples and the U.S. share of apple imports has remained at only1 to 2 percent over the past five years. Nevertheless, there are indications of niche market potential for U.S. organic apples, especially for Red Delicious and bi-color varieties. French organic apple production is low and organic apples are often not readily available through large retail chains or the catering sector. Generally, due to their higher price, organic apples are more likely to be purchased individually for snacking. The high price means that import duties will have a smaller impact on the final price to the consumer. Source: Attache report FR0025.
Netherlands - Today, more than half of the apple and pear orchards in the Netherlands are managed under "environmentally friendly" methods that minimize use of chemicals and encourage pest control through natural methods. Organic apple production lags behind other European Union (EU) countries like Italy and Germany, but it is growing. In 1999, ten farms began growing organic apples with a once-only subsidy of $US884 per acre, and this year, there are 40 in production. One distributor, Odin, markets organic yellow apples to health food shops, and through produce subscription schemes. The company also exports to the United Kingdom (UK), but because of the small supply of yellow apples from July to September, Odin imports organic apples from Italy for re-export to the UK. Dutch supermarket chains are only interested in selling organic apples if the price decreases.
The Netherlands does not produce much apple juice. In 1999, organic juices had a market share of only 0.5 percent in the Dutch juice market, but that share is estimated to reach 2.5 percent by 2003. More growers are beginning to produce high quality juice, and locally-produced organic apple and pear juice is often labeled with its region of origin.
It is difficult for countries like Italy and Spain to compete with the Dutch pear sector on quality. Since organic pear production in Europe is low, organic pear production offers opportunities for Dutch growers. Source: Attache report NL0041.
Sweden - Sweden's organic apple and pear producers are eligible for government support at the rate of about $US425 per acre as part of a government goal established several years ago to convert 10 percent of all crop area to organic production by 2000. To date, however, very few fruit growers have taken advantage of the subsidy. The market for organic fruit is small but may expand as Swedish consumers are becoming more aware of the health and environmental implications of their food choices. Currently, about 80 percent of the commercial conventional fruit crop is grown using the principles of Integrated Production which aims at minimizing the risk for the environment and health. Such produce is marketed with the Svenskodlat (grown in Sweden) label to identify it clearly for consumers. This may be a factor contributing to the low demand for organic fruit at this time. Source: Attache Report SW0012.
[U.S. NOTE - To learn about and order the new comprehensive organic apple production manual published by the University of California and USDA's Sustainable Agriculture Research & Education program, click here.]
3. Organic News From New
Zealand
Organic
Certification - Spurred by the growing number
of farmers converting to organic production methods, a new
certifier recently began operations in New Zealand, bringing the
total number of certifiers in that country to four. Bio-Gro
is the best known and certifies more than 700 farmers and
processors with a turnover of about US$430,000 annually, 60
percent of which is exported. Agriquality, an
established firm that has long been involved with testing,
analyzing and quality assurance systems, recently established Certenz,
an independent organic certifier. Both certifiers are ISO65
compliant, a necessity when certifying product for export to the
EU and Japan. Demeter, an established world wide label,
is used by the Biodynamic Farming and Gardening Association. The
newest certifier is Aotearoa which serves small-scale
farmers growing for the domestic market.
The New Zealand Primary Production Select Committee is studying organic agriculture. The government's role will be to provide a framework for the most efficient use of New Zealand's resources while letting the market determine the best mix of food production methods. The New Zealand organics industry has asked the Ministry of Agriculture to develop a national certification program that would cover exports and allow certification to third country requirements. Source: Attache report NZ0047.
Organic Lamb - A North Island meat company, Affco, is exploring the possibility of supplying organic lamb to Britain through unused Argentine EU quota. New Zealand's annual EU quota of 226,700 tonnes is normally filled by New Zealand exporters, but British demand for organic lamb opens up the possibility for Affco to export free-range, organic-certified Argentine lamb through an Argentine company. Argentina had 20,000 tonnes of unfilled EU quota. The possibility of such a venture arose with the opening of an Affco office in Buenos Aires in May. The Argentine Government would have to approve use of the quota. Source: Attache report NZ0050.
Organic Kiwifruit - Zespri, New Zealand's kiwifruit marketer, is forecasting a full year net distributable return of US$185 million for the 2000/01 year, up 4 percent from the previous year's US$178 million. This equates to an average return of US$2.92 per tray compared to US$3.40 in the 1999/2000 season. The first forecast of the season is based on a total crop of 66 million trays, up considerably from the 54.2 million-tray crop last season. The forecast return reflects the impact of generally slower sales for the season to date in most markets, except in Japan where ZESPRI GOLD sales have been outstanding.
Challenges have come from the late exit from the market of Italy, competition from Chile, and customer and consumer resistance to the disproportionately large volume of small sized GREEN and ORGANIC kiwifruit. The lower average price of US$2.84 is forecast for GREEN kiwifruit compared to last season's US$3.39 due to high volumes of small sized fruit at retail, despite very high prices for the small volume of large sized fruit.
Organic kiwifruit prices have also been affected with the forecast average return per tray slipping from US$4.28 to US$3.03 as a result of a big increase in volumes of small sized fruit. Another key factor has been that a smaller percentage of the bigger crop has gone to the high earning Japanese market this year where over 80 percent of organic shipments have been fumigated, causing retailers to either delist the product or run minimal programs. Source: Attache report NZ0050.
4. German Subsidies for
Organics
By the end of 1998, there were 9,213 organic farms in
Germany which together cultivated 416,000 hectares (1.28 million
acres) or 2 � percent of total German agricultural land. Organic
and conventional farmers operating similar sized farms are
financially comparable, but a larger share of organic farmers'
income is due to higher subsidy levels. Organic farmers receive
subsidies that are about US$104 per hectare (US$42 per acre)
higher than those offered to conventional farmers. Without this
higher level of support, most organic farmers would not survive
since average per-farm income would be about US$6,150 lower. Source:
Attache report GM0034,
a comprehensive report based on the Ministry of Agriculture's
Annual Report for 2000 on the German agricultural sector.
5. South Africa
Developing Organic Standards
The South African National Department of Agriculture
(NDA) has produced a first draft of regulations on organically
produced products. The regulations are based on the International
Federation of Organic Agriculture Movements (IFOAM) standards and
EU regulations, and cover crops, livestock, products from
bee-keeping, and processed products for human consumption. The
organic regulations pertain only to the domestic market but will
be adapted based on acceptance in export markets. Source:
Attache report SF0028.
6. Trends
Population
Trends Will Shape Future Markets - According to
the U.S. Census Bureau, the world's population at the dawn of the
21st century reached 6 billion people, up 1 billion
since 1987, and double what it was in1960. Demographers estimate
that by 2050, more than 9 billion people will inhabit the planet.
The U.S. population, now estimated at 276 million, is expected to
grow by 128 million or 47 percent by mid-century, but elsewhere,
the increase will be more dramatic. As a share of world
population, Europe may shrink by almost half, from 12 percent to
7 percent, while Africa may grow from 13 percent to 20 percent
from now to 2050. The share for Asia, North America, and South
America will likely remain at about 60 percent, 8 percent, and 5
percent, respectively. As urban migration continues, a greater
share of the population will tend to be concentrated in large
urban areas in Africa and South Asia, bringing both challenges
and opportunities for U.S. exporters. Source: AgExporter
magazine, September 2000.
Japan's Booming Fresh Sprout Demand - Local Japanese sprout growers are reporting brisk sales of fresh sprouts, particularly broccoli, mustard, and cress varieties. Grown from U.S. and Italian seeds, the sprouts have been retailing for US$0.94 to US$1.40 per pack at Tokyo supermarkets. Produce retailers say recent news reports suggesting that sprouts can reduce the risk of cancer and are rich in vitamins (particularly A and E) and minerals are contributing to the demand. Source: Attache report JA0104.
7. New Attache Reports
Although the following reports do not deal specifically
with organics, they may contain useful information to U.S.
producers and exporters of organic products.
8. USDA Awards Research
Grants
USDA recently awarded $113 million in competitive
research grants under the Initiative for Future Agriculture and
Food Systems to more than 500 scientists and educators searching
for science-based solutions to critical emerging challenges in
fields such as genomics, biotechnology and natural resource
management. One organic-specific project was funded
("Revitalizing Small and Mid-sized Farms: Organic Research,
Education and Extension"), as were several projects that
deal with small-scale farming issues. For more information see USDA
press release 0308.00. For a complete
list of funded projects see: www.reeusda.gov/ifafs
USDA also awarded 12 matching grants under the Federal-State Marketing Improvement Program totaling nearly $600,000 to support agriculture market research and demonstration projects. The grants will be used to improve marketing systems for food and agricultural products or to identify new market opportunities for farm products. Among the projects approved are:
Source: USDA press release 0336.00.
9. Upcoming Opportunities
in Europe For U.S. Exporters
Feb. 13 - 18, 2001
U.S. ORGANIC EXPORT INITIATIVE TRADE MISSION TO THE EU
will attend BIO FACH in Nuremberg, Germany for the third
consecutive year. The mission is composed of 50 companies that
exhibit in the U.S. Organic Pavilion. BIO FACH attracted 22,000
visitors and 1,444 exhibitors in 2000, making it the world's
largest organic trade show. The cost per company (excluding
hotels, airfare, meals, and freight) for a 1 x 2 meter display
area and counter in the pavilion is $500. Included will be a
seminar where companies will discuss import and marketing issues
with local importers and USDA representatives. A unique feature
of the pavilion is the availability of interpreters for five
European languages and complimentary lunch served on site. For
more information, visit http://www.susta.org/generic/organic.stm
or contact Nishi Whiteley at the Texas Department of Agriculture
at 512-463-5197 or E-mail nwhitele@agr.state.tx.us
Mar. 25-28, 2001
IFE 2001 - International Food & Drink
Exhibition, Excel Docklands, London, England (IFE 2000 is a
USDA-endorsed show). Contact: Gill Jefferson, Fresh RM, Tel: 011
44 20 7886 3000; Fax: 011 44 20 7886 3001; Web site: www.ife.co.uk
U.S. Agent: Bob Chang, Commerce Tours International
Inc., Tel: (415) 433 3072; Fax: (415) 433 2820; E-mail: Comtours@aol.com
IFE is the UK's leading food and drink trade exhibition. IFE '99 attracted 38,000 visitors, with 11 percent attendance from overseas buyers. The biennial event includes a U.S. Pavilion, an Organic Pavilion and a Specialty Foods section. This is a USDA-endorsed show and is particularly useful for new-to-market companies with shelf-stable or frozen grocery products. The U.S. Pavilion provides added benefits: a business lounge, USDA/FAS staff assistance, and a reception to facilitate contact with the UK trade.
Apr. 22-23, 2001
Natural Products Europe,
Olympia, London, England. Contact: Full Moon Communications Ltd.,
Tel: 011 44 1903 817301; Fax: 011 44 1903 817311; Web site: www.naturalproducts.co.uk
This will be the fifth year for Natural Products Europe which has grown from a small show held in a hotel to a major event held in the Grand Hall, Olympia, London. The show attracts UK buyers from health/natural food stores, independent grocers and multiple retailers wishing to source natural/organic food products, as well as vitamins, supplements, sports products, herbal remedies, alternative therapies and the like. The show is useful for U.S. companies specifically targeting the health/natural food store market and looking for an importer. Source: Attache report UK0036.
[NOTE: For an update on what major UK supermarket chains are doing on organics, see attache report UK0037.]
10. Upcoming Events
International - 2000
International - 2001
Domestic - 2000
Domestic - 2001
* Indicates a USDA-endorsed show.
ADDITIONAL RESOURCES
FAS's Trade Shows and Other Marketing Events site - a complete list of international food and trade shows including those for conventional products.
Organic Trade Association - comprehensive listing of organics/sustainable agriculture events.
National Organic Initiative - international promotional opportunities for U.S. growers/exporters of organic/natural food sponsored by State Regional Trade Groups.
| Compiled by Janise Zygmont, HTP/organics, Tel: (202) 720-1176 Fax: (202) 720-3799 zygmont@fas.usda.gov |
Questions? Comments? Contact us.
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