The head of the European Commission’s organic unit, Elena Panichi, has said that organic farming can potentially leave agricultural producers with a higher margin than that compared to conventional methods – should the price they receive compensate them for lower yields. The topic of switching to organics was under discussion at a recent webinar.
In Panichi’s view, “The yield gap[s] are possibly compensated by higher prices because, in fact, premium prices can go 150% compared to conventional farming.”
Good Herdsmen’s John Purcell shared that the organic price premium currently being paid to Irish organic beef finishers is 15% more than the price their animals would achieve on the grid in a conventional factory. The price of organic beef relative to that of conventional beef fluctuates, having been approximately €1/kg when beef prices were lower, the representative of the beef processor said.
Purcell highlighted that, “Everyone is asking what is the premium, but when conventional prices were on the floor, nobody was asking what the premium was – it was a euro a kilo, roughly, of a difference. Now it is about 15% currently, but it is so hard to follow. We try to park the conventional prices.”
Panichi added that that some organic products had better market penetration than others, and that meat was one of the food classes with poor market penetration across the EU.
“The highest penetration of organics is in eggs, fresh fruit, vegetables and dairy, while there is still low penetration for beverage[s], meat and processed products.”
It has become evident that consumers are willing to pay higher prices for organic foods out of environmental and food safety concerns arising from the use of pesticides and genetically modified organisms (GMOs).