01 October 1999
Under-supply makes organic livestock an option

By FW livestock reporters

WITH a milk price of 29.5ppl, pigs worth up to £170 each and supermarket backing, organic prospects are good. But with MAFF grants over-subscribed, is it worth converting?

It is an option producers aware of recent supermarket newspaper and radio advertising campaigns, including Marks and Spencer, may be encouraged to investigate.

M&S says organic food sales are booming, as it tries to expand it to 10% of total food sales.

But the market remains under-supplied and demand is growing, says M&S press officer Crispin Burridge.

“During the agricultural show season, we surveyed 4000 people and found that 19% eat organic food regularly, and 56% had purchased organic food.”

Producer price forecasts look rosy. “At some point they will flatten out. But for the foreseeable future, prices will be good,” he says.

The Organic Milk Suppliers Co-op is able to guarantee a price of 29.5p/litre for five years, says an OMSC spokesman.

This is based on its supply to Sainsbury which is seeing rapid growth in demand.

“OMSC continues to sign up both converted and converting producers. Supply is still short of demand.”

Thats despite doubling both its membership and milk production in the past six months.

Next year it needs 35 million litres more than it can supply in the year beginning April 2003 it could sell 125m litres more. “If youre thinking of converting, start now.”

Currently there is also more demand than supply in pig, beef and sheep markets, with fewer than 500 registered producers.

Organic Livestock Marketing Co-operative managing director Ralph Human expects beef supplies to be short for at least two years.

The cost of rearing makes beef cross calves expensive.

“With organic milk worth 29.5ppl, producers are unlikely to feed it to calves and imported organic milk powder is extremely expensive, making a 12-week-old calf worth £200-£230.”

But finishing capacity for hill produced organic lambs and beef stores is causing concern in Scotland and may depress prices, according to SACs David Younie.

In the past two years many hill farms have begun conversion. They will soon be selling store lambs, but prices may be disappointing because there are too few lowland farms converting to finish them.

But once this balance is redressed, and if export markets for lightweight organic lamb open up, chances of continued premiums are good, he says.

Organic finished pig prices remain good, but production has slowed to less than 500 a week, says Eastbrook Farms managing director Tom Finney.

Despite good price prospects, oversubscribed grants in England, and a likely oversubscribed grant fund in Wales, will limit opportunities for conversion.

In Scotland conversion aid is are still available.

However, Farm Consultancy Group consultant and organic specialist William Waterfield believes that some milk producers may be able to convert without grant.

“This will depend on borrowing and the production system: Those relying more on concentrates and maize will find changes needed considerable.”

Mr Waterfield recommends that producers contact MAFFs organic help-line for free advisory visits.

But he warns that European organic livestock regulations, due in August 2000, could have large cost implications for farms in conversion, “We wont know the details of these until December.”

With aid, it is relatively easy to convert, says Mr Younie. SAC has successfully converted a 200ha (500-acre) beef and sheep unit.

“Mixed and extensive farms can convert at low cost. Producers must review their individual circumstances.”

A lack of grants in England will mean only well-financed beef and sheep producers, with other sources of income or cash, can consider organic conversion, says ADAS organic specialist Richard Collyer.

In Wales the Organic Farming Scheme starts today (1 October) and producers are queuing up to apply. It will soon become oversubscribed, he warns.