• The global organic food market is estimated at £70bn, with the UK sector ringing in at £2.3bn
• There are opportunities for organic arable producers in the ambient grocery sector, although this is dependent on the UK improving its processing infrastructure
• In the future, technology should play an increasingly important role, with areas such as nutrient assessment in fields made easier

The global organic food market is currently estimated to be worth US$90bn (£70bn) and represents around 4% of all food and drink sales around the world. In the UK, the market is worth £2.3bn but represents just 1.5% of the British food and drink sector.

In 2018, supermarket sales of organic food and drink rose by 3.3%, according to the Soil Association, while sales among independent retailers increased by 6.2%.

The fastest retail growth has been among organic home-delivery schemes: last year their revenues increased by 14.2% and the Soil Association expects this figure to reach 25% by 2023, driven by the trend towards home grocery delivery, as well as consumer demand for box schemes with their lower levels of packaging.

Dairy accounts for 28.4% of the UK’s organic food and drink sales, with fresh produce making up 24.3% and meat, fish and poultry 10.1%.

The amount of land devoted to organic agriculture – including land under conversion to organic – fell by 8.4% to 474,000 hectares. While this is the lowest level recorded since official statistics began in 2002, Defra (the Department for Environment, Food and Rural Affairs) says that much of the recent decline has been the result of a decrease in the quantity of land with low production values, such as temporary pasture and woodland.

Source: IFOAM, 2018

The amount of land devoted to cereals, other crops, and fruit and vegetables has not changed to a significant extent.

Organically farmed land made up 2.7% of all agricultural land in the UK in 2018, down from 2.9% in the two previous years. The amount of land in conversion to organic – a process that typically takes two years – has risen every year since 2015, representing 32,900 hectares in 2018.

The number of organic producers in the UK was 3,544 in 2018, an increase of 2.3% on a year earlier. Defra recorded a fall in the number of organic processors in 2018, from 2,977 to 2,569: however, this is at least partly due to a new approach to classifying processors which means that the 2018 figures are not directly comparable with those from earlier years.

In 2018, 44,500 hectares of land in the UK were given over to growing organic cereals and other crops – including land in conversion to such a purpose – which represents 9.4% of all organic land in the country.

Premiums on organic crops compared with the prices paid to conventional growers range from 50% to 100%. As a snapshot, in November 2019 organic wheat feed is trading at £250 per tonne compared with £146 for non-organic; for barley feed, the respective figures are £245 and £130.

Source: Defra

Lee Holdstock, senior business and trade development manager at the Soil Association, says there are significant opportunities for UK organic arable producers in the ambient grocery sector (food that is processed so it can be safely stored at room temperature). “The sector is very strong at the moment but it is dependent on import – we still import a significant amount of organic arable that goes into cereal products, as well as organic fruit and nuts,” he says.

The ability of farmers to exploit this opportunity, however, depends on the UK’s ability to develop its processing infrastructure to a greater degree.

Organic arable markets are currently stable following the latest Brexit delay and the upcoming general election, according to broker Saxon Agriculture.

Sales of organic fresh fruit, salad and vegetables increased by £15m in 2018, while a third of all new organic applications were for fruit and vegetables. Over the past five years, supermarket sales of organic fresh produce are up by around £70m.

In 2018, 11,000 hectares were devoted to the organic farming of fruits, nuts and vegetables, including land in conversion: this represents 2.3% of all organic land in the UK.

Premiums on organic fresh produce remain substantial: in November 2019, for example, non-organic white potatoes were selling at a maximum of £0.25 per kg compared with £0.82 for organic. Carrots were trading at £1.05 per kg for organic against £0.37 for non-organic.

In 2018, 364,000 hectares were given over to organic pasture, both temporary and permanent, not including land in conversion: this represented 77% of all organic land in the UK.

One of the most important trends of recent years has been rising domestic demand for organic eggs: this has seen the number of chickens rise steadily to reach 3.4m birds by 2018 – 42% of this total are laying hens and 56% broilers.

Organic poultry now makes up 1.8% of the total UK poultry population.

The price paid to organic egg producers reached £1.54 per dozen in August 2019, the highest level in five years. This compares to 80p per dozen for free-range eggs.

In August 2019, the average pullet price for an organic layer was £5.66 – this level has been stable since March 2018. For non-organic birds, the price was £4.14.

The number of organically reared cattle in the UK rose to 324,000 in 2018, an increase of 10% on the previous year.

Source: Defra

In autumn 2019, reports suggested that prices for organic prime beef had weakened to some extent to around £3.88 per kg, partly as a result of increased supply. A potential shortage of supply for organic lamb heading into 2020 means prices should remain buoyant – although the potential impact of Brexit could change the picture.

The Soil Association notes that organic meat sales are strong, and that while many consumers have decided to reduce overall meat consumption, their approach is often to “eat less but better” – meaning a shift from non-organic to organic meat, in particular chicken, pork and even lamb.

Holdstock at the Soil Association says that technology has an important role to play for organic farmers: “Organic farming is future-facing from the point of view of what we need to do to farm sustainably, but also from the technology side.

“We are seeing the introduction of technology that helps farmers assess the nutrient balance in fields, and there is also the Innovative Farmers programme, sponsored by Duchy.”

This runs field labs around the country, which gives organic farmers the opportunity to conduct trials into new growing techniques, as well as to attract academics to look at any experiments with greater levels of scrutiny.

“This might look at everything from analysing animal feed to see what mixes of herbs can control worm burden in cattle, for example, to what propagation mediums are most effective in terms of germination rates.”

As with conventional agriculture, the organic sector faces a significant degree of uncertainty with regard to Brexit and the extent to which trade with the European Union, and even between mainland Britain and Northern Ireland, might be affected.

But a no-deal Brexit could be particularly harmful for organic farmers as this would probably mean that UK organic products would no longer be recognised by the EU until the UK gains third-party status.

There are also concerns over the possible impact of future trade deals, especially if they were to lead to an increase of low-cost imports coming into the UK market and/or a lowering of standards and food safety, neither of which would be good for the sector.