It’s an indisputable fact that organic farming is on the up, now more than ever. With sales of 8.2 billion euros in 2017, organic – “green gold” – is attracting growing interest among the major players in the agri-food and distribution industries.
The Carrefour group’s revenue from organics now stands at 1.23 billion euros, ahead of its main competitor Biocoop with 1.1 billion euros. Leclerc is in third place with 713 million, far ahead of System U (426 million), Casino (417 million), Monoprix (400 million), Intermarché (390 million) and Auchan (300 million). Speciality stores are also rejoicing in double-digit growth rates (30% for example for La Vie Claire and 20% for Léa Nature, Charles Kloboukoff’s group).
Industrial players are equally enthusiastic, as evidenced by Danone’s dramatic change of strategy. Having recently acquired Whitewave, the American organic and plant-based milk giant, the Danone group headed by Emmanuel Faber is positioning itself as the American market leader. This has cleared the way for Lactalis to get its hands on the American yogurt company Stonyfield.
Lured by false promises of a diet supposed to guarantee them better health, consumers are increasingly clamouring for organic. Regular reminders from the organic lobby sharp shooters about the supposed dangers of products from conventional agriculture, combined with the feverish enthusiasm of politicians for all things organic, maintains a very favourable climate for this farming method, offering a promising financial future for producers.
Except that…
If we examine in a little more detail what is happening in the United States, often a trend-setter for the Old World, there could be some clouds on the horizon in this beautiful clear blue sky. “Hampered by abundant production, destabilised by the rise of giant farms, competing with plant milks: times are tough for American small organic milk producers who are hunkering down hoping not to have to throw in the towel” notes AFP’s US correspondent in a briefing dated 13th March 2018.
“With current prices, I’m losing money,” says Spencer Aitel, a farmer with a herd of 55 cows in Maine (North East USA). He is not, however, a recent convert to organic. He has been organic since 1996, but he was forced to reduce his herd by 20% following a request from his cooperative. While he is able to remain calm and wait “Just till the crisis is over, it won’t be in 2018, but maybe in 2019”, younger farmers are more prone to panic. “A lot of them are trying to get out”
What is the explanation for this unlikely disarray? Demand has dried up (decrease in milk consumption, consumer hesitation in purchasing given the price difference between organic and conventional milk, respectively 5.29 and 2.79 dollars for a tetrapak of 1.9 litres in a New York supermarket) at the same time as new converts to organic farming arrived en masse adding to the volume of production. As a result, “Big buyers like Organic Valley or Danone imposed production quotas or warned some producers that their contract would not be renewed. ” A situation which seems unlikely in France!
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