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A greater supply of organic products than the demand, good harvest years across Europe for the last two years, and less interest in dairy products have led to a halt in the growth of the organic industry.
The demand for organic products has stagnated in recent years after several years of strong growth.
Prices have dropped, organic food is sold as non-organic at a lower price, and certified organic farmers have lost 40 percent, or SEK 700 million in revenue, in the last 12 months. It shows a report produced by the independent analysis company Agrovektor, on behalf of the Swedish Board of Agriculture.
– The market has not increased to the extent that raw material production has increased. Consumption has increased slightly in Sweden, probably a couple of percent during this period, but raw material production has increased much more than that, especially in the outside world around us, says Cecilia Ryegård, CEO of Agrovektor.
Therefore, a trend is now visible in which more farmers stop producing organic products and return to conventional production. Others reduce eco-production and hardly anyone changes business.
– We are already seeing examples of organic farmers who review their production and some end up with organic production. Our forecast in the future is that we will see it in the statistics for our area in Sweden from next year, says Sofia Sollén-Norrlin, operations manager of the industrial organization Ekologiska Lantbrukarna.
– Currently, the payment to organic farmers is very low. It is not much more profitable than conventional production, but it is clear that it is more expensive to do more for the environment and animal welfare. You have to charge for that, go on.
At the same time, Sweden has set a national goal of increasing the share of organic farmland from 20 to 30 percent over the next ten years.
– The problem is if the market does not keep up. If this policy goal is achieved, it will mean an increase in raw materials of about 50 percent from current levels and it is currently difficult to see how those volumes will be allocated, says Cecilia Ryegård.
