Price spike for organics

Processors such as Thomas Foods International and Teys Australia, and companies such as OBE Organic, are seeking more suppliers to meet burgeoning demand from health conscious consumers and those looking for clean, safe food.

Thomas Foods International beef manager Petar Bond says organics are the “fastest growing beef segment”.

The company began processing organic cattle in 2010-11 for the domestic market and export market in 2012-13, with the majority of suppliers having United States Department of Agriculture organic status. They have weekly kills at their Murray Bridge abattoir and have developed good markets into the US as well as Asia and the Middle East.

“The US is the biggest market for both prime and manufacturing-type cattle so the demand is there for both young cattle and cows,” he said.

He said it was great for producers to be enjoying strong returns but cautioned there was a risk Australia could price itself out of global market. 

OBE Organic general manager Dalene Wray said the Brisbane-based company grew slowly and continuously for the first 15 years but had seen exponential growth in the past couple of years. In her decade with the company, OBE has grown its kill numbers from about 200 head a fortnight to 335 a week. 

Their production “heartland” is still Qld’s Channel Country but they source cattle from Marree and along the Birdsville, Qld, to Strezlecki Track in SA and to the south-west corner of Qld.

 Ms Wray cautioned producers about converting solely for the record prices but said, in the long-term, organic producers should expect about premiums about 10 per cent above the Eastern Young Cattle Indicator. Pastoralists should treat the organic market as another marketing option such as Pasturefed Cattle Assurance Scheme and European Union accreditation.

Major retailers Woolworths and Aldi are leading the growth in the domestic market, along with a number of wholesaler butchers, but Ms Wray said there were many export opportunities through the US, Asia and Middle East.

“What we are seeing is they really want to hear producers’ stories and see photos of station life,” she said. “They want to know they are real people producing real food.”

Ms Wray has noticed a generational change with young producers more open to becoming organically certified.

“A lot of young kids are taking on properties and learning about the opportunities of organics,” she said. “Instead of saying ‘no-no-no’ they are saying ‘let’s consider it’.” 

OBE Organic is helping producers make the most of these premiums with a raft of initiatives to boost productivity and profitability, including a free two-day Grazing Best Management Practice Forum in Birdsville on September 27-28.

National Association for Sustainable Agriculture Australia operations manager Peter Hastie said there had been a noticeable jump in interest from beef producers and processors for certification.

“Supply is growing and, while it is one of the fastest growing sectors in the organics space in Australia, representing 32 per cent of the total export value for the sector, it is part of an industry that only represents 1.25pc of the entire Australia agrisector so, with demand across the organic space growing at between 15-25pc each year, there is plenty of room to move,” he said. 

The longest process is bringing the land component into organic certification. A total of three years, including a voluntary year and two in-conversion years, must be demonstrated. But Mr Hastie said recent changes could potentially reduce this time by one to two years if producers could demonstrate they have already managed their property or part of their property in accordance with organics.

A belief they cannot control predators with chemical baits may also deter some would-be organic producers but Mr Hastie said, under certain circumstances and for certain certification programs, approval can be given to use 1080 to contain wild dogs or foxes.

A change of mindset from conventional farming and an accurate informed understanding of what it means to produce organic beef cattle is key to succeeding.

BIRDSVILLE, Qld, pastoralist Janet Brook says organic status is not just about access to price premiums but ensuring greater market access.

Consumers are becoming more conscious of where their food is coming from, expanding the niche market.

“It is not just the Hormone Growth Promotant or chemical-free status of organics; the animal welfare and environmental aspects will become really important into the future,” she said. “There is a good price premium associated with the organic market but the discussions on going organic should also be about holistically managing the property.”

Janet’s parents-in-law were one of the founders of OBE Beef nearly 20 years ago and all the animals turned off the family’s 780,000-hectare property Cordillo Downs on the SA-Qld border are sold through the brand.

Mrs Brook says the pastoral zone is a “good fit for organics” but producers need to be proactive, rather than reactive, in their management such as weed control. It is also more difficult to buy in organic cattle so they ensure their herd running Herefords is conservatively stocked to handle dry seasons.

“You don’t have the tools available that most conventional producers have but if you have a really big problem you could use chemicals as long as you take that area out of organics for a certain time,” she said. “It is not completely inhibitive but you do have to think more about what you are doing.”