ORGANIC farming has moved from the hippie communes of Nimbin and hobby farms of Gippsland into the boardrooms, bank accounts, farming empires and bottom-line strategic thinking of corporate Australia.
A new survey to be released today by IBISWorld shows organic farming is a $655 million industry, growing at a phenomenal 12 per cent a year.
Organic produce also has emerged for the first time as a significant export earner, particularly organic meat sold to the US, with total exports valued at $66m last year.
IBISWorld analyst Caroline Finch said sales of organic produce still made up only 1 per cent of all income to farmers at the farmgate.
But by 2018, the IBIS report predicts organic farming will be a $1 billion mainstream agricultural industry, driven by continuing consumer demand for food that is healthy, safe, chemical-free and grown in a manner that is kinder to the environment and animals.
“Organic meat has been the big growth areas; it is something Australian producers can do really well because a lot of cattlemen and sheep farmers in the rangeland and outback areas aren’t using chemicals in the first place,” Ms Finch said.
“This is a very attractive space for producers to be in — and they are responding to the consumer demand — because it is one of the few areas of agriculture where you know your buyers are prepared to pay a premium for the food you produce.”
However, the number of organic farmers has not jumped despite the rapid growth in the organic industry, driven by major supermarket corporations Coles and Woolworths — which sell 60 per cent of all organic produce in Australia — demanding larger, more regular and more quality consistent consignments of organic food.
To fill the gap, several corporate and large specialist organic producers have recently seized the opportunity to benefit from the higher prices paid by consumers for food grown without chemicals and fertilisers on officially certified organic land. Organic produce sells at between 1.5 and two times the price of conventionally grown food.
“Australia has the largest area of organic farmland in the world at an estimated 12 million hectares, with the majority of rangelands used for organic cattle production,” the IBIS report says.
“As the industry undergoes rapid change, the type of farmers is also changing; over the past five years larger organic farm businesses have emerged to meet the demands for organic produce by large retailers and supermarkets.”
One such rising organic producer is former Air France and Virgin international pilot Paul Martin. A former Broken Hill boy, he returned to the outback three years ago to become pastoral manager for listed agricultural corporation Tandou, running a flock of 7000 organic Dorper breed ewes on 111,000ha of certified organic lease land owned by the company near Menindee Lakes in far western NSW.
Every year, the company aims to sell 10,000 organic lambs to local and export markets — with some of its organic lambs ending up in Woolworths, and the rest in the US.
Hardy Dorper sheep, originally bred in South Africa, are ideal for outback conditions such as the grassy downs, billabongs, baked claypans and bluebush of Tandou estate because they shed their wool and don’t need to be shorn, and thrive in environments where merinos or other European meat sheep would not,
Mr Martin said his lambs are fetching $6.50 a kilo as organic sheep, compared with $6 for conventionally reared produce, almost a 10 per cent premium.
“It means we get abut $148 a head rather than $132; that’s a big difference when you are running a big operation like ours,” Mr Martin said yesterday.
“And by default a lot of this rangeland western division lease land is organic because there is no need for fertilisers or chemical to be used on this country, because we don’t need to dip, jet or drench Dorpers for flies, worms or anything because they are so hardy,” he said.
“So for a company like Tandou, running an organic sheep business to earn the price premiums there for both export and local markets from organics makes good financial sense.”
FTZ Price at posting:
54.0¢ Sentiment: None Disclosure: Not Held
(20min delay)
