Farming News - Increased gross margins for UK organic arable
Increased gross margins for UK organic arable
Demand for organic food has never been greater, and with growers able to achieve gross margins over 40% higher than in non-organic systems, is now the right time to look at organic arable production?
Explaining the opportunities organic arable offers at OF&G’s National Organic Combinable Crops (NOCC) conference at York Grounds in Hull on Wednesday 3 July, Steven Jacobs, business development manager at OF&G (Organic Farmers & Growers), said variable costs are typically 40% less, and the working capital required significantly lower, in organic production systems.
“This allows for much improved gross margins compared to a non-organic rotation, which is further enhanced by incorporating livestock into the system as a ‘fertiliser’ and to provide potential income during building soil fertility, as part of the crop rotation.
“Getting the production system right is the first step. However, careful wholesale marketing is fundamental in realising the full potential organic cereal production can offer,” he emphasised.
“Organic arable farming has clear challenges and may not be right for everyone. It isn’t simply farming without artificial inputs, it involves changing how you think - you must convert your head, not just your land.”
The largest farming event in the organic calendar, NOCC addressed some of these challenges with around 200 people from across the food and farming supply network, including organic and non-organic farmers, processors, retailers, academics and plant breeders coming together to discuss how to continue sector development.
Kicking off this year’s event was baker Kimberley Bell (Small Food Bakery), winner of the 2018 BBC Food and Farming Producer Award. She explained her desire to forge direct relationships with farmers and the need to source high quality UK ingredients to satisfy customer demand and build resilience in a changing marketplace.
Ms Bell is baking with ‘lesser known’ varieties and ‘undervalued’ food crops such as barley, to produce top quality food, which an increasing number of chefs and bakers are looking to explore.
Also speaking at the event was Dr Ambrogio Costanzo, principal crops researcher at the Organic Research Centre (ORC). He highlighted the scope for growth in the sector and explained the research the ORC is doing on variety selection – one of the biggest challenges for organic cereal growers.
“Organic cereals account for just 1.2% of total combinable crops in the UK, however the UK is less than 30% self-sufficient in organic grain, meaning there’s a gap in the market,” he said. “To be able to grow the UK organic arable sector, we need varieties bred for organic systems.
“Genetic diversity and evolutionary breeding are key to achieving better disease resistance and hardier plants in the field,” said Dr Costanzo.
Dr Simon Oxley, head of crop production systems at the Agriculture and Horticulture Development Board (AHDB), described ways to improve not just variety performance in the field, but factors that influence resulting cereal product quality, such as in flour and baked foods.
“I’m seeing many innovations coming through in new cereal varieties that could not only improve yield potential, but also quality and weed suppression, which could work well in organic rotations.”
But the issue then is improving dialogues in the marketplace, explained Andrew Trump, managing director at Organic Arable. “Many processors demand single specific varieties and we therefore need to educate buyers about what organic systems can deliver – this is different from conventional systems.
“We have young, engaged, ethical consumers out there who want to understand not only about the products but also the supply chain that sits behind them.”