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Global Organic Meat Supply Tightens
Surging
demand for
organic meats is causing global supply to tighten. A number of regions
are reporting undersupply due to organic meat production not keep pace
with demand.
The most affected region is North America where supply has been unable to meet
demand since the USDA implemented the National
Organic Program (NOP) in 2002. Organic meat products have been imported
into the US from Latin America, Australasia and Canada since.
Imports are increasing
at a fast rate with the volume of non-American
organic pork doubling in 2005
alone.
Western Europe is
also experiencing acute supply shortages. Organic meat supply has not
kept pace with demand with a number of countries reporting undersupply
this year. The organic beef and pork segments are the most adversely
affected with prices rising across Europe. Danish Crown, the largest
producer of organic pork, has reported a 36% price rise compared to last
year.
Facing high demand,
British retailers have started offering fixed
contracts to organic meat producers to secure supply. Sainsbury’s and
Tesco are giving meat producers contracts that guarantee fixed prices
over 5 years. Although the initiatives are gaining acceptance by organic
farmers, imports will continue to play an important role because of low
domestic production levels. Like the US, organic meats are imported from
a number of countries into the UK.
Organic meat supply is also tightening in regions like Latin America and
Oceania. Countries like Brazil and Australia
have export-geared meat industries with organic meats playing an
increasingly important role. Friboi, a leading Brazilian producer of
organic beef, is expecting export sales to triple
this year. High global demand is leading new organic meat
producers to spring up in countries like Chile and Nicaragua.
With demand for organic foods continuing to strengthen across the globe,
organic meat supply shortages are expected to continue in the
foreseeable future. Production will continue to
lag demand in most countries
because of the conversion period for organic products.
Some exporters will
find it difficult to meet supply gaps however because of the differences
in organic standards between regions. For instance, USDA standards for
organic meat products differ from those of the EU. Trade liberalisation
maybe removing tariff barriers however standards are becoming the major
impediment to free trade in the global organic food industry.
Related Reports:
#3002-44 The North
American Market for Organic Meat Products
#1202-44 The
UK Market for Organic Meat Products
Posted: July 11th 2006
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