Agriculture: The organic market continues to gain momentum

The organic food business in Germany has probably continued to gain momentum after a setback during high inflation. “The sales figures for the first nine months of 2024 indicate an overall growth in the organic market of over five percent,” says a market report from the German Farmers’ Association at the turn of the year, which is available to the German Press Agency. The growth is approaching previous average growth rates of seven to eight percent per year.

There was particularly strong growth in packaged, longer-lasting organic goods, which include pasta, cereal, pastries and other finished products. According to industry experts, this is due to the fact that “the breadth of the organic food range in traditional supermarkets has grown,” says the report.

However, the organic fresh range, which had previously led the growth rates, recorded a smaller increase in sales, according to market research data. These include dairy products, meat products, fruit and vegetables.

Further upward development after recovery

The organic market in Germany, which had been spoiled for success for a long time, slipped into the red for the first time in 2022. Organic products, which usually cost a little more, were also affected by a reluctance to buy more expensive foods in times of high inflation. But the market has already recovered. According to the Federal Organic Food Industry, sales in 2023 increased by five percent to 16.1 billion euros.

“After the decline in 2022 and the stagnation in 2023, there will be an upward development in 2024,” says the farmers’ association’s market report. However, the development of organic markets and farm shops is a cause for concern. The organic specialist trade is no longer shrinking as much as in the crisis years of 2022/2023, but is continuing to lose market share to supermarkets, discounters and particularly fast-growing drugstores.

Organic acreage is only increasing slowly

Politicians are also focusing on more “organic” products. And what counts is how robust the business model is economically. The declared goal of the traffic light coalition, which has now collapsed, was to expand the organic share to 30 percent of the total agricultural area by 2030. Most recently it continued to rise, but only slightly to 11.4 percent as of the end of 2023. The number of organic farms even fell by 182 to 36,680, although the share of all farms still increased by 0.2 points to 14.4 percent . Organic farming is less affected by structural change than the industry in general, explained the Federal Ministry of Agriculture.

Farmers President Joachim Rukwied told the dpa: “We farmers are monitoring developments very closely.” The organic share is growing again, albeit moderately. “Market conditions and consumer behavior are crucial.” The Germans are currently buying heavily based on price again. And to change that, strategic sales promotion would be needed instead of political growth targets. One thing is clear: a lot for organic farming depends on what course the future government takes after the federal election.

The report by the farmers’ association shows trends in other areas of the entire agricultural market – in some cases also with an impact on shop prices:

After a long crisis, the pork market continues to be characterized by “longer stable price phases at a good level”. There was a slight increase in the number of pigs for the first time. Given increased production, prices could show “a slight downward trend” in 2025.

Beef production in Germany has shrunk this year, which can be attributed to reductions in animal numbers. A stable to slightly increasing demand for beef is expected for 2025, which should lead to a constant to increasing price level for young bulls.

The demand for poultry meat was consistently high in 2024, which was reflected in an increase in production of one percent. Chicken meat dominates with a share of 70 percent and per capita consumption has increased by one kilogram to 20.9 kilograms.

“The German apple harvest reached around 750,000 tonnes, its lowest level since 2017, which was mainly due to frost damage,” the report says. The strawberry harvest was at a low of 120,000 tons. The level of self-sufficiency with local fruit is almost 20 percent.

There was too much rain for vegetable farmers. Despite an increase in open-air cultivation area by two percent, the harvest volume was one percent lower than in the previous year. Imports of fresh vegetables increased by one percent. While tomatoes, cucumbers and peppers were imported in larger quantities, imports of onions and carrots fell.

According to the market report, per capita egg consumption rose to 244 eggs this year – eight more than last year. “The demand for organic and free-range eggs was particularly strong and continues to increase.”

The second half of the year saw “record butter prices,” the report says. The prices for cheese and other dairy products also rose. In addition to good demand, the reasons were, among other things, a decline in raw milk production and lower milk fat ingredients.

There will only be a minimal increase in global wheat production in 2024/25 at 799 million tonnes. In 2024, the EU recorded its weakest wheat harvest since 2012. “Overall, everything points to a tense but functional grain market that will continue in the future.”