Organic farming continues to grow strongly as consumption of organic foods becomes more mainstream.
Melbourne, Australia (PRWEB) November 15, 2013
The Organic Farming industry is blossoming and has been one of the economy's best performing industries over the past five years. Global demand for organic products is rising with increasing health consciousness, growing concern for the environment, income growth and the increased convenience of organic food. Over the five years through 2013-14, industry revenue is expected to grow by an annualised 12.1%. Revenue is forecast to reach $655.3 million in 2013-14, up 11.2% from the previous year. The industry provides a wide variety of products, with the key performers being beef, fruit, vegetables and poultry. IBISWorld industry analyst Emily Witham states, “Australia has the largest area of organic farmland in the world at an estimated 12 million hectares, with the majority of this land comprising large rangelands for organic cattle production.” However, the industry is comprised mainly of small operators, which has contributed to difficulties in providing consistency in the quantity and quality of produce. Despite some consolidation of operators over the past five years, the industry remains highly fragmented and organic farming techniques are still not as efficient as conventional farming. Despite this, the Organic Farming industry continues to grow strongly as organic consumption becomes more mainstream. Retailers, including restaurants, are selling a growing number of organic products as they attempt to attract increasingly health-conscious consumers. Favourable weather conditions have helped to reduce the price of organic produce.
The industry is expected to continue to grow strongly over the next five years, driven by strong demand in domestic and export markets. According to Witham, “The increasing participation of supermarket chains in the provision of organic products, downwards pressure on prices from growing economies of scale in production and benefits from improvements in the certification of organic produce will drive consumer demand.” While some supply issues will hamper the industry, a greater level of technology employed by farmers and innovation in products and practices will help organic farmers meet demand.
The low level of market share concentration in the Organic Farming industry corresponds with the low level of concentration in the agriculture sector in Australia generally. The level of concentration in the industry has increased over the past five years due to the increasing size of organic farms in Australia. Despite the increased concentration, the top five operators in the industry still generate a small percentage of the industry's total revenue. The level of concentration by segment varies, but falls once a segment has become established. For instance, the concentration in the well-developed vegetable segment is low, while the concentration in the very small aquaculture segment is higher due to the entry of few farms at this stage. For more information, visit IBISWorld’s Organic Farming report in Australia industry page.
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IBISWorld industry Report Key Topics
The industry includes farms that primarily produce organic fruit, vegetables, grains, other crops or livestock. Organic farming does not involve the use of artificial chemicals, pesticides and fertilisers, or genetically modified organisms. This report focuses on organic producers that are certified organic by any of the organic certification organisations.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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