"Prices are generally good," Pieter Declercq, organic product manager at the Belgian cooperative REO Veiling said of organic winter vegetables in mid-January. He notes that the frost and the harvest uncertainty it brings for the winter crops still in the field is causing some nervousness in the market. Pieter expects good pricing for the rest of this season.
Positively affecting pricing
"The extreme weather is causing occasional inferior yields, but that positively affects pricing." He does not foresee any supply issues, though. "Availability remains guaranteed, partly because many growers have harvested their organic winter vegetables. We'll have to wait and see how the frost will impact crops still in the field," Pieter says.
He adds that, until mid-January, the abundant rain minimally limited those products' availability, but the picture differs per crop and region. "It's more problematic for some crops. For example, we hear many organic potatoes and chicory roots haven't been brought in. And in some regions, there are still quite a few cabbages and parsnips in the ground. It remains to be seen how that will affect availability and pricing later."
What is clear is that the heavy rains have impacted the quality of organic vegetables. "Brussels sprouts' quality, for instance, is very rapidly declining. The short frost period in early December also irreversibly damaged things like celeriac and green celery," Pieter explains, noting, though, that that does not apply to leek cultivation. "Organic leeks went into the winter very healthy and robust and had remarkably few disease problems."
Endive is one of the main organic products of REO
Balanced
According to the product manager, the market is balanced. "Supply is better aligned with demand, which means you can get better prices from the market. After peaking in the pandemic, organic vegetable sales plummeted, influenced by inflation and other factors. That's especially noticeable in organic mushroom sales, where our Tomabel label has a large market share. Last year-end, demand temporarily exceeded supply. Colleagues and we noticed a general shortage in, say, organic brown mushrooms," Pieter continues. REO Veiling has observed organic winter vegetable day trading - which it outsources to Bio Vibe - generally rise in 2023. "After a low point in 2022, organic produce day trade sales via Bio Vibe from our REO partners picked up again in 2023."
Costs for growers
That is a vital aspect, given the increasing costs for organic growers and how hard it is to pass those on integrally. "Organic product prices do rise, but generally not as much as mainstream ones. That reduces that price gap. So, increased costs for things like labor and mechanization will cut more into organic growers' operating profit," Declercq knows.
Yet, he does not foresee REO organic growers switching to organic crops, as with some French growers. Pieter blames that on the way organic sales channels are set up. "Traditional supermarkets remain an important sales outlet for REO Veiling's organic vegetables. That gives growers several certainties price and volume-wise. And supermarkets get vegetables from specialized organic growers who can guarantee quality, especially continuity. It's a win-win."
Organic mushrooms, are responsible for just under 5 percent of REO Veiling's total turnover
Interesting combination
Also, there is a focus on day trading via Bio Vibe. "Combining firm annual contracts with well-organized day trade is interesting for REO organic growers. The deals often have a base already, giving growers security: they're sure of prices and volume for the coming growing season," Pieter points out, revealing that organic fruit and vegetable sales account for just under five percent of REO Veiling's total sales, with mushrooms and chicory leading the way.
Weather conditions affect not only organic vegetable pricing but also, Pieter determines, that of mainstream vegetables. Prices in that segment were quite high in mid-January, which has an unexpected side effect. "The price gap between organic and mainstream is now less pronounced or even zero."
Back to organic
That offers opportunities, says the product manager. "Lower prices often made non-avid organic buyers choose conventional products. Now that those are also more expensive, I'm sure these kinds of shoppers will more likely gravitate back toward organic products. Of course, this is a temporary, seasonal effect, but hopefully, these types of consumers stay with organic," Declercq continues.
He does see the necessary challenges in this, with organic products' prices being the largest, but he thinks government promotion of these products could help sales. Pieter foresees organic fruit and vegetable sales to grow over time. "Anything sustainable and green is very 'in' now, even more so in urban settings. That should affect organic products. The only question is how fast that will happen."
Packaging
One of the future challenges is the European ban on fruit and vegetable packaging looming over the market. "Organic products are often packaged in a way that differentiates them from mainstream ones in the same store. Things have, however, remained quiet for over a year, and investments in fruit and vegetable packaging have been postponed. The range of sustainable packaging is extensive, but these cost significantly more. That could be just that extra blow for many organic vegetables," Pieter concludes.
Pieter Declercq
Pieter.Declercq@REO.BE
REO Veiling
Oostnieuwkerksesteenweg 101
België – 8800 Roeselare
Tel. +32(0)51 23 12 11
info@reo.be
www.reo.be