2024: A Pivotal Year for Europe’s Organic Market

Did you know that Europe’s organic food market is facing some of its toughest challenges yet? From geopolitical conflicts to rising inflation and extreme climate conditions, 2024 has tested the resilience of this sector like never before. Yet, despite these hurdles, the market is finding ways to bounce back, offering fresh potential for long-term stability and growth.

What is the future of organic farming in these new circumstances? While many are optimistic, the reality is that the crisis has already led to the bankruptcy or financial struggles of some of the major European organic players. How will the market respond, and what can we expect moving forward?

Organic Food Market Recovery and Prices

Following stagnation and a decline in demand in 2022 due to inflation and rising living costs, 2023 and 2024 have witnessed a modest recovery in the organic food market, especially in Western and Northern Europe, according to our research amongst big EU wholesale buyers. Key drivers of this recovery include rising retail prices and an increased presence in discount chains and the organic catering sector.

Historically, prices for organic crops have always been higher than for conventional crops. Prices for conventional crops prices are increasing, mainly due to rising input costs in conventional agriculture. However, the price gap between organic and conventional oilseeds (such as sunflower, flax, and soybeans) remains significant.

Our overall impression, based on extensive market research, is that in the second half of the year prices for organic agricultural products have increased by 5 to 20%, especially for high-quality goods, measured with protein level, test weight (kg/hl), impurity levels, moisture content, oil content, and other parameters.

The Impact of Climate Change and Geopolitical Situation on the Organic Food Sector

Climate change and geopolitical instability are shaping the organic food sector in the EU. Although the share of organic agricultural land in the EU reached 10.5% in 2022—with 45% of this land dedicated to arable crops and the remainder to pasturelands and permanent crops—uncertainties arise from uncontrollable factors. Northern and Western Europe have experienced excessive rainfall, while severe drought has struck Southern and Eastern Europe, adversely affecting the yields and quality of key crops. Additionally, regional conflicts are disrupting the European organic raw materials market, as reduced production areas (e.g., in Ukraine) and complications in food supply chains hinder supply.

Changes in Consumer Habits and Retail

The stabilization of the European organic food market is largely influenced by major retail chains and private-label (PL) brands. Large organic organizations and companies supply discount retailers, making organic products more accessible and affordable. In Western Europe, consumers are increasingly willing to swap well-known premium organic brands for cheaper alternatives under retail brands offered by major grocery chains.

However, the growing presence of discount retail chains also presents challenges, as the constant demand for lower prices further squeezes profit margins, affecting farmers, who face intense pressure to cut costs.

Plant-based diets are gaining popularity, driven by their health benefits and positive environmental impact, which, in turn, boosts demand for organic products. European consumers are increasingly paying attention to food ingredients and origins, prompting a shift from artificial to natural ingredients. The plant-based alternative sector continues to expand steadily, reflecting this growing trend.

Meanwhile, the rise of local distribution networks and small-scale sustainable farms is bolstering domestic organic food production, especially in Southern Europe. Models like Italy’s “Bio-districts” are gaining traction, often integrating tourism and cultural events with organic farming.

LoginEKO’s Organic Crops and Organic Food Market

LoginEKO’s 2024 harvest set a record in both quality and yield, even during an exceptionally dry year, demonstrating that organic farming’s sustainable model is particularly advantageous in crisis years—whether caused by economic or climate challenges. Organic agricultural production is generally believed to be more expensive due to its labor-intensive nature and lower yields. However, this year we have demonstrated that large-scale sustainable farming can be both efficient and viable. Additionally, organic practices make more effective use of resources, supporting long-term sustainability.

This efficiency contributes to long-term sustainability and environmental health, making organic farming an attractive option. Strategic crop rotation sequences, green manure, mechanical weed control, and a focus on soil health have made a significant difference, resulting in over 8,700 tons of high-quality organic products in 2024.

To adapt to changing market conditions, we have focused on the following strategies:

1. Targeting Premium Standards: BioSuisse Organic and Naturland

Orienting towards narrower markets such as BioSuisse Organic and Naturland has proven to be a successful approach for marketing our 2024 products. These standards, which impose stricter regulations on organic production, not only ensure higher demand and prices but also help overcome the reduced interest in our products due to the lack of EU origin.

2. Strategic Pre-Contracts and Spot Market Trading

Potential buyers recognize the advantages of our model and express interest in our products at an early stage, well before harvest. Proximately 25% of organic products were pre-contracted through futures agreements, helping us mitigate risks and maintain previous market positions. We opted not to commit larger quantities under futures contracts, anticipating price increases post-harvest—a decision that has proven correct. The remaining stock will be traded on the spot market to maximize commercial conditions. More information about currently available quantities can be found on the wholesale page of our crops.

3. Shifting Crop Focus to Meet Market Demands

Changes in crop structure were made to establish a profitable model for sustainable agriculture. We increased the share of more market-attractive crops in our rotation, particularly organic sunflower, oats, chickpeas, peas, and flax. Demand for these crops has been stable for several years, with the price gap compared to conventional products being particularly significant. Traditional crops like wheat and rye have been given a lower emphasis in our current production strategy. For crops such as wheat, corn and rye, selling in Western Europe is very challenging, primarily due to restrictions related to the non-EU origin of the goods (our farm is in Serbia). Additionally, the insufficiently developed processing capacities in Eastern Europe further limit sales opportunities.

5. Strengthening Trust Through Advanced Traceability

Our advanced traceability system, collecting data from seed to storage, provides a competitive edge by enhancing partner trust and transparency through the open sharing of information.

Pioneering Social Standards with Naturland Fair Certification

Additionally, we are pursuing certification under new social standards, such as Naturland Fair, which integrate organic farming, social responsibility and fair trade principles.

Shaping Tomorrow’s Organic Market Today

As 2024 progresses, the European organic food market faces challenges that test its resilience.  The drivers of the growth of the European organic food market include: the expansion of organic agricultural land in the EU, an increasing emphasis on sustainability, greater health awareness, the benefits of plant-based nutrition, and support from governments and EU institutions – both financial (subsidies) and non-financial (such as  education and regulation).

Consumer habits are also shifting towards sustainability.  Despite economic pressures, the demand for organic grains, oilseeds, and legumes remains steady, as more consumers prioritize healthy food options.

Although geopolitical changes and climate risks pose additional obstacles, the stable support of EU policies and adjustments in import flows provide a solid foundation for the continued growth of the organic sector. This trend is expected to persist in the coming years, as demand for sustainable food products continues to rise.

The EU’s goals, such as increasing the organic farming area to 25% by 2030, demonstrates its commitment to building healthier and fairer food systems. Considering all these factors, European organic agriculture is not just facing challenges—it’s paving the way toward a sustainable future. What role will you play in this evolving landscape?