In 2020, sales of organic food rose 15 percent to €2.37 billion, with over 80 percent of it sold through the traditional retail food sector. Nearly all Austrians purchase organic food, partly due to environmental issues such as climate change and loss of biodiversity. Even so, a risk of supply shortages, due to fewer farms converting to organic agriculture, may slow sales growth. About 23 percent of agricultural holdings in Austria are organic, managing about 27 percent of total agricultural area.
Starting January 1, 2022, control bodies need to issue organic certificates through the Trade Control and Expert System (TRACES) for organic products on the market in the European Union.
Draft regulations establishing an official certificate verifying the non-use of antibiotics in organic livestock are available for public comment until August 11, 2021. Such certificates would be useful for European farms interested in exporting livestock products to countries that do not allow use of antibiotics in organic production. If the regulations pass, the certificates would be available in January 2022.
A new GAIN report on the retail market in El Salvador says “Health and nutrition are no longer a main concern for only higher-income consumers. With the pandemic, more Salvadorans have become conscious of their health and are seeking products to boost it through good eating habits. Therefore, there is a stronger demand and potential for products that are made with more natural ingredients, organic, fat free/low fat, gluten free, unsweetened or reduced calories (including beverages).”
In an effort to reduce single use plastics, New Zealand intends to phase out the use of plastic produce stickers by 2023, a timeline that surprised some in the industry. At least one organic apple grower there has been using compostable stickers successfully for two years.
Health Canada offers a free self-paced Nutrition Labeling Online Course, which offers US-based exporters information on requirements for Canada’s nutrition labels. In addition, the US Department of Commerce’s International Trade Administration will host a webinar June 24 on the Canada Boarder Services Agency’s Assessment and Revenue Management Program (CARM), which will digitize and streamline customs procedures. CARM will be mandatory for all US non-resident importers beginning in the spring of 2022.
Starting July 11, the United States and European Union are suspending tariffs imposed as a result of an ongoing aircraft subsidies dispute. The 15%-25% tariffs targeted a wide range of agricultural goods, including cheese, nuts, produce, alcohol, and more. The agreement is for a five-year suspension of the tariffs. A full list of the US agricultural items covered in the agreement can be seen in this GAIN report.
The Organic Trade Association, based on input from its members, raised several issues with USDA and Mexico’s National Agro-Alimentary Health, Safety and Quality Service (SENASICA) concerning Mexico’s new organic regulations. US organic exports for sale in Mexico must be certified to Mexico’s Organic Products Law after December 31, 2021, an extension of the previous June 26 deadline. Key topics for OTA include using stickers to adapt labeling for Mexico, identifying products in the stream of commerce before the December 31, 2021 deadline, training for retailers on the deadline, how to identify/segregate imported ingredients for products to be exported from Mexico, and waiving on-site inspections during the pandemic.
New stricter regulations for organic foods in South Korea will cover processed foods with over 70 percent organic ingredients and those which claim ‘no pesticides introduced.’ Only certified foods will be allowed to use environmentally friendly language such as ‘eco-friendly’ or ‘pesticide free.’ Despite high prices, South Koreans continue to seek out organic products, which are seen as healthy food. Popular products include processed fruit and vegetable products, fresh fruits and vegetables, juice, dairy, baby products and snacks. Imports comprise over 70 percent of ingredients in locally-produced processed products. The government has been encouraging farmers to shift to organic farming to help meet demand.
US organic products have additional time to meet Mexico’s requirement for certification to its Organic Products Law. Mexico’s agriculture secretariat extended the deadline through December 31, 2021. Beginning January 1, 2022, US operators must be certified by a certifying body accredited by Mexico’s National Service for Animal and Plant Health, Food Safety and Quality (SENASICA) in order to sell organic products in Mexico. For more details on Mexico’s organic products law, see the USDA GAIN report.
Despite a few recent changes to Korean Ministry of Food and Drug Safety policies that allow food products with only trace amounts of genetically modified ingredients to make non-GMO claims in line with international standards, experts predict that in the long run South Korea’s control of GMOS will tighten. Products from the US, for example, have faced issues if GMO ingredients were used. A recent survey from Korea Biosafety Clearing House found that 83 percent of Korean consumers want stricter regulations on handling, distribution and labeling of products made from genetically modified organisms.
IFOAM Organics Europe, along with AGROBIO in Portugal, will host the annual European Organic Congress online June 16-18. Topics include the how the CAP strategic plans align with the EU Green Deal, expected changes in the EU organic regulations, climate change, and more. Registration is free, and seats are limited.
Processed foods will receive the most attention in Japan’s latest imported food monitoring plan.Processed foods importers are advised to test food products before entry to ensure that they do not contain bacterial contaminants, pesticides, antibiotics, or other unwanted materials. In addition, the food supply chain is expected to become more complicated with lower tolerance for violations.
New Zealand’s domestic market for organic food rose 23 percent from 2017 to 2020 to reach NZ$302.5 million, according to the Organic Sector Market Report 2020/21 published by Organics Aotearoa New Zealand. Eighty-one percent of consumers there report buying organic products at least every two weeks. Supermarkets dominate the sales channels, with 69 percent of organic sales valued at NZ$209 million in 2020. Specialty stores commanded 16 percent of sales followed by other retailers at 14 percent and farmers markets/box schemes at 1 percent. Imported organic products make up about a third of the value of the domestic retail sales. Although the amount of certified organic acreage is down 3.4 percent compared to 2017, the number of certified organic operations is up 12 percent since then, and there has been a 54 percent increase in operations under conversion to organic. Land conversion is driven by the wine, horticulture and dairy sectors, which represent key export products. New Zealand’s export market is estimated at NZ 420.4 million.
Mexico will conduct a seminar on April 12, 2021 for U.S. exporters of organic products and US organic certifiers. The session will cover procedures and technical information on how to become certified to Mexico's LPO, a requirement imported organic products must meet by June 26, 2021. Interested U.S. parties should contact SENASICA, the National Organic Program, or FAS Mexico City to attend.
Animal nutrition, especially additional sources of protein and vitamins that are not created using genetically modified microorganisms, are one of the areas mentioned in the European Union’s Orgnaic Action Plan. In 2019, EU organic animal production was only about 3 percent of overall animal production in Europe, but is growing fast. Organic poultry (representing about 3 percent of EU’s poultry) and pork production (about 1 percent of pork production) were growing at 10 and 6 percent annually, respectively. Laying hens, which represent about 40 percent of the organic poultry in the EU, were growing at 13 percent annually. About 5 percent of EU’s cattle and 6 percent of the sheep were organic in 2017. Austri had the highest penetration of organic livestock, and organic dairy production is concentrated in Austria, France and Germany.
Starting July 25, 2021, Japan’s organic standards for livestock products will encompass turkey products. Once the regulation goes into effect, all turkey products sold as “organic” will require appropriate certification. Per the terms of the U.S.-Japan organic equivalency arrangement, U.S. turkey products will retain access to the Japanese organic market provided they are certified under the USDA National Organic Program and exported to Japan under the arrangement.
The European Union’s (EU’s) Action Plan for organic agriculture will take a three-pronged approach to boost acreage of organic farms to 25 percent of the regions farmland by 2030. The plan seeks to boost overall demand for European organic foods, encourage production, and further improve organic agriculture’s sustainability. Organic agriculture in the EU has increased 66 percent from 2009 to 2019, accounting for 8.5 percent of Europes utilized agricultural area, even as retail sales have doubled, but increases are not consistent throughout the region. Member states, therefore, will formulate their own targets to contribute to the EU-wide goal. Some of the action steps include:
- Promoting the EU logo: as of October 2020, on average 56 percent of EU consumers recognize the EU organic logo, with variations between member states.
- Allocating 27 percent (€49 million) of the overall share of agricultural promotion budget to organic products for 2021
- Increasing promotion of organic within the EU and internationally, while raising awareness of export opportunities via trade and equivalency agreements.
- Using procurement plans to increase organic food in school, government, and workplace food service offerings, perhaps through setting mandatory minimums for sustainable food in public institutions.
- Strengthening fraud prevention and traceability efforts in order to boost consumer confidence in organic products.
- Developing a database of all EU organic operators is set for 2021, along with work on digital product passports
- Increasing incentives for production, including training, technical assistance, and using Common Agricultural Policy, such as eco-schemes and rural development initiatives
- Increasing organic aquaculture.
- Generating market data and reports to assist producers, along with research into trading practices to limit unfair practices; and encouraging small holders to use group certification.
- Fostering small-scale and local production and encouraging regional cooperation to reduce food miles and offer opportunity in areas away from tourist tracks.
- Improving understanding of livestock nutrition alternatives, especially algae, that could avoid genetically modified microorganisms in organic animal vitamins and feed.
- Enhancing biodiversity through conserving seeds and other genetic materials, avoiding contentious materials, such as copper and plastics, and increasing yields of organic farms through research and farm advisory services.
- Increasing research and innovation, with 30 percent of the research and innovation budget for agriculture, forestry and rural areas dedicated to topics of interest to the organic sector
Increased sales of bread products in the Asia Pacific region is resulting in more interest in spreads and jams, especially natural nut butters and jams with lower sugar. Shoppers are seeking less-processed products with fewer ingredients, in part as a result of health concerns due to the COVID-19 pandemic.
Organic Trade Association will lead a Trade Mission to the United Kingdom and European Union June 14-18, 2021 for a limited group of U.S. organic companies interested in expanding in those markets. Activities will take place in London and Amsterdam, and participants in this Trade Mission will also have the opportunity to exhibit at the Free From Expo, taking place June 15-16, 2021 in Amsterdam. If you are interested in participating, contact Alexis Carey, International Trade Manager.