International competitiveness of organic beef production in Germany

The main objective of the project presented in this article was to analyse the strengths and weaknesses of German organic beef production as compared with France, Austria, the Czech Republic and Argentina. Additionally, a number of marketing initiatives in France, Austria, Great Britain and Switzerland were analysed to examine their applicability to German conditions. Within the framework of the International Farm Comparison Network, eleven typical organic beef farms were analysed. Germany and Austria produce at the highest cost, and profitability in Germany is relatively low despite high levels of direct payments. Competitive pressure from France and Austria can not be expected as long as product price levels are higher than in Germany, and German export opportunities appear limited due to the French and Austrian preference for beef of national/regional origin. There appears to be an incentive for conversion to organic farming on marginal grassland locations in the Czech Republic. However, future cost increases can be expected. Price differences between domestic and potential export markets will determine the extent of expansion of organic beef production. Argentina, the lowest cost producer, shows major similarities between organic and conventional beef production. However, its potential for further expansion appears to be limited. The analysis of marketing initiatives shows, however, that the most pressing need for action lies on the marketing side and among the actors themselves. Improved product quality, price premiums, differentiation of marketing channels, and improved communication (towards consumers and in the supply chain) are main issues. As the elbow room for price increases appears to be rather limited in the foreseeable future, cost reductions remain a strategy for the producers.