Modelling of organic pig production economic viability in Latvia

Abstract

Pig production in Latvia is almost exclusively based on conventional farming that has been rather stagnant over the past years. Organic pork production offers the possibility to utilize the growing organic food consumption trend and align with the sustainable food principles and environmentally friendly farming initiatives accelerated by the Farm to Fork Strategy of the European Green Deal and the EU Taxonomy. Organic farming is classified as an activity meeting the CAP objective towards climate change mitigation and adaption, as well as under normal circumstances is qualified as environmentally sustainable (Taxonomy-aligned). There is a lack of systematic knowledge regarding organic pig market and production in Latvia, therefore the study attempts to fill the gap by examining the market potential of Latvian organic pork, as well as modelling the performance of organic pig production in Latvia. The modelling is carried out by developing and analysing two comparable models of pig production – conventional and organic (1 000 sows, full production cycle). Model inputs also include market analysis, organic pig feeding trials, expert interviews, and consumer survey. Results of the study reveal that the market value of organic food has more than doubled in the EU over the last decade. Experience from Denmark and Germany shows that producer prices of organic pork tend to be more stable than conventional pork prices and on average 2.4 times conventional price level. Demand for organic pork exists in Latvia and can be further increased by improving the availability of organic pork at convenient locations, highlighting its local origin, and raising awareness of its benefits. Demand for organic pork in Latvia is largely influenced by the price. In the medium term, the potential market for organic pork in Latvia has been assessed at 0.67 thousand tonnes annually. Similarly to conventional farming, economic viability of organic pig production depends on the revenue and feed costs ratio.