Under the impression of high inflation, the main topics discussed at this year's International Green Week are rising food prices, developments in the organic market and the tense situation in the food industry. "The challenges in the food industry have never been greater than in 2022 and 2023," said Christian von Boetticher, Chairman of the Federal Association of the German Food Industry, at an opening conference on Wednesday.

Above all, the high energy prices are "slowly forcing the industry to its knees". For 2023, Boetticher and Farmers' President Joachim Rukwied expect food prices to continue to rise.

Consumers go for cheaper

Last year food prices went up by 13.4 percent. The Federal Statistical Office in Wiesbaden reported a price increase of 10.7 percent for vegetables and 3.0 percent for fruit. "2022 was still a mixed calculation with old 2021 prices. The price peaks in 2022 will still be noticeable in 2023 and will have an impact," von Boetticher warned.

The problem for the industry is that not all cost increases in the production process can actually be passed on to the consumer - at certain price thresholds, the products are then simply no longer bought. "So it's not like the producer is walking around with his pockets full," said von Boetticher.

Some statistics have recently shown that consumers are increasingly turning to cheaper products under the impression of inflation. For example, the organic food business suffered an unusual setback: the market shrank for the first time in its history, and health food stores and purely organic markets felt the effects. Instead, organic food was more likely to be bought in discount stores - or not at all.

Demand for organic food

With regard to the restructuring of agriculture and food production, Rukwied and von Boetticher see it as the responsibility of consumers above all: They should set the direction for agriculture and industry with their shopping behavior. "If the further development of German agriculture is to be successful, then the focus must continue to be on higher-quality products," said Rukwied.

An organic area share of 30 percent by 2030 is a very ambitious political goal - but more sustainable production can only succeed if the higher-quality, domestic products are also bought. "If the demand is there, we German farmers will also serve the demand," said Rukwied. Von Boetticher warned that the market would collapse if there was 30 percent organic supply but not 30 percent organic demand.

According to a survey by the opinion research institute Yougov, 28 percent of Germans are buying less organic food than before in view of the high inflation. 60 percent of those surveyed stated that they had not adjusted their buying behavior, 5 percent are said to be buying more organic food.

The problem for the organic trade was the general price level - because the price increase was lower compared to conventionally produced food. "Organic acts as a brake on inflation," summarized the Bund Ökologische Lebensmittelwirtschaft (BÖLW) the result of a study that compared the prices of staple foods in autumn 2022 with those in autumn 2021. One example: According to the study, customers in the food trade had to pay almost 60 percent more for conventionally produced butter in autumn 2022 than a year earlier. The prices for organic butter, on the other hand, rose by 35 percent at discounters and by 29 percent in supermarkets.

The situation of the dairy farmers

Dairy farmers have been doing relatively well recently - after several years of the crisis. According to the Federal Association of German Dairy Farmers (BDM), they earned almost 60 cents per liter of raw milk at the end of last year - that was almost 12 cents more than the liter cost them to produce. In the previous years, the producer prices were in some cases significantly higher than the costs. Many companies gave up.

However, the association does not see a reason to give the all-clear. "We have to observe the markets, we also have to act if necessary," said association spokesman Hans Foldenauer. Dairy farmers are still dependent on the large dairies, and demand on the world market, which is important for Germany and Europe, is declining. "It is only a matter of time before there is also a significant drop in milk producer prices."

The Green Week begins on Friday as an on-site event in the Berlin exhibition halls - for the first time after two years of the pandemic without a major exhibition. 1400 exhibitors from around 60 countries are expected - slightly fewer than before Corona. Trade fair boss Dirk Hoffmann advertised the flower hall with an area of ​​2,200 square meters and a varied program in the animal hall as highlights. The fair is hoping for around 300,000 visitors by the time it closes on January 29th.

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