Title: The Present and Future for American Agriculture: A Perspective From the Organic Trade Association
1The Present and Future for American Agriculture
A Perspective From the Organic Trade Association
- August 29, 2006
- Caren Wilcox, ED CEO
- At the request of the USDA Advisory Committee on
Biotechnology 21st Century Agriculture
2What is the Organic Trade Association?
- Founded in 1985
- Serves the organic system of agriculture,
food/fiber distribution - Has grown with the industry
- Helps to maintain the chain of organic integrity
from farm to table or farm to fashion
3- OTA coordinates with many state, regional and
local groups of organic producers, certifiers or
processors - Diverse membership in both size and scope
- 60 of OTA membership declare less than 100,000
in annual revenue from organic sales
4State and Regional Strengths
- Many state and regional groups with which we
coordinate - Organic farm organizations
- Cooperatives
- Organic Certifier Organizations
- Most are members of OTA
5States
- Organic grew up in many places
- Primary states today and yesterday
- California, Texas, Colorado
- Vermont, New Hampshire
- Iowa, Wisconsin, Minnesota
- Pennsylvania and New Jersey
6Size and Scale
- Diverse in size and scope/business structure
- 60 OTA Members declare less than 100,000 in
organic sales revenue - Publically traded Hain-Celestial, United
Natural Foods (UNFI), Whole Foods, Wild Oats
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8Developing the Organic Market
- First efforts at standardization were voluntary,
local, state - 1990 Federal Law passes
- Organic Foods Production Act (OFPA)
- Benefits national organic label, certifiers
accredited, national and international presence
9Developing the Organic Market
- Many iterations of the rule
- Final rule finished in 2000
- Initial standards and label introduced in October
2002
10Basics of the Rule
- Farms that sell more than 5000 of organic
product must be certified to make the claim - Processors are certified
11Basics of the Rule
- Three Excluded Methods of Production or
Processing - No use of genetically modified organisms
- No use of sewage sludge
- No use of irradiation
12Basics of the Label
- Products that are 100 organic can be labeled as
such and use the USDA Organic seal - 95 organic ingredients can opt to use the USDA
Organic seal - At least 70 organic can make the claim made
with organic - Remaining 30 - no use of excluded methods
13Imported Products
- U.S. law requires agricultural product sold as
organic in U.S. must meet or exceed U.S.
standards regardless of source or processing site
14Organic Grows and Promotes Itself
- Organic had to make its own system of production
and distribution - Segment truly grew at the grassroots
- Consumer demand for environmentally sound
production methods
15Organic Grows and Promotes Itself
- Organic responds to desire for Consumer Choice
- Shoppers seek to live more healthfully
- Consumers seeking products for
- healthy life style
- environmental benefits
16Desired Attributes
- Studies show consumers want
- Foods and fiber grown without use of toxic and
persistent pesticides - Foods that are natural without artificial
preservatives, flavors, colors, no gmos - Foods grown on farms with sustainable practices
17Desired Attributes
- Consumers want good taste and quality
- Organic producers responded and developed
attractive, tasty products - 73 of shoppers have purchased organic products
23 buy each week
18Organic Marketplace
- Organic products are everywhere
- Organic is now 2.5 of food and beverage in U.S.
(up from 0.81 in 1997)
19Organic Food Sales by Channel, 2005
Source OTAs 2006 Manufacturer Survey
Nutrition Business Journals organic industry
model.
20Organic Marketplace
- Growth rates in double digits since about 1990
- Currently at about 16
- Conventional at about 2 -4
21Organic Foods Sales and Penetration, 1997-2005
Source Nutrition Business Journal estimates
based on OTAs 2006 Manufacturer Survey, annual
Nutrition Business Journal surveys of
manufacturers, SPINS, and other sources.
22Organic Food Sales 2005by Category
Source OTAs 2006 Manufacturer Survey. Category
and growth estimates derived from survey
responses, Nutrition Business Journals organic
industry model, SPINS retail data, and other
sources.
23Organic Food Category Share, 2005
Source OTAs 2006 Manufacturer Survey. Category
and growth estimates derived from survey
responses, Nutrition Business Journals organic
industry model, SPINS retail data, and other
sources.
24Forecasted Average Annual Organic Food Sales
Dollar Growth, 2007-2010
Source Organic Trade Associations 2006
Manufacturer Survey and Nutrition Business
Journal analysis
25Organic Marketplace
- Expanding by consumer demand
- Our challenge to meet the demand!
- A nice problem to have!
26U.S. Government Support? For Organic
- 1 Organic is grateful for the professionals at
the National Organic Program in AMS - Limited support from other areas of USDA include
small economic research projects - Increasing acknowledgment in REE and NRCS
27Comparative Studies
- One study done by ERS concerns EU vs. US support
for organic and it is very instructive
28OTA Supports USDA
- In this Appropriations Cycle
- NOP seeking 3.13 vs 2.026
- Price information
- Crop and Livestock Analysis
- Study of number of acres and organic farms in
U.S.
29OTA Supports USDA
- Research money is essential
- House Floor action to put 5 million in Ag
Appropriations supported by all organic - Transition money via organic certification cost
share dollars
30USDA Supports Organic
- Funds have been allocated and programmed to
benefit organic in a few cases - CSREES
- EQIP
- NRCS
- FAS
31Is there Equity and Parity in Support?
- 2006 Support for Biotechnology in USDA ONLY
- Approximately 170,000,000
32Impact of Lack of Support
- Organic producers and processors need production
and price data - Basis for marketplace, risk insurance
- Farm map request!
33Will OTA Work for Change?
- OTA, with others in the organic community, will
be seeking parity in the next Farm Bill.
34The Elephant in the Room
- Biotechnology Regulation
- Potential losses to organic sector
35Co-existence?
- The concurrent but separate existence of two or
more nations of assertedly great ideological
disparity Amer. Heritage Dictionary - Lebanon-Israel?
- Former East West Germany?
36Successful Co-existence
- Strict and neutral parties enforce the separation
- Protect the weak and underfinanced from the
strong and wealthy - Encourage societal responsibility, enhance human
life and environment
37- Organic is a good neighbor not a nation of great
ideological disparity - True coexistence is characterized by a desire to
live in harmony with neighbors
38The Future for Organic
- The future of organic is bright in the United
States and worldwide - We believe we are the agriculture of the 21st
Century
39Learn more at www.ota.com .