The Present and Future for American Agriculture: A Perspective From the Organic Trade Association - PowerPoint PPT Presentation

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The Present and Future for American Agriculture: A Perspective From the Organic Trade Association

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Title: The Present and Future for American Agriculture: A Perspective From the Organic Trade Association


1
The 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

2
What 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

4
State and Regional Strengths
  • Many state and regional groups with which we
    coordinate
  • Organic farm organizations
  • Cooperatives
  • Organic Certifier Organizations
  • Most are members of OTA

5
States
  • Organic grew up in many places
  • Primary states today and yesterday
  • California, Texas, Colorado
  • Vermont, New Hampshire
  • Iowa, Wisconsin, Minnesota
  • Pennsylvania and New Jersey

6
Size 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

7
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8
Developing 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

9
Developing the Organic Market
  • Many iterations of the rule
  • Final rule finished in 2000
  • Initial standards and label introduced in October
    2002

10
Basics of the Rule
  • Farms that sell more than 5000 of organic
    product must be certified to make the claim
  • Processors are certified

11
Basics 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

12
Basics 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

13
Imported 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

14
Organic 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

15
Organic 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

16
Desired 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

17
Desired 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

18
Organic Marketplace
  • Organic products are everywhere
  • Organic is now 2.5 of food and beverage in U.S.
    (up from 0.81 in 1997)

19
Organic Food Sales by Channel, 2005
Source OTAs 2006 Manufacturer Survey
Nutrition Business Journals organic industry
model.
20
Organic Marketplace
  • Growth rates in double digits since about 1990
  • Currently at about 16
  • Conventional at about 2 -4

21
Organic 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.
22
Organic 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.
23
Organic 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.
24
Forecasted Average Annual Organic Food Sales
Dollar Growth, 2007-2010
Source Organic Trade Associations 2006
Manufacturer Survey and Nutrition Business
Journal analysis
25
Organic Marketplace
  • Expanding by consumer demand
  • Our challenge to meet the demand!
  • A nice problem to have!

26
U.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

27
Comparative Studies
  • One study done by ERS concerns EU vs. US support
    for organic and it is very instructive

28
OTA 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.

29
OTA 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

30
USDA Supports Organic
  • Funds have been allocated and programmed to
    benefit organic in a few cases
  • CSREES
  • EQIP
  • NRCS
  • FAS

31
Is there Equity and Parity in Support?
  • 2006 Support for Biotechnology in USDA ONLY
  • Approximately 170,000,000

32
Impact of Lack of Support
  • Organic producers and processors need production
    and price data
  • Basis for marketplace, risk insurance
  • Farm map request!

33
Will OTA Work for Change?
  • OTA, with others in the organic community, will
    be seeking parity in the next Farm Bill.

34
The Elephant in the Room
  • Biotechnology Regulation
  • Potential losses to organic sector

35
Co-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?

36
Successful 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

38
The 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

39
Learn more at www.ota.com .
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