Organic Certification and Market Trends

Before the advent of chemical pesticides and fertilizers and modern mechanized farming methods, all agricultural products could have been considered organic. But with increased concerns about environmental and health effects, organic products are steadily gaining wider acceptance among mainstream consumers and producers.

Organic Farming Market Trends

According to the U.S. Department of Agriculture, organic farming and organic food sales has been one of the fastest-growing segments of agriculture for more than a decade.  Organic food sales in the United States totaled $13.8 billion in 2005, making up 2.5% of the retail food market.  This is an increase from 1.9% in 2003 and from 0.8% in 1997.

Conventional Supermarkets Diversifying into Organic Markets

Before the late 1990s, organic food was sold almost exclusively in natural product stores. This has been changing over the greater part of the last decade. In 2003, 47% of organic food sales took place in natural food stores, a decrease from 63% in 1998, according to the Organic Trade Assocation Surver (p. 2). The share of orgainic food sales in conventional supermarkets has risen from 31 to 44% over the same time period. Direct sales and exports have also increased, from 6 to 9%. As organic products have become more available in a wider range of venues, organic food has become accessible to more consumers.

Organic Products Increasingly Making Their Way to the Shelves

As a result, sales of organic products as a share of total food sales have grown from 0.8% in 1997 to 1.9% in 2003, and over 5,000 new food and beverage products were introduced to the U.S. retail market in 2003. Organic product introductions made up a growing number of these. Beverages, prepared foods, and snacks led the number of new organic products introducted in 2003.

 Organic Farmland Doubling

There were fewer than 1 million acres of certified organic farmland in the United States when Congress passed the Organic Foods Production Act of 1990, but certified organic farmland had doubled by the time the USDA implemented national organic standards in 2002 and doubled again between 2002 and 2005. Organic livestock sectors have grown even faster.  However, organic farmland still represent only a fraction - less than 1 percent – of the nearly 800 million acres of American agriculture.

In 2005, for the first time ever, all 50 states had at least some certified organic farmland. That year, U.S. producers dedicated more than 4 million acres of farmland to organic production – 1.7 million acres of cropland and 2.3 million acres of rangeland and pasture – and anecdotal evidence suggests it has grown ever since, according to the USDA.  California was the leading state in certified organic farmland, with more than 220,000 acres dedicated mainly to fruit and vegetable production. Other top states for certified organic farmland were North Dakota, Montana, Minnesota, Wisconsin, Texas and Idaho.

More than 40 states also had some certified organic rangeland and pasture in 2005, although only four states – Alaska, Texas, California and Montana – had more than 100,000 acres each. The USDA lifted restrictions on organic meat labeling in the late 1990s, and the organic poultry and beef sectors have expanded rapidly.

Defining “Organic”

With the increase in the number of producers and the availability of “organic” foods to consumers, it’s important to explain just what organic is, and what it is not.

National Organic Standards Board Definition

Five years after the passage of the federal law that established standards and regulations for organic products, the following definition of “organic” was passed by the National Organic Standards Board in April 1995:

“Organic agriculture is an ecological production management system that promotes and enhances biodiversity, biological cycles and soil biological activity. It is based on minimal use of off-farm inputs and on management practices that restore, maintain and enhance ecological harmony. ‘Organic’ is a labeling term that denotes organic products produced under the authority of the Organic Foods Production Act (of 1990). The principal guidelines for organic production are to use materials and practices that enhance the ecological balance of natural systems and that integrate the parts of the farming system into an ecological whole.”

“Organic agriculture practices cannot ensure that products are completely free of residues; however, methods are used to minimize pollution from air, soil and water. Organic food handlers, processors and retailers adhere to standards that maintain the integrity of organic agriculture products. The primary goal of organic agriculture is to optimize the health and productivity of interdependent communities of soil life, plants, animals and people.”

Organic Labeling and Verification

The USDA’s national organic standards should be considered in two parts: first, the verification system that includes certification of organic agricultural products and accreditation of certifying agents; and second, the production and handling and labeling standards under which organic agricultural products are produced and sold.

The NOP is consistent with internationally accepted guidelines for certification and accreditation. However, NOP requirements for production, handling, labeling and allowed or prohibited materials differ significantly from those of other countries, such as in the European Union, particularly in livestock production standards.

For example, the U.S. has no restrictions on irradiation in the production and handling of organic food, there are no restrictions on the source of manure and a producer may not list more than three ingredients/food groups on product labeling.

Where to find the USDA Organic Seal

Look for the USDA organic seal on organic vegetables or pieces of fruit. Or it may appear on a sign above an organic produce display. The USDA organic seal may also appear on packages of organic meat, cartons of milk or eggs, cheese and other single-ingredient foods.

On multi-ingredient products, the USDA orgainc seal is usually placed on the front of the package (principal display panel); however, it may be placed anywhere on the package. When you see this seal, you know the product is at least 95 percent organic.

The USDA orgainc seal may be printed in green and brown (as shown), in black and white, or outlined in black on a transparent background.

The Organic System Plan

In order to become a certified organic operation, a producer must submit an Organic System Plan to a USDA-accredited certifying agent for approval. The OSP is a detailed description of how the operation will achieve, document and maintain compliance with all applicable provisions of NOP regulations.

Specifically, the organic label designates a set of farming practices and is not an indicator of “natural” food or any specific nutritional benefits. “Organic” is not synonymous with “natural.” There is nothing in the U.S.D.A.’s National Organic Standards that defines or regulates the use of the term “natural,” and the USDA’s Food Safety and Inspection Service regulates the term “natural” on meat and poultry labels.

“A product containing no artificial ingredient or added color and is only minimally processed (use procedures that do not fundamentally alter the raw product) may be labeled natural,” according to FSIS definitions.” Furthermore, “The label must explain the use of the term ‘natural’ (such as: no added colorings or artificial ingredients; minimally processed).”

Free Range Designation

The “free range” designation makes no claim that the livestock actually lived or fed outdoors, but simply indicates that they had access to the outdoors after a period of confinement.

If a poultry producer and certifier determine that poultry needs to be temporarily confined for their health, safety and welfare, a provision of the USDA National Organic Program permits such confinement without loss of organic certification.

The Organic Certification Process

Federal law allows for several options in establishing or following an organic certification program. If federal or state animal health authorities determine that stricter or more prescriptive actions are required, organic producers could be required to comply with these actions.

Federal Certification

A state may not establish its own State Organic Program or provide certification services under the national program. Under this option, organic growers may seek organic certification by any certifying agent accredited by the National Organic Program. The state would not be responsible for enforcement of the NOP; and enforcement would be shared jointly by the national program and the certifying agent.

States Apply for Accreditation

A state may choose to provide certification services under the NOP only. Under this option, the state would have to apply for accreditation. As an accredited certifying agent, the state would be responsible for conducting certifications, enforcing the production and handling standards of the NOP, and maintaining compliance with other applicable regulations of the national program. The USDA would be responsible for oversight of the state certifying agent. Organic producers and handlers within that state could choose to be certified by the state or any other accredited certifying agent.

State Program with USDA Enforecement

A state may choose to establish a state program. Under this option, all organic producers or handlers in the state would have to be certified according to the SOP, which would include the requirements of the NOP and the more restrictive provisions unique to that state and approved by the USDA. The state would assume enforcement responsibility, within its borders, for the requirements in the national standards and its SOP. However, the state may not initiate proceedings to suspend or revoke the accreditation of any USDA-accredited certifying agent; that authority is left to the USDA. Organic producers and handlers may seek and obtain organic certification from any certifying agent accredited under the NOP.