Organic Trade Association Annual Report january 1, 2013 . December 31, 2013

OTA is actively reaching out to the more than 17,750 certified organic operations to help shape a potential Organic Research and Promotion Program. The conversation to determine if there is a fair and equitable way to pool funds for organic research and promotion continued in 2013. Based on input collected from over 500 individ-uals participating in webinars and town hall meetings across the country over the previous two years, the Organic Research and Promotion Program (ORPP) Steering Committee drew up options for a framework outlining how a program could be structured.

Organizers developed hard-copy and electronic postcards based around the theme “I’m Organic” with the rallying cry “United for MORE Organic.” All stakeholders were asked to participate by going to the UnitedForMoreOrganic.org website, signing up for a newslet-ter to learn more about the initiative, and providing feedback to help develop the initiative framework.

OTA has presented the emerging structural options for the program via in-person meet-ings, webinars, and through targeted outreach to stakeholders. These options fall into three key areas—Governance, Utilization of funds, and Assessments—focusing on the best way to accomplish fair and equitable participation across the industry.

Meanwhile, two legislative “technical fixes” needed to remove obstacles to establishing an organic research and promotion program received support in Congress. The amended language relieves organic producers and handlers from the burden of paying into conventional orders that do not have a history of working on their behalf, and allows the organic sec-tor the same choice that other sectors of agriculture already have to petition USDA.

These technical amendments were included in the final Farm Bill, which was signed into law by the President in early 2014. While removing these barriers does not establish an organic research and promotion program, the entire organic sector now has the choice of whether to pursue the program, and if so, how it will be structured.

OTA plants “seeds” for active farmer involvement through the establishment of a Farmers Advisory Council.In May, OTA formally established a Farm-ers Advisory Council (FAC) to provide input from small- to medium-sized organic farmers, ranchers and growers to the trade association on matters geared to advancing organic agriculture.

It is designed to formalize and improve two-way communication between OTA and organic producers. Through dialog and upfront input, FAC gives organic farmers a voice to directly influence legislation that is important to their sector, and allows OTA to better represent the diversity of organic producers in its policy and advocacy work.

Making up the new advisory council are active farmers of small and medium-size operations serving as representatives of sector, state and regional organic farming organizations. CCOF Inc. (California Certified Organic Farmers) is a founding member of the advisory council. Other participating organizations include Organic Valley/CROPP Cooperative, Oregon Tilth, Organic Egg Farmers of America, UNFI and WODPA (Western Organic Dairy Producers Al-liance). Other organizations meeting the criteria are encouraged to participate.

FAC held its first three meetings in 2013 via teleconference, and focused on identifying the needs, challenges and opportunities of organic producers. Perry Clutts of Pleasantview Farm, who holds the first designated Farmer Seat on OTA’s current Board of Directors, serves as co-chair of OTA’s Farmers Advisory Council.

OTA consistently communicates that organic is the gold standard for consumers seeking to purchase products that have been produced without the use of genetic engineering.During 2013, OTA has convened an Organic = Non-GMO Plus Task Force, charged with assisting OTA in developing comments to FDA on the common terminology used on existing organic products, and to ensure that organic certification and corresponding organic labels remain the gold standard for non-GMO verification. These efforts support OTA’s call for mandatory labeling of GMOs while bolstering organic’s position for consumers seeking to avoid GMOs. OTA continues to be a partner in the Just Label It campaign for national mandatory labeling on products produced using GMOs.

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To learn more, visit UnitedForMOREOrganic.com

“Organics are a niche market in agriculture with a growing market share, so it makes sense to me to allow farmers to invest some of their own funds to promote their products.”

—RepresentativeVickyHartzlerofMissouritotheAssociatedPress

OTA influences historic organic equivalence arrangement resulting in the first two-way trade agreement in Asia.In September, officials from Japan and the United States announced the signing of an organic equiva-lence arrangement between the two countries in ceremonies at All Things Organic at Natural Prod-ucts Expo East. U.S. officials tak-ing part were Administrator Anne Alonzo of the U.S. Department of Agriculture’s Agricultural market-ing Service and Ambassador Isi Siddiqui of the Office of the U.S. Trade Representative. The organic equivalence arrangement will reopen the important Japanese consumer market for U.S. organic producers of all sizes, and will create jobs and opportunity for the U.S. organic food and farming sector. Assessments conducted in Japan and the United States leading up to the signing found organic manage-ment, accreditation, certification and enforcement programs are in place in both countries, and conform to each other’s respective programs. The first two-way trade agreement in Asia also marks the first organic equivalency arrangement without organic standards exceptions.

OTA represents the needs of the organic sector by actively engaging in important regulatory issues, such as food safety and organic protocols. Following the release of the Food Safety Modernization Act’s proposed rules for produce safety and preventive controls, OTA reconvened its Food Safety Task Force to analyze and prepare comments on behalf of OTA membership. Consistent with OTA’s work during the development of FSMA, their focus is to ensure that food safety regulations fully take into account organic practices, and avoid prescriptive requirements that could mandate use of materials, practices or technologies conflicting with the organic standards. Over several months, OTA urged members to weigh in on several key issues to better understand how the proposed requirements would impact organic growing and handling practices. OTA then consolidated that feedback and developed and submitted comments to the FDA.

After the public comment period, the FDA released a statement on key provisions of the proposed produce safety rule that will be revised and released for a second round of com-ments. The FDA’s announcement was a real win for organic producers and handlers, and its decision to propose a revised rule was largely due to the great work of the OTA Task Force and collective efforts throughout the organic sector.

Meanwhile, OTA’s Citrus Greening Task Force formed in April 2013, bringing together organic citrus producers representing Texas, California and Florida to address one of the most serious citrus diseases in the world. The bacterial disease spread by the Asian Citrus Psyllid (ACP) was first identified in Florida in 2005, and has spread to several other states including Texas. The psyllid was identified in California in 2008, with mandatory spraying requested in January 2013.

Organic growers are finding organic management protocols are proving to be more effective than conventional spray programs, largely because of the successful use of beneficial insects such as predatory wasps and botanical sprays. OTA’s Task Force will continue to engage researchers, the Animal and Plant Health Inspection Service (AHPIS), the National Organic Program (NOP), and other federal and state offi-cials and work to gain acceptance of or-ganic protocols nationwide. While this issue now is specific to citrus, this work will likely set an important precedent for future issues that arise as a result of invasive pest pressure & mandatory spray programs.

The Organic Center convenes Scientific Advisory Board and steps up research and communications priorities.

In September 2012, The Organic Center relocated its headquar-ters from Boulder, CO, to Washington, D.C. The independent non-profit 501(c) (3) science center now operates under the administrative auspices of OTA. In February 2013, The Center named Jessica Shade, Ph.D., to serve in its newly created posi-

tion of Director of Science Programs to provide scientific leadership to advance organic food and farming. As the Director of Science Pro-

grams, Dr. Shade manages ongoing science programs and related commu-nicated activities for the non-profit affiliate science center housed in the Washington, D.C., office of OTA.

“For consumers, the agreement with Japan also should lead to lower prices and more variety. The industry is hopeful that the United States will work toward other such deals as foreign countries gradually adopt stricter standards for organic.”

–LauraBatcha,ExecutiveDirectoroftheOrganicTradeAssociation,totheAssociatedPress

AMS Administrator Anne Alonzo with Ambassador Isi Siddiqui of the Office of

the U.S. Trade Representative and a Japanese delegate

Organic California Citrus

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The Center initiated five new projects in 2013, including a project examining methods to decrease arsenic uptake in organic rice systems, methods to prevent fire blight without the use of antibiotics, the effects of organic farming practices on nitrogen pollution, soil health on organic farms, and health effects of dietary pesticide exposure.

In September The Organic Center unveiled its newly re-designed website—www.organic-center.org—designed to highlight the science behind organic for consumers, policymakers, the media and others. Since coming on board as The Center’s Director of Science Programs, Dr. Shade has been actively building scientific resources for the organic community and developing ways to communicate the findings of credible, peer-reviewed science and research exploring the health and environmental benefits of organic food and farming. In late October, The Center announced the names of 24 scientists who have agreed to serve on its newly formed Science Advisory Board. All are distinguished scientists who are recognized for excellence in the field of organic research. The Science Advisory Board augments The Center’s internal scientific expertise and acts as an outside evaluator voice on issues that arise in the organic field.

OTA advocates for Farm Bill provisions that protect and support growth of organic agriculture. A new five-year Farm Bill that includes provisions for organic agriculture has been a prior-ity for OTA during 2013. OTA’s legislative team worked tirelessly with members of the House and Senate as well as the Conference Committee throughout negotiations. As part of advocacy effort by OTA, nearly 1,000 organic operations sent approximately 3,000 letters of support for organic priorities to their Senators and Representatives during the Conference Report talks. OTA’s work in 2013 set the stage for passing a final Farm Bill into law in 2014 that will help the organic sector continue to thrive.

Encouraging support for organic, Secretary of Agriculture Tom Vilsack on November 21 re-leased a White House report on U.S. Department of Agriculture (USDA) programs calling for quick passage of a new Farm Bill. Highlighting OTA data, the report declares that a compre-hensive Farm Bill will continue to support the growth of global organic market opportunities and expansion of domestic organic production options. OTA worked closely with USDA staff to identify organic priorities in a final five-year Farm Bill. Vilsack said the report shows the importance of a range of USDA programs, and the need to renew them in the Farm Bill.

OTA provides on-the-ground opportunities to advocate for organic on Capitol Hill. On May 14-15, OTA held its 11th annual Policy Conference and Hill Visit Days. Organic constituents from all over the country—153 in total—gathered in Washington, D.C., to advocate for organic on the Hill. Attendees took part in breakout sessions and panel discussions on a variety of organic priorities, from the opportunity for an Organic Research and Promotion Order to the importance of keeping farmers in organic, to international trade in organic prod-ucts. Tom Vilsack, USDA’s Secretary of Agriculture, was among the prestigious speakers. He recognized the unique production system covering U.S. organic agriculture, and announced guidance to remove agency obstacles to its continued growth. OTA members met with 152 Senators, Representatives and their staffs to educate Capitol Hill about organic policy priorities in a new Farm Bill and organic appropriations.

OTA’s bi-partisan Political Action Committee garners support for organic.Since its establishment in October 2010, OTA’s Organic Political Action Committee (Organic PAC) has evolved into a vehicle for OTA and its members to support candidates for Congress who are aligned with the goals of the organic business community regardless of their political party.

In 2013, Organic PAC provided financial assistance to 24 candidates for Congress in 18 states who understand and support issues that affect organic agriculture and trade. Organic PAC also hosted two fundraising events. The first followed OTA’s 2013 Policy Conference in May,

when Organic PAC hosted a donor reception at Johnny’s Half Shell. There, Congressmen Sam Farr and Peter DeFazio, as well as Sena-tor Jon Tester, addressed and mingled with Organic PAC contributors. The second event was held during Natural Products Expo East in Baltimore at Camden Yards for an evening ballgame featuring the Baltimore Orioles and Toronto Blue Jays. Organic PAC supporters enjoyed a barbecue dinner while viewing the game from left field in a private box.

OTA members meet with Congresswoman Ann Kuster

(D-NH)

Senator Jon Tester (D-MT) mingles with Organic PAC supporters“Organic is not the ‘same as.’ It is its own separate commodity and needs to be

treated as such. I’m committed to that.”

–SecretaryofAgricultureTomVilsack,speakingatOTA’s2013PolicyConference

Looking Ahead in 2014

Got Organic? OTA will continue comprehensive outreach to the sector regarding the potential of an Organic Research and Promotion Program.

OTA will unveil a newly redesigned website (ota.com) featuring robust

member communities and enhanced crisis communications capabilities.

OTA and The Organic Center will continue to proactively promote the

value and benefits of organic through targeted media outreach and

experiential media tours.

OTA will re-launch an Internet ad campaign to “connect the dots” so that consumers wanting to avoid chemical pesticides, antibiotics, and GMOs will learn how organic offers a real choice.

OTA will assert that organic is the gold standard for consumers seeking to purchase products that have been produced without the use of GMOs.

OTA will engage the Farmers Advisory Council in providing input from small- to medium-sized organic

farmers, ranchers and growers to the trade association on matters geared to

advancing organic agriculture.

The membership dues and financial contributions of companies who support OTA’s mission and work make our achievements possible. In 2014, OTA will continue to work to raise the profile of organic agriculture and products among policymakers and the public.

OTA and The Organic Center are working together to educate consumers on the environmental, economic and health benefits of choosing organic through targeted media outreach.One of the biggest myths of the organic debate, often perpetuated by mainstream media, goes something like this: Organic products are not affordable for budget-conscious families. Besides, there’s no proof they’re any better. The Organic Trade Association and The Organic Center undertook a two-day New York City media tour in November to dispel those illusions and reach the consumer with the simple message— Organic. It’s Worth It!

With a chef in tow, OTA and The Center served a full day’s menu with healthy breakfast, lunch, and dinner options demonstrating that families of four can enjoy all organic meals for $25 or less a day. As editors and journalists sampled the organic fare, The Center’s Direc-tor of Science Programs Jessica Shade, Ph.D., discussed the latest scientific studies behind the ingredients in each recipe. In addition, we gave our experiential presentation to seven influential national food and lifestyle bloggers and freelance writers at an evening recep-tion at the Specialty Food Association’s Test Kitchen.

The experiential media tour included bookings at top outlets ranging from lifestyle magazines, to news sites and Emmy-award win-ning daytime TV programs to highlight the benefits and competitive value of organic. Together, these top-tier national media outlets, including Good Housekeeping, The Dr. Oz Show, People Magazine, The New York Times, The Wall Street Journal, Reader’s Digest, Family Circle, Every Day with Rachael Ray, Ladies’ Home Journal, Parents, Women’s Health, Prevention and Men’s Health, reach a total combined audience of 37,511,806.

The Canada Organic Trade Association helps measure and promote organic production and trade through research, organic advocacy and branding.During 2013, the Canada Organic Trade Association (COTA) prepared and released comprehensive research about the Canadian organic consumer and market, showing that organic food and beverage sales have tripled in the past six years to reach $3.5 billion per year. Canada is now the fourth largest organic market in the world, and the biggest buyer of U.S. organic products. Consumer data indicate that over 20 million Canadians purchase organic products weekly. Meanwhile, COTA partnered with Canadian Organic Growers (COG) and the Cana-dian Health Food Association to hold the fourth annual Organic Week in September. The Canadian organic sector in the fall unveiled a generic brand strategy, the “Think Before You Eat” campaign, designed to differentiate Canadian organic products. COTA and COG have been asked to administer and manage the brand concept on behalf of the sector.

“Ninety-eight percent of Canadians polled think they will increase or maintain their current purchases of organic this year.”

—MatthewHolmes,ExecutiveDirectoroftheCanadaOrganicTradeAssociation,fromTheGlobeandMailSpecialReportforOrganicWeek

OTA studies highlight growth of the organic sector and offer valuable insights into why families buy organic products.The overall U.S. organic market continued to climb in 2012, reaching $31.5 billion and experiencing double-digit growth of 10.3 percent, according to the Organic Trade Association’s 2013 Organic Industry Survey. All categories tracked in the Survey experienced positive growth of at least 7%, with some experiencing accelerated growth as high as 16%. The fruit & vegetables category continued to hold the largest slice of the organic food market in 2012, with a nearly 35% share, and $10.1 billion in U.S. consumer sales. Consistent with the organic sector growth is the finding that U.S. families are increasingly embracing organic options. According to OTA’s U.S. Families’ Beliefs & Attitudes Study, eight in ten (81%) parents report they buy organic products, up significantly from the 73% who reported doing so in the 2009 benchmark study. The proportion of “Newly Organic” parents—relatively new entrants to the organic market—has increased to 4 in 10 (41%) families, while Non-Buyers continue to decline, representing only 19% of U.S. families.

OTA data have consistently shown that the leading reason given by U.S. families for purchasing organic products is related to their fami-lies’ health. In the 2013 study, parents’ top reasons why they purchase organic foods are related to their and their families’ health. Nearly half (48 percent) of those who purchase organic foods said they do so because they are “healthier for me and my children.” Additionally, parents’ desire to avoid toxic and persistent pesticides and fertilizers, antibiotics and growth hormones, and GMOs ranked high among the reasons cited for buying organic products. A majority of parents—72 percent—shop mainstream food stores for most of their organic foods. Mass merchandisers are in second place, with 49 percent saying they shop there.

Awareness of the USDA Organic seal has also grown, with more consumers more likely to look for the seal when shopping for organic products. Moreover, over four in ten parents say their trust in organic products has increased.

Additionally, the organic non-food category maintained strong growth of 11.8% in 2012. Personal care and fibers contributed the most dramatic growth to the non-food organic industry, with sales up 10.5% and 16.6%, respectively. Sales of organic fiber products, such as clothing, linens, and mattresses, surpassed sales of organic supplements to account for the largest share (34%) of the non-food organic market. As organic broadens beyond its core health message to address issues of sustainability and environmental stewardship, fibers stand to directly benefit.

On the fiber production side, OTA’s 2012 and Preliminary 2013 U.S. Organic Cotton Production & Marketing Trends report found that 8,867 bales of organic cotton were produced in the U.S. in 2012, an increase of approximately 22 percent over the prior year. There are a number of factors limiting the expansion of organic cotton production in the U.S., but the report also identified several building blocks for future growth in the sector.

U.S. Organic Product Sales

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U.S. ORGANIC PRODUCT SALES

Consumer-driven U.S. organic market reaches $31.5 billion

OTA MEMBERSHIP BY BUSINESS SECTOR

Food: 81%

Pet Food & Care: 2%

Fiber & Textiles: 8%

Personal Care: 9%

U.S. ORGANIC NON-FOOD SALES BY PRODUCT IN 2012

personal care [24.1%]

supplements [33.1%]

pet food [4.4%]

household products [2.6%]

Source: Organic Trade Association’s 2013 Organic Industry Survey conducted 1/25/2013 – 4/5/2013 ($mil., consumer sales).

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OTA Provides Comprehensive Resources

Organic Trade Association: OTA.com

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News from OTA: NewsFromOTA.com

International Trade Resource Guide: GlobalOrganicTrade.com

Organic business directory: TheOrganicPages.com

Directory of U.S. organic exporters: USOrganicProducts.com

U.S. consumer education: OrganicItsWorthIt.org

Canadian consumer education: OrganicBiologique.ca

Transitioning to organic production: HowToGoOrganic.com

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The Organic Trade Association (OTA), founded in 1985, is the membership-based business association for organic agriculture and products in North America. OTA is the leading voice for the organic trade in the United States, representing over 6,500 organic businesses. Its members include growers, shippers, processors, certifiers, farmers’ associations, distributors, importers, exporters, consultants, retailers and others. OTA’s Board of Directors is democratically elected by its members.

Cultivating a strong organic industry since 1985

Melody Meyer PRESIDENT

UNFI/Albert’s Organics

Sarah Bird

VICE PRESIDENT, USA

Annie’s Inc.

Dag Falck

VICE PRESIDENT, CANADA

Nature’s Path Foods, Inc.

Leslie Zuck

SECRETARY

Pennsylvania Certified

Organic (PCO)

Tony Bedard

TREASURER

Frontier Natural Products

Cooperative

Ryan Benn

Alive Publishing Group

Samantha Cabaluna

Earthbound Farm

Perry Clutts

Pleasantview Farm

Nicole Dawes

Late July Organic Snacks

Chris Ely

Applegate Farms, LLC

Melissa Hughes

Organic Valley

Matthew C. McLean Uncle Matt’s Organic, Inc.

Scott Nash

MOM’s Organic Market

Kelly Shea

WhiteWave Foods

Marci Zaroff

Under the Canopy/Portico

Brand Group

The Organic Trade Association is the only organic

organization serving the North American business

community with a democratically elected Board of Directors.

The election process is a means for OTA members to select

the trade association leadership and to have a voice in policies

that affect the well-being of the organic sector. In 2013, a

record-breaking thirty percent of the OTA membership

participated in the election process.

Organic Trade Association Board Members