What’s Next in Food & Ag Fellowship Organic Bootcamp

Eric Jackson, September 17, 2019

Some Facts About Organic:
 Organic does not mean that no pesticides or fertilizers were
used.
 It means that only those substances allowed by the regulations are
used.
 Organic processed foods might contain synthetics
 If they are allowed by the regulations.
 Organic standards often don’t guarantee social justice or fair
trade practices.
 Consumers should look for additional labels

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Organic Around the World - 2017
About 69.8 million hectares
(ha) globally

Top 5 Countries
 Australia (35.6 million)
 Argentina (3.4 million)
 China (3.0 million)
 Spain (2.08 million)
 USA (2.03 million)
Organic in the USA
2016
Overall total organic hectares will
reach bout 8.3 million in 2019

Top 5 states in 2019 (acres)

 California (688,883)
 Montana (417,412)
 Wisconsin (255,971) 2019
 New York (253,989)
 North Dakota (186,193)

US organic sales broke $50 billion

in 2018
Global Organic Marketplace
Ranking of organics demand:
 Produce
 Animal Proteins
 Grains & derivatives
 Other ingredients

Current global organic demand (in $):

 ~50% North America
 ~30% EU
 ~20% ROW

Current global organic supply (in $):

 ~25% North America
 ~15% EU
 ~60% ROW

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U.S. Organic Production Not Meeting Demand
<1% of Rowcrop Land is Organic Foreign Supplies Filling Gap

Thous and M etric Tons

1,200 US Imports of Organic, 2012-2016
1,000

800

600

400

200

0
12 13 14 15 16

Wheat Corn Soybeans

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Why Organic
The number of certified organic
farms and businesses grew 13%
last year, and study after study
shows that organic farms are
more profitable than the average
farm, by 35% or more. Lower
input costs, comparable yields
and prices 2-3 times conventional
prices all make organic a
compelling proposition.

* 400-acre farm comparing a conventional corn & bean rotation (blue) with a transition rotation of Oats/Alfalfa – Alfalfa – Corn – Soybeans (orange),
putting 100 acres into transition annually starting in 2012, ending with 300 certified organic acres by 2016. All relevant costs (labor, fertility, decreased
yield (17% for corn and 20% for soybeans) etc.) are taken into account.

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 Standards Setters

EU Japan
US National Organic Switzerland The Canadian General
Program (NOP) Standards Board
(CGSB) under the
Standards
Council of Canada

And many more!

Accreditors

IFOAM (International Federation of

Organic Agriculture Movements) Certified Organic Associations of
British Columbia (COABC)

(Council of reserved appellations US National Organic Program

and rewarding terms) (NOP)
Organic Certification Agencies
 Types of Agencies
 Non-governmental (NGO) or Governmental
 Membership-based
 Nonprofit or for-profit
 Might also set standards
Organic Certification Process
 36 month transition process, during which the farmer will
 Farm organically and keep all records
 Find a certifier
 Create and submit an Organic Systems Plan (OSP)
 Be inspected
 Receive a certificate

 Every year the farmer will be inspected to make sure that what’s in the OSP aligns with
what’s in the fields, bins, and contracts. The farmer would have made updates to the
OSP prior to the inspection, but updates will likely be made at or after as well.

 Unannounced inspections are recommended by the NOP for 5% of every certifier’s

client base per year.
Education & Promotion
 Membership, chapter-based

 Membership-based

 Membership-based
 Promotes organic community
 Annual conference and tradeshow
Organic Checkof
 There is no mandatory organic checkoff program

 A mandatory checkoff program was being considered by the

USDA from 2015-2018, but the process was ultimately
terminated before it came to a vote

 An Organic Trade Association voluntary checkoff program,

named GRO Organic, was launched this year
 Short for Generate Results and Opportunity for Organic
 Private industry initiative
Organic Trade Policy

The 2018 Farm Bill expands access for organic farmers

and incentivizes farmers to transition to organic in
existing USDA conservation programs.
✓ Raises the payment limit for Environmental Quality
Incentives Program (EQIP) and the Organic Initiative
(OI) projects from $80,000 over six years to $140,000
over five years
✓ Further incentivizes transition to organic within the
Conservation Reserve Program-Transition
Incentives Program (CRP-TIP) by giving transitioning
organic farmers a two-year head start on their organic
certification process for land coming out of CRP
✓ Expands access for organic farmers and farmers
transitioning to organic in the Conservation
Stewardship Program (CSP) by authorizing state-
allocated funding for this purpose

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What Farmers Need
 Inputs (fertilizers, seeds, etc.)
 A reliable market to sell to
 Transparency
 Business tools & information
 More financial certainty
 Tailored solutions

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 What Food Companies Need
 Reliable supplies
 Traceability
 Regulatory certainty
 Integrity
 Scalability
 Professionalism & dependability

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The Opportunity
 Forecasted demand growth 2017-2022
 Organics 14.9 % CAGR (1)
 Major incumbents in agribusiness (ABCD’s)
 Overall very little response and not in their DNA
 Infrastructure does not fit the demands of new consumers
 Identity preservation is anathema to commoditization
 Small / startup agribusiness firms
 Lack resources and capital (human and financial)
 Limited focus on one segment of the supply chain
 No international presence : unable to directly manage traceability
and assurance

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The Challenges
 Fragmentation: No dominant players in the supply chain for organic
grains, oilseeds, feed and food ingredients
 Lack of Supply: Insufficient acreage for organic grains and oilseeds in the
USA to meet demand; imports are required
 Product Standards: Lack of rigor by the current actors (i.e. rules are
being bent and broken)
 Traceability: Poor transparency throughout the supply chain
 Adjacent Services: Inputs supply chain for organic farming is
underdeveloped

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What We Do

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 Our Vision
Accelerate the availability of healthy organic, nGMO and regeneratively grown food.

Our Mission
Deliver long-term value to our suppliers; develop supply chain
assurance and transparency for our customers; and create unique
investment opportunities for our financial partners.

Our values
Sustainability. Integrity. Collaboration.
Sustainability: Environmental, Social and Governance (ESG) criteria
light our path. Circular economy concepts inform our business decisions.

Integrity: We live by our values and tell it like it is, always driving for
transparency, quality and trusted methods of assurance.

Collaboration: Like-minded individuals and organizations build trust

through performance and respect. We achieve together.

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Pipeline Foods Footprint - 2019

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Contact Us

Eric Jackson ejackson@pipelinefoods.com

612-790-3474