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Letter to USDA Secretary Sonny Purdue
On December 17th 2018, NODPA sent the letter below to the Secretary of Agriculture. NODPA is working with other groups to petition the Secretary to return the Origin of Livestock rulemaking process to the NOP 2019 work agenda. One of the attachments about the economic effect of the lack of rulemaking is attached. The other attachments that went to the Secretary were a condensed history of the regulation and a summary of the Inspector General’s report.
The Honorable Sonny Perdue, Secretary
U.S. Department of Agriculture
1400 Independence Avenue SW
Washington, D.C. 20250
The Northeast Organic Dairy Producers Alliance (NODPA) is alarmed that the current Origin of Livestock standards are creating unfair and inconsistent interpretations of the standards and unpredictable implementation by certifiers across the country. We respectfully ask that USDA prioritizes implementation of an Origin of Livestock Final Rule. To accomplish this goal, we ask the Secretary to work with the National Organic Program (NOP) to immediately place the Origin of Livestock Final Rule on the work agenda for 2019 and immediately issue Guidance on the interpretation of the one–time transition provision based on the 2015 Proposed Rule.
The current rule is inhibiting the National Organic Program’s ability to provide sufficient enforcement to ensure that our nation’s organic animal standards are fair and consistent. The effect of this is market instability which could lead to a lack of consumer confidence in the domestic organic dairy industry.
NODPA has a membership of eight hundred and thirty six organic dairy producers in the Eastern US. NODPA’s mission is to “enable organic dairy family farmers, situated across an extensive area, to have informed discussion about matters critical to the well being of the organic dairy industry as a whole.” NODPA is not aligned with any one processor or cooperative and represents the views and needs of many different farmers.
Our dairy farmer members have seen inequities in the enforcement of regulation for dairies around the issue of the Origin of Livestock. They believe they can compete with the most efficient organic dairy producers if they are treated equitably. The Office of Inspector General (OIG) report supports their fears and concerns. The organic dairy industry lacks a clear uniform national standard for Origin of Livestock, a concept that is at the core of the creation of the Organic Food Production Act and the National Organic Program.
As you well understand, regulations must be enforced in a uniform and consistent manner to ensure all industry participants are competing on a level playing field. That is not the case of the current organic dairy industry. Our certified organic farmers continually declare organic integrity as their number one policy priority and wish to see a fair and consistent interpretation of the origin of livestock standard—through clarity in the standards.
USDA’s Office of Inspector General audit confirmed that certain segments of the organic dairy industry are being treated differently than other segments and that certifiers are interpreting the standards for origin of livestock very differently. (See attachments)
We ask that USDA fix those inequities by publishing an Origin of Livestock Final Rule based on the 2015 Proposed Rule and the comments received on that Proposed Rule. We support the Organic Farmers Association Origin of Livestock policy position on this issue. We ask the Secretary to work with the National Organic Program to immediately issue Guidance on the interpretation of the one–time transition provision.
We support a policy that clearly states that the provision for transitioning conventional cows to organic in one year is a one-time allowance and continuous transition of conventional livestock is not permitted. This language is not controversial and mirrors language first published in the 2015 Proposed Rule. It also mirrors the language in the preamble of the rule further supporting this interpretation. This would put organic dairy on the same level as all other organic commodities, would stop the fraud and confusion existing within the organic dairy industry, would stop continual transition of non-organic dairy heifers, would open the market for certified organic replacement animals, and would ensure that all US-based and international-based certifiers are using the same standards.
NODPA supports the inclusion of the following in the Final Origin of Livestock Rule:
1. A producer as defined by USDA NOP may transition bovine dairy animals into organic production only once.
2. A producer is eligible for this transition only if they convert an entire established non-organic dairy operation to organic production at the same geographic location within a defined 12 month period. Once that transitioned has started, other non-organically certified animals cannot be added to the herd.
3. This transition must occur over a continuous 12-month period prior to production of milk or milk products that are to be sold, labeled, or represented as organic.
4. A producer must not transition any new bovine dairy animals into organic production after the end of the 12 month transition period.
5. A producer is not eligible for the exemption if it has been used by a Responsibly Connected person who has a 20% or more ownership share in their legal entity.
6. The certifying entity will file an organic system plan prior to the start of transition and the transition process is overseen by the certifier as part of their accountability.
7. Transitioned animals must not be sold, labeled, or represented as organic slaughter stock, organic bovine dairy animals or for the purpose of organic fiber.
8. If organic management of the dairy animal is interrupted, the animal cannot be returned to organic certification.
9. Split bovine conventional and organic milking herds at the same location are prohibited.
10. Once the regulation is finalized all entities will be required to immediately meet the requirements of the Final Rule. There will be no implementation period.
We further ask that USDA give serious consideration to providing more economic capabilities to collect the data and help the industry better understand the impact of proposed policies on the industry. NODPA is ready to work with USDA and Congress to build support for that request.
We would be happy to talk with you and your leadership within Agricultural Marketing Service more about origin of livestock. We urge you to move swiftly as family organic dairy farmers are suffering because of the lack of uniform and strict enforcement. We know you share this priority for strong enforcement and integrity and look forward to hearing from you.
NODPA Board Chair and New York organic dairy farmer
NODPA Executive Director
cc: Gregory Ibach, Under Secretary for Marketing and Regulatory Programs,
Jennifer Tucker, Director, National Organic Program
Economic hardship caused by the lack of Origin of Livestock Regulation
While sales were at the monthly highest level because of an increase in organic whole milk sales, growth of sales in non-fat organic dairy products were dropping at a rate of 4% annually, and the retail price was consistent, the average pay price was plummeting. For those operations whose certifier does not allow continuous transition of conventional animals, it will take a minimum of three years to have a significant response to a shortage of supply by increasing cow numbers, unless they have sufficient available capital to purchase organically certified milking cows. They will also be limited by their land base. For those entities whose certifiers allows continuous transition, they can respond within one year of seeing an increase in demand and pay price.
USDA NASS organic census shows an increase in the number of organic dairy cows from 2014 to 2015 was 1,068. The increase in organic cows from 2015 to 2016 was 38,326. This ability to expand rapidly gives those continuous transitioning operations economic advantage to increase profits quickly with a higher pay price. Large scale operations whose certifiers allow continuous transition were able to increase their volume quickly as they market their milk directly to store brand and private label contracts which are now the number sellers of organic dairy products. To give an idea of the difference between dairies’ sizes in Texas and Wisconsin, a NASS survey showed there were 76 times more organic dairies in Wisconsin than Texas, yet Texas produced 1.3 times more milk. Put another way, the average dairy’s production in Texas was 80 million pounds, while the average dairy in Wisconsin produced 810,000 pounds.
The inconsistencies in applying the Origin of Livestock regulations result in economic advantage for those whose certifiers allow for more than a one-time transition as they can respond more quickly to changes in the supply side market. With a deficit they can increase the number of milking cows and heifers quickly while the pay price is high. When the price drops they can sell their less productive milkers to minimize losses in the knowledge that they can buy in more animals if the demand changes.
 Ye Su, Scott Brown, Michael Cook, Stability in Organic Milk Farm Prices: A Comparative Study, No. 150735, 2013 Annual Meeting, August 4-6, 2013, Washington, D.C., Agricultural and Applied Economics Association at 7 (June 3, 2013), Click here for the full article.
 Ye Su, Scott Brown, Michael Cook, Stability in Organic Milk Farm Prices: A Comparative Study, No. 150735, 2013 Annual Meeting, August 4-6, 2013, Washington, D.C., Agricultural and Applied Economics Association at 21 (June 3, 2013), Read full article here. .
 Letter from CROPP Cooperative November 2014