Organics 101

Organics 101
by Madeleine Baerg - 10, 2011

A decade ago organics were considered a little weird, bought almost exclusively by back-to-the-earth hippies and activist types. Today, organics fill grocery store aisles and mainstream consumers' shopping carts. Organic producers are popping up in every sector of the ag industry. But, organic production is still misunderstood by most conventional producers. What's really happening in organic production? More importantly, do we have something to learn from our organic beef producing brothers?

The rules and regulations
"The organic production system is a tight system and quite onerous," says past Canadian Cattlemen's Association (CCA) director and well known Albertan cattle industry name, Garry Benoit, who has been an organic farm inspector for the last decade. In addition to what he describes as a "massive amount of documentation", each organic farm must submit to an annual inspection.

"We go and make sure that the farmer is doing what he says he's doing in the organic system plan he submitted to the organic certification body. We don't make any decisions, we simply report and the certification body makes a decision. We're the eyes and ears out there."

The standards are rigorous. In order for an animal to be eligible for slaughter and selling as organic, its mother has to be on one hundred percent organic feed and management from the beginning of the third trimester. In addition to the obvious no-no's (no synthetic pesticides or fertilizers, no hormones or antibiotics, no GMOs), every pasture, food type and mineral supplement available to the animal throughout its life must be checked and approved; and strict space and management practices must be followed.

In pursuit of the organic premium, do many guys try to sell as organic, animals that are not? "Absolutely not," says Benoit. "If there is a commitment and a willingness to do all that paperwork, they're doing it because they believe in it. If they fail an inspection, it would be accidental. It might be because they didn't properly check out a vitamin mix or some other small slipup."

Organic is no excuse for poor animal health. As Benoit explains, "The USDA standards (on which the Canadian certification standards are based) are quite clear: if an animal needs treatment (such as) antibiotics, it must be treated. They certainly don't want the image that organic guys don't look after their animals. However, once the animal has received treatment, it's out of the program forever and must be sold into the conventional system." Most organic producers use a coloured eartag system so that treated animals can be easily identified and separated for conventional sale.

The dollars and cents of it
Environmental sustainability is certainly a priority for organic producers. But, financial sustainability is top of mind too. Whereas commodity producers throw a prayer to the wind when they send their calves to auction, organic growers are more immediately linked to the consumers and, therefore, have more control over prices.

"In organics we say, 'This is the price of the product. If you want it, you have to pay what it costs'," says Keith Everts, a Pincher Creek area rancher, who raised beef conventionally for a decade and a half before switching to organic beef production 14 years ago. "It's definitely about telling the story and asking the consumer to step up to the price."

"If you can't do it economically, explain it to (the consumer)," he says. "If we're not getting that price, why would we do it?"

Everts and six other southern Alberta ranches make up the Producers of the Diamond Willow Range, an organic beef production company. With sister company Diamond Willow Organics Ltd. handling the marketing side of the business, these ranchers make up a value chain that carries calves from birth to slaughter to grocery store shelves. Today, Diamond Willow sends the equivalent of between 45 and 50 carcasses to retail shelves, 52 weeks a year.

"Because we do the full value chain, we can dictate the price at the retail level. We can play with the opportunity costs a bit. Are we making money? Well, during the worst times, let's say we didn't lose as much as conventional guys," he says.

Here to stay
Is organics a fad? Not a chance, say growers and consumer analysts alike. "Organics are something that people want. It's like saying cranberry juice is a fad; (it's) like saying 'we've got milk, we've got orange juice, why would we need cranberry juice?'," says Everts. "Consumers are going to ask for certain things and entrepreneurs are going to figure out how to make them."

According to Agriculture and Agri-Food Canada, the total value of organic food products (including imported products) sold in Canada through all retail channels was estimated at $2 billion in 2008, up a whopping 66 per cent over 2006. $925.8 million, or almost half of the total, was sold through conventional retail; $400 million was sold direct to consumer; and $712 million was sold through specialty outlets like markets, natural health stores and food services.

According to a Canadian Organic Growers (COG) report, there were 319 organic farms operating in Alberta in 2009, about eight percent of Canada's total number of organic farms. Though Alberta's organic farms still only account for about a percent of the total farms in the province, the number increased an impressive 23 percent year over year. And the associated infrastructure required for a viable organic industry is increasingly in place as well: in 2008 there were 62 organic processors (including food manufacturers & seed cleaners) and eight organic handlers (including packers, brokers & retail) in Alberta.

Currently, demand outstrips supply by a wide margin. "We could definitely go higher (in sales) if we wanted to. There's more demand for organic now than I've seen since we started," says Everts. "The EU is there; Asia is huge. But, we can't supply enough product even here in Canada, so why would we chase all over for markets?"

The "us versus them" phenomenon
For the most part, Everts finds that conventional producers are very supportive, once they realize that Diamond Willow producers are, first and foremost, good cattlemen. The respect goes both ways.

"We're not saying conventional beef is bad. Conventional guys taught me how to raise beef and to be a farmer. Why would I pick on my mentors? We just say this is another meat that people want," says Everts. "Organics is the same as any other specialty niche. Some guys raise Herefords; that works for them. Some guys raise Limousins; that works for them. We raise organic beef because it works for us."

Words of Wisdom
Everts recommends young guys considering beef production look to organics but he says it's about a whole lot more than just the organic label. "It's not just being organic, it's understanding all your costs, understanding your consumer and being part of a value chain. Otherwise you're just a raw material supplier at the mercy of the market. What I would say to young guys is partner up with someone who is going to be there for a long time. You need to be part of something bigger, part of people who are moving forward."