CGCI 1

Maintaining Integrity and Quality of Organic Grains from

Producer to Processor

Methyl Bromide Alternatives Workshop at KSU, May 11-13, 2010

Rick Bucker, Ph.D.General Manager

Clarkson Grain Co., Inc.Cerro Gordo, Illinois 61818

rick.bucker@clarksongrain.com217–763-2861

www.clarksongrain.com

CGCI 2

Clarkson GrainNiche Focused & Client Driven

Provide IP and organic grains, oilseeds and ingredients to the food & feed industries Corn – white, yellow, blue, waxy Soybeans Organic lecithin

Identity Preservation (IP) – Segregated by Variety Organic or non-GMO Flavor/Color/Composition Specific hybrids to meet customer requirements

Clients in North America, Asia, EU, and South America

Production in North America and China

I Want to go OrganicNow What?

CGCI 3

Rules & Regulations Documentation

Ingredient Cost & Availability

Maintaining Quality

Inspections

Pest Management

Education & Training

What Does Organic Mean?

Organic is an agricultural methodology that promotes environmental sustainability, fosters animal wellbeing and enhances biodiversity and the preservation of ecological systems.

CGCI 4

Why do Consumers Want Organic Foods?

No pesticides or synthetic fertilizers President’s panel results

Not made with GMOs Better flavor More nutritious Better for the earth

CGCI 5

The Organic Market U.S. sales of organic food & beverages hit

$24.8 billion in 2009, up 5.1% Food sales grew by only 1.6%

Organic foods were 3.7% of food sales in 2009 compared to 1.2% in 2000

Organic fruits and vegetables represent 38% of total organic sales $9.5 billion in sales in 2009, up 11.4%

from 2008

CGCI 6

Full Circle

CGCI 7

CGCI 8

Organic is IPIP What?

IP stands for Identity Preservation Maintain identity based on segregation from the seed to the

manufacturer Involves the whole supply chain

Referred to as specialty, premium, high value or niche market grains or oilseeds Not a commodity USDA graded product

IP grains/oilseeds are chosen for their specific end use Requires a premium for the farmer to grow Organic is an example of Identity Preservation

CGCI 9

IP/OrganicIt’s a Storage Thing!

Farmer A

Farmer B

Farmer C

Commodity Identity Preservedor

Organic

Segregation!!!

CGCI 10

Non-GMO Another IP & Organic Challenge

Market dominates, not production, not the farmer

Markets and clients differ

US – no official claim EU Base – 0.9% Extreme – 0 - 0.1% Korea – GMO free Official versus commercial standards – ex. Japan

GMO free

Wind drift

The ethanol tsunami

CGCI 11

US Organic 101 Organic is a process claim,

not a product claim

Regulated under USDA National Organic Program (NOP)

Since October 21, 2002, it is a federal offence to label any food product “organic” unless it has been certified

Certification is required Approximately 55 US agencies Approximately 40 International Agencies

CGCI 12

US Organic Regulations Regulations

Irradiation, sewage sludge and genetically modified organisms prohibited

Reflects NOSB recommendations for items on the national list of allowed synthetic and prohibited natural substances

Antibiotics are prohibited in organic meat and poultry feeds

100% organic feed required for organic livestock

Natural has nothing to do with Organic

I Want to go Organic What Can I Expect?

Documentation & inspections

Limited pest management tools

Higher cost

Limited availability/planning CGCI 13

The Organic ChainMultiple Links Required

Seed Supplier Farmer Cleaner/Producer Manufacturer Retailer Restaurant Consumer

CGCI 14

Organic Food/Feed ChainLimited Tools for All

Rodent Control No poisons, mechanical traps only

Insect control Cleaning & sanitation Moisture control Time of year/temperature Diatomaceous earth Beneficial insects

CGCI 15

Fumigation

Light traps Pheromone traps CO2

CGCI 16

Seed Supplier

Soy Variety “Wildcat123” Acceptable process quality Acceptable agronomic quality Organic under US rules, EU rules, other

Purity Variety – 99% GMO – 99.9%

3rd Party Approval – pre or post delivery

CGCI 17

Organic FarmerTransitioning to Organic

US Organic farm certification 3 year process

Transition required Rodale Institute

http://www.tritrainingcenter.org/code/index.php

‘cides

CGCI 18

Organic Farmer Available markets

Food and Feed Contracts/premiums

Generally smaller scale Limited tools

Fertilizer Weed & insect control

Great attitude Good infrastructure

Follows protocols Program hygiene Set backs Coordination with

neighbors

CGCI 19

Organic Farmer - continued Segregation

Planting Harvesting Handling Storage Shipping

Storage & monitoring

Education & training

Organic yearly inspection

Sample submission

Farmer’s Embrace Biotech Crops Farmer Benefits

Insect resistance Herbicide tolerance

Biotech Varieties Introduced in 1996

GMOs Today Soybeans – 91% Corn – 86% Cotton – 88%

CGCI 20

Processor/Cleaner

Specifications/contract Farm inspection & samples Storage on farm or at the

processor Receiving & testing

Quality Mycotoxins – aflatoxin,

fumonisin and vomitoxin

Education & training

CGCI 21

Processor/Cleanercontinued

Minimize handling Organic purges required Monitor bins & product Insect control & monitoring Cleaning & sanitation Record keeping & yearly

inspections Product returns

CGCI 22

Time of year - “Gut Slot” deliveries Just in time cleaning

& deliveries Insect life cycle CO2

Processor/Cleaner – process

Precleaning Aspiration Cleaner/gravity table Destoner Color sorter

CGCI 23

Bugs

Crop Quality Can Vary2009 Crop

Very poor quality Wet storage Over drying Cracked, broken corn Processing problems

Growing conditions Late planting Late harvest

CGCI 24

2010 Crop

Pest Management Criteria

Effective

Timely

Cost effective

CGCI 25

Various Insect Control Methods

Vacuum

Nitrogen

Heat

Ozone

CO2

SpinosadCGCI 26

Food Manufacturer

CGCI 27

CGCI 28

Higher Prices for Organic Raw Materials

Yellow Corn - bulk US#2 Feed $3.75/bu Food $4.00/bu Organic $5.00/bu

White Food Corn - bulk Conventional $4.50/bu Organic $9.00/bu

Blue Corn - bulk Conventional $14.50/bu Organic $24.00/bu

CGCI 29

The IP Supply ChainWork with Your Supplier

Once you select an IP or Organic corn hybrid:

Not available “off the shelf” Contracting with the farmer from August to January Planting in April, May and early June New crop available from September/October on

When it is gone, it is gone!

Organic Manufacturer Requirements

Contract/specifications Zero insects Live or dead insect(s) Primary or secondary feeder

Cleaning/sanitation Just in time deliveries

Clean drop gate Truck purge

Education & training Facility and stored grain monitoring

CGCI 30

Bugs

Insect ControlWhose Bug?

CGCI 31

Supplier Shipping Food Manufacturer

Bugs Don’t Carry Identification Papers

Insect identification ID please

Education & training

CGCI 32

Consumer Confusion

Organic Labeling

GMOs

Natural

CGCI 33

CGCI 34

Organic Labeling European Union (EU)

It is either organic or not

United States Multiple Organic categories

CGCI 35

Organic Labeling in the US Four Labeling Categories

100% Organic Must contain 100% organically produced ingredients not

counting water and salt May carry the USDA Organic Seal

Organic Must contain at least 95% organic ingredients by weight

not counting water and salt May contain up to 5% of non-organically produced

agricultural ingredients or other substances allowed by 7 CFR 205.605

Must not contain added sulfites May carry the USDA Organic Seal

CGCI 36

Organic Labeling in the USContinued

Made with Organic Ingredients (or similar wording) At least 70% of the content is organic Front panel may display the phrase “Made with Organic” followed by

up to three specific ingredients May contain up to 30% of non-organically produced agricultural

ingredients or other substances allowed by 7 CFR 205.605 May not display the USDA Organic seal

May contain some Organic ingredients listed on ingredient panel Less than 70% of ingredients are Organic May contain over 30% of non-organically produced agricultural

ingredients or other substances allowed by 7 CFR 205.605 Organic ingredients may be listed as such on the ingredient panel but

can not be mentioned on the main panel May not display the USDA Organic seal

USDA Cracks Down

Additional funding and manpower

Use of synthetic materials

Certification agencies

Producers

CGCI 37

CGCI 38

Thank You