Exempt Organic Wheat from Weighted Average Margin Percentages added to Durum Wheat and Hard Red Spring Wheat:
Comments of the Organic Trade Association on the
Notice of Preliminary Determinations of Sales at Less Than Fair Value
International Trade Administration
Department of Commerce
Associate Policy Director
June 27, 2003
The Organic Trade Association (OTA) thanks the International Trade Administration (ITA) for this opportunity to comment. OTA represents over 1300 business across all sectors of the organic industry, and is the only industry-wide business association for the organic industry in North America. OTA has 1221 U.S. members and 72 Canadian members. This comment is being submitted on behalf of all OTA's members.
Organically produced agricultural products are in effect different commodities in the market than their conventionally produced counterparts. This is true from the producer level, where organically produced products sold in the United States must meet the strict requirements of 7 CFR §205 (which adds to the cost of production), to the retail level, where stores use price look-up (PLU) numbers with a prefix of "9" to indicate organically produced goods. Even distribution channels are often distinct for organically produced goods. OTA refers ITA to USDA's Economic Research Service; Resource Economics Division; Production, Management, and Technology Branch for detailed information.
Organically produced wheat is uniformly more expensive than conventionally produced wheat, with prices typically ranging from approximately $5.00 to $8.00 per bushel, as compared to a typical price of $3.00 per bushel for conventionally produced wheat. OTA would refer ITA to a detailed report on feed grains produced by USDA's Agricultural Marketing Service for related and relevant information. OTA knows of no studies done specifically on the prices of Durum Wheat and Hard Red Spring Wheat but expects the general pattern of higher prices for organically produced goods to hold true, and specifically expects prices of feed grain and food-grade grain to be similar.
The price competition for organic wheat is entirely within the organic market. Neither the Canadian Wheat Board nor the Chicago Board of Trade collect or set prices for organic wheat, so there is no price competition at that level of trade. OTA has received no complaints from members regarding any issue of unfairness in the pricing of organic wheat.
Because organically grown wheat is effectively a different commodity from conventionally grown wheat, OTA requests that organically produced wheat (that is, wheat produced and certified to the standards of 7 CFR §205) be exempted from the weighted average margin percentages added to Durum Wheat and Hard Red Spring Wheat in this determination.
Thank you very much for your consideration.