USDA Standards: To Certify or Not to Certify?

By Nancy Ash
March 01, 2011

As an olive oil producer, you make decisions everyday that affect the success of your sales efforts. From planting trees, through myriad choices for cultivation, harvesting and milling, to the selection of packaging, you carefully consider every detail involved in creating your product. The new USDA standards introduced a new consideration: should you submit your oil for USDA certification? The answer is not purely a cost/value analysis. It is also important to weigh the possible benefits and risks of submitting your oil for government scrutiny.

First, consider the process for submitting the sample. Unlike other certification programs, such as the California Olive Oil Council or North American Olive Oil Association, the producer or importer is not permitted to submit samples themselves. Instead, it is required that samples be drawn by a USDA inspector, charged at a rate of $62 per hour for inspection and travel time. The number of samples drawn will depend upon the size of the holding unit (i.e. tank or drum), with each sample corresponding to its specific source; when the sample passes all tests, the certification only applies to that specific holding unit.

While this procedure may work for some domestic producers, how are samples of imported oil, which account for 99% of U.S. sales, submitted? Since USDA inspectors cannot obtain samples from holding tanks in other countries, samples will be collected from the first owner of the oil in the U.S., which is the importer. Most oil is already bottled and labeled before shipping, and it is unclear how many bottles are required to represent different lot sizes. It is also unclear what the consequences are if tests on several bottles from one lot do not concur.

While the above outlines procedural concerns, there is a more important issue at stake. Since USDA certification is voluntary and not mandatory, it is possible that an oil that does not pass extra virgin certification testing could still be sold and labeled as extra virgin.

These inequities create a very confusing situation. Although the USDA standard offers legal definitions for grades of olive oil, certification in support of those grades is voluntary. If the voluntary certification process impedes an importer’s ability to sell product, the risk to them outweighs the benefit. At best, certification means earning the USDA Extra Virgin mark (shield) to add to a label (but remember this product is already labeled) and at worst an importer could face legal ramifications for selling product that does not meet standards.

From the USDA’s perspective, they consider their third-party certification service as a tool for buyers and sellers - allowing sellers proof that their product meets specific grade standards. If testing results in standards having not been met, sellers would be advised, but not forced, to re-label their products. Although test results could be reported to the FDA (label compliance is FDA jurisdiction), sources confirm that the FDA has informed the USDA that grades of olive oil are not viewed as dangerous health concerns and they will not take action.

Since USDA certification is too risky for importers, perhaps it can benefit domestic producers who have the opportunity to label their oil with the USDA shield. Further, it would make sense that the USDA designed the certification program in support of the growing domestic industry. But the downside is that the majority of domestic producers cannot afford the additional costs associated with certification; smaller producers already have prices at the high end of what the market will bear, and large producers struggle to compete with lower priced imports that dominate supermarket shelves (and frankly won’t submit to certification until it is mandatory).

Despite the above issues, the new USDA standards have the potential to positively impact the marketplace. The standards establish olive oil grades in the language of the international industry (though some limits differ slightly). It gives notice to foreign producers that the American consumer is becoming better educated about olive oil. These new standards are the U.S. government’s way of acknowledging the domestic industry, and taking steps that help level the playing field between domestic and imported oils.

What could make the USDA certification program work? The demand for USDA certification needs to be driven by the marketplace, which will involve outreach to retailers and consumers. If retailers begin demanding that oils labeled as extra virgin be certified as USDA Extra Virgin, producers and importers would eagerly participate. This is what occurred in the organic industry; when retailers demanded USDA Organic certification for organic products, producers reacted.

On the consumer side, many Americans still do not understand what “extra virgin” means, and they are constantly bombarded with confusing label language such as “extra light”, “certified authentic” (used by Colavita to identify that the oil is really from Italy) and “first, cold-pressed” which despite popular misconception does not mean that the oil is extra virgin quality. Additionally, consumers are confused by the USDA Organic shield on olive oil labels, incorrectly assuming that it ensures the quality of the oil along with the use of organic practices.

Establishing the new USDA standards and certification program took six years of effort by many people, and although imperfect it portends movement in the right direction. The weakness is that these standards are voluntary, and it will take involvement by the FDA, which oversees labeling regulations, to achieve mandatory standards. It is the FDA, and not the USDA, which has the authority to create a more honest marketplace for olive oil that will benefit domestic producers as well as American consumers.