UNITED STATES DEPARTMENT OF AGRICULTURE 

AGRICULTURAL MARKETING SERVICE 

BEFORE THE ADMINISTRATOR 

) 

Inre: ) 

The Ostrom Mushroom Company ) 

Dba Ostrom Mushroom Farms ) 

Olympia, Washington ) 

Administrator's Decision 

APL-023-18 

This Decision responds to an appeal (APL-023-18) of a Notice of Noncompliance and 

Proposed Suspension of National Organic Program certification issued to The Ostrom 

Mushroom Company, dba Ostrom Mushroom Farms of Olympia, Washington, by Oregon Tilth 

Certified Organic. The operation has been deemed not in compliance with the Organic Foods 

Production Act of 1990 (Act)1 and the U.S. Department of Agriculture (USDA) organic 

regulations.2 

BACKGROUND 

The Act authorizes the Secretary to accredit agents to certify crop, livestock, wild crop, 

and/or handling operations to the USDA organic regulations (7 C.F.R. Part 205). Certifying 

agents also initiate compliance actions to enforce program requirements, as described in section 

205.662, Noncompliance procedure for ce1iified operations. Persons subject to the Act who 

believe they are adversely affected by a noncompliance decision of a ce1iifying agent may appeal 

such decision to the USDA Agricultural Marketing Service (AMS) pursuant to § 205.680 

Adverse Action Appeals Process - General, and§ 205.681, Appeals of the USDA organic 

regulations. 

1 7 u.s.c. 6501-6522 2 7 C.F.R. Part 205 

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FINDINGS OF FACT 

1. Oregon Tilth Certified Organic (OTCO) is an accredited certifying agent under the 

USDA organic regulations. The Ostrom Mushroom Company, dba Ostrom Mushroom 

Fanns (Ostrom) of Olympia, Washington, is a handler certified under the USDA organic 

regulations. Joe Cosare is the plant manager of Ostrom. 

2. On May 4, 2017, OTCO conducted an unannounced inspection of Ostrom, noting 

numerous areas of concern during the exit interview. Specifically, OTCO found the 

sanitation material used didn't match with Ostrom's statements in the Organic System 

Plan; and the production records couldn't confam Ostrom's claim that the organic 

musln·ooms were packed first thing in the morning after the equipment had been cleaned 

and sanitized the prior evening. Additionally, Ostrom discarded the original production 

records after entering the info1mation into the computer database; and remaining original 

production records showed discrepancies with records in the database. The organic and 

conventional sales of shiitake and oyster mushrooms were not separated and identified in 

the database, and sales summaries were not available during the audit. The mass balance 

audit showed a discrepancy'with more oyster mushrooms being sold than were produced; 

and a traceback audit was unsuccessful due to missing production records. 

3. On June 1, 2017, OTCO issued a Notice of Noncompliance and Proposed Suspension, 

noting that many of the issues found in the May 4, 2017, inspection were also found in 

prior routine and unannounced inspections going back to 2014. OTCO subsequently 

agreed to mediation with Ostrom. 

4. On July 13, 2017, OTCO and Ostrom entered into a Settlement Agreement, whereby 

Ostrom agreed to revise/develop a new system to more accurately track and report 

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organic production and sales; explain discrepancies found during the May 2017 audit; 

update its sanitation program; and explain how the company would maintain records for 

no less than 5 years. Ostrom agreed that OTCO would conduct a second inspection in 

2017 at Ostrom's expense to verify sufficient implementation of the new measures. 

5. On December 14, 2017, OTCO conducted the follow-up inspection and found several 

outstanding noncompliances. 

6. On January 23, 2018, OTCO issued a Notice of Noncompliance and Proposed 

Suspension to Ostrom, for a proposed suspension of 3 0 days, citing several violations of 

the USDA organic regulations. 

7. On Janumy 31, 2018, Ostrom requested mediation, which OTCO denied in a Febrnmy 

11, 2018 letter. 

8. On March 2, 2018, AMS received Ostrom's appeal to the proposed suspension. 

DISCUSSION 

The USDA organic regulations at 7 C.F.R. 205.103, Recordkeeping by ce1iified 

operations, state that a certified operation must maintain records concerning the production, 

harvesting, and handling of agricultural products that are or that me intended to be sold, labeled, 

or represented as organic. The records must fully disclose all activities and transactions of the 

certified operation in sufficient detail as to be readily understood and audited; and be sufficient 

to demonstrate compliance with the Act and the regulations. 

The organic regulations at§ 205.272, Commingling and contact with prohibited 

substance prevention practice standard, require that an organic handler must implement measures 

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necessary to prevent the commingling of organic and nonorganic products and protect organic 

products from contact with prohibited substances. 

OTCO proposed a suspension of Ostrom's organic ce1iification which would prohibit the 

sale, labeling, or representation of its products as organic. Presenting the reasons for proposing a 

suspension, OTCO stated that mushrooms received from Ostrom's supplier were not 

identified as organic on the invoices or packaging, and Ostrom did not submit an organic 

certificate for as required by USDA organic regulations at§ 205.103. OTCO stated 

that Ostrom told them that is not ce1tified organic, but purchases organic mushrooms 

from ; however, the link between 

was not apparent in Ostrom's records. Further, OTCO found that 

oyster mushrooms from believed to be organic, were not identified as such in 

Ostrom's warehouse. 

Secondly, OTCO stated that during the unannonnced inspection of May 2017, the 

shipments and sales of organic product were not accurately recorded, with records showing more 

organic product sold than was produced. Such discrepancies had continued to date, and are 

violations of the USDA organic regulations at§ 205.103. Specifically, although OTCO fonnd 

Ostrom that had implemented improvements to its record-keeping system, OTCO found gaps 

remaining in the organic sales summary. Additionally, OTCO found a discrepancy, via an audit 

trail exercise, in Ostrom' s packing records between product packed and that sold. 

Lastly, OTCO found that Ostrom had changed its food contact surface sanitation 

materials but hadn't notified OTCO or submitted the change for approval. This represents a 

failure to report a change that could impact compliance as required by USDA organic regulations 

at§ 205.272. Specifically, OTCO found that Ostrom had changed their food contact surface 

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(b) (4) (b) (4) (b) (4) (b) (4) (b) (4) (b) (4)
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sanitation materials to include the cleaner without OTCO approval or 

notification. 

The record in this case shows that OTCO found numerous problems during the 

unannounced inspection in May 2017, leading to the June 1, 2017 Notice of Noncompliance and 

Proposed Suspension. After mediation, OTCO and Ostrom entered into a Settlement Agreement 

on July 13, 2017, whereby Ostrom agreed to revise or develop a new system in order to more 

accurately track and report organic production and sales, as well provide a description of how all 

records will be maintained for no less than 5 year, including paper reduction records and how 

these records will be easily auditable during inspection. Ostrom agreed to provide an updated 

Form HS Recordkeeping Practices to OTCO. Ostrom also agreed to update their sanitation 

program with the changes noted in the HS Sanitation and Water Practices form, and submit the 

updated plan to OTCO prior to implementation for approval. It was also agreed that OTCO 

would conduct a second inspection during 2017, at Ostrom' s expense, to verify the noted 

measures were implemented and are sufficient. Ostrom agreed to provide an adequate response 

to the noted issues within 30 days of the Settlement Agreement execution. 

At the December 2017 inspection, OTCO acknowledged that Ostrom made 

improvements to their recordkeeping procedures, and submitted recordkeeping and sanitation 

forms; however, the inspection showed continued problems in the same areas and additional 

deficiencies in recordkeeping. Finding that Ostrom had failed to sufficiently address all 

noncompliances, OTCO issued a Notice of Noncompliance and Prosed Suspension on January 

23, 2018, and denied Ostrom's request for mediation citing the repeated issues for which 

corrective actions weren't taken. 

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(b) (4)
In the appeal, Ostrom states that the issues with their purchase agreement with

not identifying the mushrooms as organic; and the failure to notify OTCO of their use of 

sanitizer, were due to oversights which have now been conected. Ostrom stated 

that it only purchases organic shiitake and organic oyster mushrooms which it then labels and 

sells as organic, or which it sells as conventional without the organic labeling. Ostrom stated 

that they were unaware that their purchase agreement with had to specify organic 

mushrooms, but they conected their paperwork and now utilize a new supplier checklist to avoid 

these issues in the future. Ostrom submitted the organic certificate for which 

reportedly supplies

Ostrom also stated in the appeal that the discrepancies between production and sales 

records; and the failure to distinguish between conventional and organic mushrooms in their 

sales systems, were due to limitations of their database, for which compensating measures have 

been instituted. Ostrom stated that the purchase and shipment of organic shiitake and organic 

oyster mushrooms are entered into their database; and although their sales document system and 

the manual log do not completely align, all the shiitake and oyster mus1n·ooms in physical 

inventory are organic. Ostrom stated that English is a second language for many of its 40 

employees, which creates problems with the manual log; however, the database is correct 

regardless if it doesn't synch with the manual log. Also, Ostrom stated that although there 

wasn't a separate designation in the sales system to differentiate organic from conventional 

SKUs, they haven't purchased conventional shiitake or oyster mus1n·ooms, and can now track 

conventional organic mushrooms separately in the sales system. Ostrom also stated the organic 

mus1n·ooms are separated on the warehouse floor, and are packed first in the morning. Ostrom 

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(b) (4)

(b) (4) (b) (4) (b) (4) (b) (4)
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stated they have now listed sanitizer in the OSP, and had merely neglected to tell 

OTCO. 

The appeal essentially admits fault, with Ostrom stating that the deficiencies in their 

purchase agreement with and the failure to notify OTCO of their use of

sanitizer were due to oversights; and that discrepancies between production and sales records, 

and the failure to distinguish between conventional and organic mushrooms in their sales 

systems, were due to database limitations. Subsequent to filing the appeal, Ostrom stated they 

had revised their tracking log for organics received and packed, and submitted a new Organic 

Tracking Log. Ostrom explained that the minor discrepancies seen on the Log between pounds 

in customer orders and pounds used from inventory is the usual 'overfill' that accompanies both 

incoming cases of mushrooms and out-going filled orders. Ostrom stated that all suppliers allow 

some overfill to account for shrinkage of product during transportation and a reasonable holding 

period; and the discrepancy is accounted for in the Loss, Shrink and Overfill reporting at the end 

of each month. 

Ostrom's newly submitted Organic Tracking Log was sent to OTCO; AMS asked OTCO 

to dete1mine if this addressed any of the noncompliances cited as the basis for the January 23, 

2018 Notice of Noncompliance and Proposed Suspension. OTCO replied that the new log is for 

March 2018, and doesn't address or change any of the noncompliances noted on January 23, 

2018. OTCO noted that the log may have been provided to show Ostrom is making steps in their 

recordkeeping procedures, but without having an inspector conduct audit trail exercises, it is not 

possible to tell if the log is enough to accurately track the usage/sales of mushrooms. Further, 

OTCO stated that Ostrom's recordkeeping problems are long-standing and would require more 

than a slightly revamped production log to satisfy recordkeeping noncompliances. 

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(b) (4) (b) (4) (b) (4)
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Therefore, while Ostrom has made improvements to its recordkceping system, as 

previously acknowledged by OTCO, and completed a Recordkeeping Practices form, a traceback 

audit still showed a discrepancy between product packed and product sold, and a newly 

submitted Organic Tracking Log doesn't address the recordkeeping noncompliances. Fruther, 

Ostrom's sales doclllllent system and the manual log still do not completely align, which Ostrom 

attributes to English being a second language for many of its 40 employees. It is not sufficient, 

as Ostrom states, that the database is correct if it doesn't align with the manual log. 

Additionally, although Ostrom submitted the organic certificate for as well.as 

a receipt for a recent purchase by of organic mushrooms fro Ostrom's 

records don't clearly show the relationship between Also, Ostrom 

hasn't documented its claim that the organic product is packed first in the morning after the prior 

evening's cleaning and sanitation of the area; and oyster mushrooms in boxes, 

assumed to be organic, weren't identified or labeled as organic. Lastly, although Ostrom 

completed a Sanitation & Water Practices Form, and updated its OSP to show that the change 

from quattemary atnmonium sanitizer to Sanidate 5.0, OTCO then found that the OSP didn't 

describe how food contact surface cleaner was being used. 

Ostrom has failed to completely resolve the still outstanding noncompliances, despite 

some improvements in recordkeeping a11d the submission of additional documentation. OTCO 

has worked to help Ostrom come into complia11ce, conducting mediation which resulted in a 

Settlement Agreement, conducting a follow-up inspection, and requesting additional 

documentation and explanations. However, Ostrom has been unable to fully come into 

compliance and adequately address all the noncompliances raised by OTCO. The record shows 

a pattern of OTCO finding a problem, and Ostrom correcting the problem, though not always 

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(b) (4) (b) (4) (b) (4) (b) (4) (b) (4) (b) (4)
completely, only for OTCO to discover another problem. Further, Ostrom was subject to the 

terms of the July 13, 2017 Settlement Agreement when OTCO found repeated and new problems 

in their December 2017 inspection, which was to verify that corrective actions had been taken in 

various areas of noncompliance. 

CONCLUSION 

The availability of complete and coherent records for ce1iifiers and inspectors is a basic 

requirement for organic certification and is essential to oversight. Failure to maintain or make 

available necessary documents precludes a certifier from verifying that practices throughout the 

handling cycle comply with the USDA organic regulations. 

Appellant has shown systemic and repeated violations of the organic regulations. Due to 

the absence of essential information in the records concerning its handling practices and use of 

sanitizers, Ostrom cannot demonstrate compliance with the recordkeeping (§ 205.103), and 

sanitation(§ 205.272) standards to maintain organic certification. 

DECISION 

The appeal is denied and The Ostrom Mushroom Company, dba Ostrom Mushroom 

Farms, is to be suspended. Attached to this formal Administrator's Decision denying Ostrom's 

appeal is a Request for Hearing f01m. Ostrom has thitiy (3 0) days to request an administrative 

hearing before an Administrative Law Judge. 

If Ostrom waives the hearing, the Agricultural Marketing Service will direct OTCO to 

issue a Notice of Suspension. At any time after suspension, Ostrom may," ... submit a request to 

the Secretary for reinstatement of its certification. The request must be accompanied by evidence 

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demonstrating correction of each noncompliance and corrective actions taken to comply with and 

remain in compliance with the Act and the regulations in this part." 

Done at Washington, D.C., on this _/.J"!:_ 

dayof :5~ ,2018. 

Bruce Summed' 

Administrator 

Agricultural Marketing Service 

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