Those who fail to learn the lessons of history

Well, they're doomed to repeat them, of course. Here is a well done retrospective by Jay Lehr on the Alar scare on apples back in 1989.

Of particular note is this ending thought:

While most people still recall the historic Alar scare, few recognize the malevolent intentions of the groups involved. Thus, similar unjustified scare campaigns are likely to be repeated.


TK: Never has been the industry as vulnerable to a scare campaign as now. We can take some comfort that CBS, one of the players in the Alar scare, did a balanced job earlier this week in an evening news series on food safety.

Trouble in border town

That's what we hear in this report from The Tucson Citizen. A spontaneous demonstration and Mexican trucker strike occurred at the Mariposa port of entry in Nogales on Wednesday and Thursday in response to border wait times of four to six hours. Normal wait times are one to two hours, truckers said. The culprit?
From the story:

Since Jan. 25, trucks entering the United States through Arizona, Washington and North Dakota must have electronic manifests as a part of a program called the Automated Commercial Environment, which U.S. Customs and Border Protection developed to strengthen national security and facilitate trade.
"Unfortunately, the system still has kinks," said Allison Moore of the Fresh Produce Association of the Americas, which is based in Nogales, "and the industry has become the guinea pig to work out those kinks."


TK: Hopefully the kinks get worked out before the CBP program is applied to all ports. The Fresh Produce Association of the Americas helped to mediate an end to the strike, and they should be commended for that. CBP has promised to meet with Representatives of Mexican trucking interests to prevent incidents in the future. Sources quoted in the story noted the port needs to be upgraded to handle more volume, which now can be up to 2,000 truckloads of produce per day during peak season Drug seizures are also up, the CBP says, which has slowed trade somewhat.

New rules and links

The USDA had a flurry of grades and standards related rule making this week. Here is a new notice about greenhouse tomato grades, another about tomatoes on the vine, another in kiwifruit packaging, another about Idaho-eastern Oregon onions and yet another on winter pear grades. Whew!

One intriguing notice about avocados came across on Feb. 15. Find it here.
From the notice:

The Administrator, Foreign Agricultural Service (FAS), today accepted a petition filed by the California Avocado Commission representing California avocado producers for trade adjustment assistance. The Administrator will determine within 40 days whether or not increasing imports of avocados contributed importantly to a decline in domestic producer prices of 20 percent or more during the marketing period beginning November 1, 2005, and ending October 31, 2006. If the determination is positive, all producers who produce and market their avocados in California will be eligible to apply to the Farm Service Agency for no cost technical assistance and for adjustment assistance payments.

TK: It can't hurt to apply for TAA, but my impression is that it doesn't deliver much assistance. At some future date, I think California growers may look to apply for a heaping measure of help if Mexico's new found access to the California market weights heavy on hass prices in California. Will California growers chafe at Mexican imports and demand some kind of anti-dumping action if prices plummet? I've heard nothing of the kind and it would certainly run counter to the feel good avocado story of smart promotions and expanding demand, so it's unlikely. But Mexican access to California is uncharted territory, so it will be interesting to watch.



By the way, Fred Webber and Pat Hanemann of the DRC were in the office yesterday to meet with Lance and others, and they alerted me to another worthy link for my blog. Find a searchable database of motor carrier safety records here. I have also added this link that is a searchable database of U.S.-approved biotech crops.

I hope you all take at least one lazy afternoon, one idle lunch hour, to explore the links. I think you will find a lot of utility out of them.

Study tallies cost of removing planting restrictions

A study sponsored conducted by Informa Economics, McLean, Va., and prepared on behalf of this list of produce associations (and Sunkist) was circulated in Washington this week.

These were the groups listed on the report:

Georgia Fruit and Vegetable Growers Association
Idaho Potato Commission/Idaho Grower Shippers Association
National Potato Council
Washington State Potato Commission
Colorado Potato Commission
Empire State Potato Growers
Maine Potato Board
Texas Produce Association
Western Growers Association
Florida Fruit and Vegetable Association
Sunkist, Inc
Florida Tomato Exchange
United Fresh Produce Association



From the report's executive summary:

This research attempts to quantify effect on the specialty if the planting restrictions are eliminated. It considers the two factors identified above: the potential for cross-subsidization of new specialty crop acreage if the restrictions are lifted (i.e., the primary effect that the restrictions are intended address) and the market impact (in terms of reduced prices and revenues) that existing specialty crop producers would likely face as a result of the increase in supply expected following the elimination of the planting restrictions (i.e. the secondary effect of decades-long policies that have discouraged program crop farmers from entering the specialty crop market). The costs to the specialty crop sector from these two factors combined are estimated at nearly $4 billion.


TK: Congress needs to account for this potential damage to the industry early on in farm bill discussions. Either fully compensate for the loss of the provision or take it off the table. Any 11th hour handling of this issue is bad news for the industry.


For the complete executive summary, use this link.

Power down

I stayed home from the office this morning to go with my wife to our daughter's parent-teacher conferences (curse you, algebra and chemistry) and later I reported to work only to find out the whole building at 10901 West 84th Terrace was empty. A sign on the door said a transformer snapped and blew out the power for our office.

So if you wondered why weren't manning the stations today, that is the story. We should be back Monday.

Organic Divide: Part II

The USDA's Economic Research Service analysis looks at the "catch 22" of organic produce - future demand growth depends on smaller premiums between organic and conventional, while organic supply growth depends on continued hefty premiums. Here is a spreadsheet showing the price spread on broccoli.
Here is the gist of the long report:

The trends in price premiums for broccoli and carrots over time suggest that, for the time being, even though certified organic acreage is rising rapidly, demand appears to be growing fast enough so that farmers and wholesalers are maintaining an organic premium. Interestingly, the wholesale organic premium consistently exceeds the organic premium at the farmgate for broccoli and carrots. In contrast, wholesale price premiums and prices for both organic and conventional mesclun mix have continued to narrow since the mid-to-late 1990s.

TK: Keeping the chain reaction of expanding supply and building demand is a precarious formula, but this analysis seems to say growers are still finding enough premium to expand acreage. It would certainly be easier to track organic premiums if more organic prices were reported by the USDA market news.


The Packer's Susie Cable passes along this link to a Business Week story about Chipotle Mexican eateries. Here is a quote that relates to organic from the piece.

Today, all of the pork Chipotle sells in its burritos and tacos comes from hogs raised naturally on family farms, without antibiotics or hormones. But while Chipotle uses fresh avocados, tomatoes, and peppers, almost none of its produce is organic. It's simply too expensive, says Ells.

The organic divide holds

The USDA's Economic Research Service has just released a new set of figures that compare organic and conventional fruit and vegetable prices. In addition, the ERS published a 22-page document titled "Price premiums hold as U.S. organic produce market grows."

As the title suggests,this report is encouraging news to organic produce marketers. Here are some excerpts from the report:

NBJ reports $4.3 billion in U.S. sales of organic produce in 2003, or 42 percent of total U.S. sales of organic foods. Of this amount, fresh produce accounted for the largest share (93 percent). NBJ estimates that sales of organic fruits and vegetables in 2010 could reach $8.5 billion, an increase of more than 300 percent over sales in 2000. Although organic food sales make up a small portion (1.8 percent) of total food retail sales in the United States, some organic fruit and vegetable categories have higher market penetration rates than others. For example, in 2002, organic fresh fruit and vegetable sales accounted for 4.5 percent of total fresh fruit and vegetable sales.

The top fresh organic fruits and vegetables purchased in the United States are tomatoes, leafy vegetables, carrots, apples, potatoes, peaches, bananas, and squash (The Packer, 2002). Other high-selling produce items include strawberries, beans, mushrooms, cantaloupe, celery, broccoli, and oranges. Consumers tend to buy more organic vegetables than fruit. Organic produce has long been the top-selling organic food category, and it is becoming more accessible to consumers as supermarkets and other conventional retail channels continue to add the products to their shelves. In 2003, 47 percent of organic foods were sold through conventional channels, 44 percent were sold through natural food stores, and 9 percent were sold through direct and other marketing channels (e.g., farmers’ markets, restaurants, exports) (OTA, 2004).

The organic industry is also contributing to the fast-growing trend of packaged produce items in supermarkets Dimitri et al., 2003). Natural Foods Merchandiser reports that sales of packaged fresh produce had the highest growth rate among sales of all organic products during 2002-2003, expanding 26 percent to $364 million. Conventional supermarkets accounted for three-fourths of this total. The number of new organic produce items introduced in retail markets has doubled over the last decade, from 14 in 1993 to 30 in 2003 (USD A, ERS, 2005). Branding of fresh produce is becoming more common, much of it due to the introduction of new packaged and fresh-cut products. This trend is apparent in the organic sector, where more growers and distributors are identifying their products with their farm name and logo. Among the most prominent brands are Cal Organic, PureVeg, Earthbound Farms, and Pavich—all of which are California based, and some of which have joined forces (either through mergers or joint ventures) with conventional produce firms (NBJ, 2003).

TK: More coming

Bring down the walls

The U.S. is pressing Japan to accept more U.S. agricultural exports, this time he isn't kidding.
From the VOA:

The American ambassador to Japan said if Japan does not open its markets, then "we will just put our resources in other places." Ambassador Thomas Schieffer gave that warning in a speech Wednesday to business leaders in Tokyo.
Food prices in Japan are among the highest in the world as a result of efforts to protect Japanese farmers. Japan imports more than half of its food. But it places high customs and other restrictions on many products, especially rice, fruit and beef.

TK: Though electoral reform in 1994 made Japan somewhat more consumer focused, the farm lobby is still powerful. Total U.S. ag exports to Japan were $7.9 billion in 2005, down significantly from $8.9 billion in 2001. U.S. fruit exports in 2005 were just $305 million, down from $364 million in 2001. Meanwhile Toyota is on track to become the number two car maker in the U.S. What's wrong with this picture?


In South Korea, negotiators there are trying to keep fruits and vegetables out of the U.S.-South Korea Free Trade Agreement by conceding market openings on some types of rice products.
From the story:

An Agriculture Ministry official said on condition of anonymity, "There are some kinds of rice commodities whose opening would not have a significant effect on the local market...Is it possible to make a compromise in some parts to keep other sensitive areas such as fruits and vegetables out of negotiation?"


TK: Memo to U.S. negotiators: Don't bring back a free trade agreement with South Korea that doesn't include fruits and vegetables.

Point and counterpoint

Seattle lawyer Bill Marler co-authored this opinion piece that run in a Buffalo paper yesterday.
He used the unfortunate comparison of Upton Sinclair's "The Jungle" in relation to produce processors.
From the opinion piece:

Today, the apparent greater risk to the public is not meat, but produce. As many as 150 people across the Northeast and upper Midwest became ill after eating contaminated lettuce at fast-food restaurants. Many landed in hospitals.
A few months ago, 200 people got sick and at least four died from eating contaminated spinach. Three similar outbreaks occurred since 2002.
The Food and Drug Administration reported 21 E. coli outbreaks related to fresh leafy produce in the last 10 years with nearly 1,000 sickened. Many victims of the Taco Bell E. coli outbreak were residents of upstate New York.
To prevent future outbreaks, we need to follow the example of the Inspection Service and Meat Institute, and serve notice to produce processors that E. coli will no longer be tolerated in fresh produce.
Moreover, Congress should conduct hearings to consider:
Production of an E. coli vaccine for cattle.
Irradiation for all mass-produced foods, including produce.
Updating our food safety regulations (given post 9/11 risks).
State and/or federal authority to order product recalls.
Establishment of a single federal agency responsible for all food safety.
Clarification of state agencies' role in the network of defense against food-borne illnesses.
Better funding for state health departments.
Better treatment for victims of E. coli.
Taking these steps will help prevent people from being sickened by eating what is supposed to be good for them.

TK: For every opinion piece written by lawyers that gives the industry no more credit than a corrupt 1900 Chicago meat packer, there should be an aggressive response detailing the industry's focused energies to prevent further outbreaks. It calls to mind the need for a nerve center for produce safety, a public relations effort that engages critics and assures the public that produce is indeed good for them. While there may be points of agreement with critics like Marler and it is true the industry can't point to a finished work on food safety, it is unacceptable to let his broadbrush characterization stand.