Wal-Mart's procurement

The Packer's David Mitchell has some interesting coverage on Wal-Mart's procurement policies.
David writes:


Wal-Mart Stores Inc. has altered its procurement procedures during the past two years, but recent criticisms that the Bentonville, Ark.-based retailer has violated terms of its supplier agreements are unwarranted, the company’s vice president and divisional merchandise manager for produce and floral said.“Wal-Mart honors (its) contracts and offers the suppliers the right to talk to Lee Scott, our CEO, or Rob Walton, our chairman, through the open-door process if we do not,” said Ron McCormick , vice president and divisional merchandise manager for produce and floral.Wal-Mart suppliers were reluctant to comment on changes in the retailer’s buying practices, but sources alleged off the record that the company is increasingly using what it calls “opportunity buys” to source product from other suppliers when the market is lower than the contract price.“The expectation in doing business with Wal-Mart is not what it was two years ago,” said a supplier who spoke on the condition of anonymity.


TK: In a presentation in 2004, Roberta Cook of UC Davis points out that shippers doing long term contracts with Wal-Mart procurement can keep their portfolio of quality growers happy only by compensating them fairly for lost opportunities on the spot market. In my view, when Wal-Mart looks to "opportunity buys" when the spot market is in its favor, it could hurt the long term health of WM's contracted suppliers.

Consensus position

The Orlando Sentinel has written what I believe to the quintessential editorial on the U.S. Food and Drug Administration. The editorial has settled on a position that I believe most Americans share. Here is a summary:
FDA's oversight of food safety is inadequate, evidenced by recent foodborne illness outbreaks
The agency's funding - and perhaps its authority - is insufficient. It needs to do a better job of monitoring imports.
Congress should fix the funding problem at FDA, and FDA needs to do a better job of assessing risk.
If FDA can't get its act together, Congress should consider single food safety agency.

TK: That's about where we are. I would say Congress will give the FDA more money to solve its woes and a shorter leash.

Grow your own movement gains appeal

This AP story by Clarke Canfield published in the Salt Lake City Tribune speaks of the growing appeal of backyard gardens among baby boomers with time on their hands.
From the story:

Between E. coli scares, global warming, the ''buy local'' movement, aging baby boomers with more time to spare and a desire to enjoy the freshest of fresh, a new wave of grow your own has begun.
Heather Flores started a ''Food Not Lawns'' campaign in Oregon several years ago, and last year authored a book by the same name. There now are about 10 ''Food Not Lawns'' chapters in the U.S. and Canada.


TK: One of the sources said that consumers are confused about food miles and organic ; which is better, organic from 1,000 miles away, or conventional home grown produced locally. There is no quandary about the backyard garden. I would have to think the segment of the population that would successfully grow a garden is tiny, but the the author correctly pegs the yearning.
I remember when my grandfather had a huge garden in Russell, Kansas. I would take a bucket out to the garden and pick cucumbers and tomatoes. Perhaps one day in my leisure, it will be so again.

South Africa is looking up

The USDA's Foreign Agricultural Service reports that South Africa's deciduous fruit growers will have an up year.

From the May 25 attache report:

South Africa’s CY2007 updated deciduous fruit production figures are expected to reach 1.35 million MT, a 5% increase of the actual 2005/6 level because of the improvement in climatic conditions and the natural lifecycle of the trees. Total exports for 2006/7 are expected to increase by about 5% because of increased production for export. Fresh pear and apple exports may increase by about 18.4% and 4.5% respectively, while table grapes may remain the same as last year because of reduced production.


The deciduous fruit and grape industry in the Western Cape generates about $700 million in foreign exchange annually, accounting for about 40% of the total South African foreign exchange earnings from agricultural products. Total annual production reaches about 1.5 million MT for grapes, 0.55 million MT for apples, 0.15 million MT for peaches, and 0.2 million MT for pears.

Fruit South Africa is refining its role as an umbrella organization representing the subtropical, deciduous, and citrus fruit industries. The deciduous fruit industry also dismantled to form the pome (apples & pears), stonefruit and tablegrape organizations.

The Deciduous Fruit Producer Trust (DFPT) continues to handle research, plant improvement, plant certification, and the technical aspects of market access for the South African table grapes industry (SATI). SATI is the consolidated industry organization responsible for organizing all other functions of the table grapes industry.

Buying local isn't easy

Local growers face a variety of challenges when they try to hook up with retailers, but some chains like Whole Foods are making an extra effort, says this article from The Cincinnati Enquirer.

From the story:


Whole Foods Market’s produce manager for the Southeast, John Walker, says local for that company’s first Nashville store will mean Tennessee, southern Kentucky and northern Alabama. Roughly 15 percent of the produce in Whole Foods stores in the Southeast is local on an annual basis, although the amount varies by season, Walker said.Whole Foods began a $10 million annual loan program last year for local growers to expand the availability of local products in its stores and to strengthen ties with local farmers. Loan recipients get low-interest loans ranging from $1,000 to $100,000, the company said.To get local growers in Nashville, Whole Foods arranged it so local growers could chat with the company’s buyers over lunch or while sitting in rocking chairs on the center’s wraparound porch.But Whole Foods won’t necessarily prove to be a savior for every local grower.Edwin Dysinger grows a variety of fruits and vegetables on family-owned Bountiful Blessings Farm between Columbia and Centerville, Tenn. He brought a couple of flats of his strawberries to the Whole Foods meeting and learned the company pays $14 a flat, whereas he gets $26 selling directly to neighbors.


TK: There is no barrier that economic self-interest can't overcome. If consumers really want local produce and will pay for it, chains should be able to find a way to make it happen.

Organic supply and demand in China

China's demand for organic produce is growing, says this article on the effect of recent food safety scares on Chinese consumers.

From Reuters:

A clutch of dedicated shops have sprung up in Beijing, Shanghai and other cities, and major supermarket chains are also starting to offer organic fruits, vegetables, meat and washing up liquid too.
"Domestic consumption of organic food is growing, partly attributed to worries over food safety, but exports are the major reason for growth," said Luo Min, an official with the China Organic Food Development Center, which helps with certification.
Those exports were worth some $300 million last year, according to the center's figures.
Such figures are music to the ears of Zhang Lingyu, who was jailed for 102 days for promoting pesticide-free food in the 1970s, at a time when the government prioritized chemical use to squeeze ever higher yields out of China's limited farmland.
"At that time they thought I was mad. How could you produce farm products without chemical fertilizer and pesticides?" said Zhang, whose company San'an Agriculture promotes "safe food."
"But now I'm welcomed everywhere. Local governments have found their products are hard to sell because of the residues," he told Reuters.
"China depends on its cheap prices to push its products on the world market, but it ignored safety. Residues from pesticides and fertilizers are too high," Zhang said.


TK: It sounds like China needs a national certification system, as distrust of various certifications is a problem in building consumer demand.

McDonald's to add fruits and veggies?

So says this May 24 short report from the annual shareholders' meeting of McDonald's.

From the story:

From the story:

While officials of the fast-food giant gave few details at the annual shareholder meeting, they said future fruit offerings may include smoothies and side dishes. The company says it is also looking at creative ways to integrate fruits and vegetables into Happy Meals.
McDonald's says it has already had success in the US with its apple slices and salads, and that its corn cups are popular in China.

TK: I wonder if the baked potato will someday make an appearance at McDonald's. That would certainly lend a healthy option to the menu.