On the winning side?

Lee Frankel, president of the Fresh Produce Association of the Americas in Nogales, wrote this letter to the House Agriculture Committee. The letter was forwarded to The Packer by Allison Moore of the FPAA.
From Frankel's letter:

We are writing to express our concern regarding a provision included in the House Subcommittee on Horticulture and Organic Agriculture Title of the Farm Bill that will significantly reduce the importance of agriculture inspections of produce entering the United States. Section 41 of the draft bill repeals the transfer of APHIS import inspection functions to the Department of Homeland Security (DHS) made under the Department of Homeland Security Act of 2002 and requires the return of those functions to USDA. We strongly oppose this provision.

The Fresh Produce Association of the Americas, located in Nogales Arizona, is a non-profit trade association representing U.S. importers of fresh fruits and vegetables from Mexico. In our experience, agriculture inspections have received increased emphasis at ports of entry since their transfer to U.S. Customs and Border Protection (CBP), providing better protection for U.S. agriculture against invasive agricultural pests.

CBP has significantly increased staffing of Agriculture Specialists since the transfer of agriculture inspections to DHS. CBP has 30% more Agriculture Specialists on staff than when the inspection program was part of APHIS. There are now Agriculture Specialists are 150 ports, 20 more ports than were covered under APHIS. In addition, all 18,000 CBP officers now receive more intensive agriculture training, making them more effective at referring potential pest risks to CBP Agriculture Specialists. This has elevated the importance of agriculture inspections significantly at all ports of entry, making them an integrated part of all CBP frontline inspections.

Additionally, CBP has elevated the voice of the Agriculture Specialists by placing senior agriculture officials in positions to directly have input in port operations. It is clear that under the new structure longstanding issues are being addressed to ensure the accurate reporting of inspections performed at the ports and to allocate staffing based on risk assessment and need at the individual ports. Inspection priorities are now electronically and accurately transmitted to all ports of entry to ensure better consistency of inspections across ports.

Moving agriculture inspections back to USDA-APHIS would be a significant step backwards, again relegating agriculture inspections to second-class status at all ports of entry. We would like to point out that movement of this function would also be expensive and disruptive. At a time when the security of our nation at the border should be paramount, it makes no sense to engage in this disruptive and pointless move.

We would also like to bring your attention to the fact that both the Department of Homeland Security and USDA agree that the function should remain with DHS. We believe that their understanding of the cost and security implications of moving the functions at this time should be respected.

Again, I urge you to repeal Section 41 of the House Subcommittee on Horticulture and Organic Agriculture Title of the Farm Bill in order to maintain the effectiveness of agriculture operations at our ports of entry. I am also attaching a briefing document that explains the dangers of this proposal in more detail. Please do not hesitate to contact me with additional questions regarding this issue.
Sincerely,

Lee Frankel
President
Fresh Produce Association of the Americas


TK: I have a call into Lee but haven't talked to him. Although many produce trade associations support moving the border inspections back to the USDA, several industry leaders I have talked to doubt Congress has the energy or will to make it happen. Lee may be on the winning side of this debate. However, Frankel's argument that CBP has now provides better protection for U.S. agriculture against invasive pests than the USDA did would sound better coming from an association of U.S. growers, rather than a group of distributors who handle Mexican fruits and vegetables.

Avian flu preparedness

Look here for a link to the Government Accountability Office 60-page report on U.S. preparedness for pathogenic Avian Influenza. More than 60 countries have AI, - the U.S. has had three pathogenic AI outbreaks in the last 100 years - and it is probably a matter of time before the U.S. again faces the bird disease that some fear could mutate to a global killer.
The GAO said the virus has infected 291 humans, and more than half have died.
From the report:

Health experts are concerned that should highly pathogenic H5N1 (or another subtype), to which humans have no immunity, develop the capacity to spread easily from person to person, a pandemic could occur.


Rep. Rosa DeLauro, D-Conn., was unsparing in her criticism of the USDA in a news release today.
From her office:

The GAO identified four areas of concern in the USDA’s response plans. This includes a failure to identify the entities responsible for carrying out critical tasks, the resources needed, and the provider of those resources; missing components from state plans and states are most likely to discover and initially respond to an outbreak; no advance consideration for issues, like birds raised in backyards, that could increase difficulties in containing the outbreak; and no attention to the amount or source of antiviral medication necessary to protect the health and safety of responders during an outbreak.

“I am very disappointed by the findings in the GAO report about the lack of planning at USDA to prepare for an avian flu outbreak, especially considering the previous shortcomings GAO found in USDA’s avian flu plans."

TK; The risk of an uncontrolled outbreak is one reason DeLauro wants Congress to reject poultry product imports from China, Still, the GAO was more balanced in its appraisal of USDA's performance than DeLauro's comments would have you believe.

Immigration in the news

Immigration legislation advances
From the AP
The Senate voted Tuesday to jump-start a stalled immigration measure to legalize millions of unlawful immigrants.
President Bush said the bill offered a "historic opportunity for Congress to act," and appeared optimistic about its passage by week's end.
The pivotal test-vote was 64-35 to revive the divisive legislation. It still faces formidable obstacles in the Senate, including bitter opposition by GOP conservatives and attempts by some waverers in both parties to revise its key elements.


TK: Passing the important first test, the Senate gets a second shot at moving forward a comprehensive solution for immigration reform.

Sweet corn

Prices above are for yellow sweet corn. Georgia sweet corn growers are having a good year, with season to date shipments of 211 million pounds through June 23, up from 202.6 million pounds the same time a year ago. Peaking right now, Georgia sweet corn should begin to diminish after the July 4 holiday, one Bainbridge shipper told me. By mid-July, various Midwest and Eastern deals start to add to supply.

Getting their hopes up

Don't do it, Charlie Brown. You know the scene; Lucy is holding the football for Charlie Brown. Not this time, he thinks. Still, he can't resist. Charlie Brown runs full tilt and prepares to boot that ball and watch it soar. At the last minute, Lucy pull the ball away and Charlie Brown tumbles, end over end.

I thought of that visual when I read here that New Zealand is preparing to send a trial apple shipment to Japan. From the linked story:

Pipfruit industry chairman Ian Palmer says New Zealand has had the authority to export apples to Japan for some time, but has been prevented from doing so because of strict importing requirements.
He hopes apples can be exported to Japan on a commercial basis from next season, but says it is unlikely that volumes sent there will match those sent to other Asian countries.
Mr Palmer says the apples need to go through a rigorous treatment process which may affect the fruit quality, so that will need to be tested once the apples reach Japan.


TK: Having been on the trip to Japan with Washington apple industry leaders in early 1995 to see that market open with high expectations, I would caution that appearances can be deceiving. More than ten years later, Washington apple exporters don't ship to Japan, knocked out by unreasonable and over-costly phytosanitary restrictions. Lucy is ready to pull the ball away again, this time on New Zealand.

John Mackey blog

John Mackey, CEO of Whole Foods, has written a long blog post that Pamela Riemenschneider of The Packer keyed me to recently. It was a rare and candid commentary from a CEO; the follow on comments also were entertaining.


Here is Mackey's reason #2 for the acquisition of Wild Oats:

2. Elimination of a competitor — they compete with us for sites, customers and Team Members. Reason #2 seems to be one that particularly bothers the FTC—eliminating a competitor. I'm not sure why this is so troubling to the FTC because every merger between companies that compete with each other necessarily means eliminating a competitor. If eliminating a competitor is inherently "bad" or "wrong" then the FTC should probably never allow any mergers to ever occur, because most mergers necessarily mean the elimination of a competitor from the marketplace. Whole Foods has a 27 year long history of buying companies and eliminating them as competitors. Indeed, Whole Foods was created back in 1980 when two small competitive natural foods companies merged together-Safer Way Natural Foods and Clarksville Natural Grocery in Austin, Texas. Since then we have bought 18 different retail companies including such companies as Bread & Circus, Mrs. Gooch's, Fresh Fields, and Harry's Farmers Markets. In each case we eliminated a competitor, but we also greatly improved the stores that we acquired from these companies (the proof of this is the very significant increase of sales that occurred in virtually every store that we have ever acquired).

It is very important to understand that eliminating any one particular competitor such as Wild Oats doesn't mean eliminating all of our competitors—quite the contrary. Whole Foods has more competition today than we have ever had in our entire history! Numerous competitors to Whole Foods exist in every market we do business in, whether Wild Oats is in that market or not.
For the FTC to prove its case against this merger they would need to do at least two things:
A. Prove that quality or service would probably decrease at Whole Foods or Wild Oats as a result of this deal.
B. Prove that prices at Whole Foods or Wild Oats would increase as a result of this deal.
However, the FTC will never be able to prove either of these allegations because the exact opposite will happen (just as it has always happened before with all of our previous 18 retail acquisitions).


TK: I think Mackey is fighting an uphill battle here. Arguments like "We have a 27 year history of buying companies and eliminating them as competitors" may not score points at the FTC. By the way, Pamela is in mere days moving to Texas and leaving our office here in Lenexa. The good news is that Pamela will continue to be a part of The Packer team. Besides her irrepressible personality, we will miss her frequent contributions to the OBF (over by Fred) food shelf here at the home office. Pamela regularly brought jicama and other produce to share, not to mention that memorable day when she provided the ingredients for fluffer nutter sandwiches.

Touchback amendment next hurdle

Here is Washington Post coverage of the next phase to the immigration debate. Republican supporters of comprehensive immigration reform want to add a touchback provision for all the illegal aliens living in the U.S.
From the story:

Yesterday, the three senators added a provision that would force illegal immigrants to return to their home countries to apply for Z Visas, not just their green cards.

Last week, in the first-ever poll of illegal immigrants, 83 percent of the 1,600 undocumented Latinos surveyed told the polling firm Bendixen & Associates that they would pay the thousands of dollars in fines and fees, produce the work documents and submit to the background check needed for a Z Visa. But if they also had to return to their home countries, participation rates would drop to 63 percent, according to the poll commissioned by New America Media, a consortium of ethnic news media.

TK: Democrats say the immigration bill is tilting to the right, and that could capsize it. However, supporters of the bill are willing to push forward for passage and hope for a favorable conference with the legislation from the House.

A new slogan?

This story talks about the kickoff of a fruit and veggie promotion campaign in Hawaii, and it isn't "Fruits and Veggies - More Matters." Instead, for some unstated reason, the campaign is "Fruits and Veggies - Good Choice!"

From the story:

On Monday, Lt. Gov. James "Duke" Aiona Jr. and the Department of Health kicked off its "Fruits and Veggies - Good Choice!" campaign. Television ads and posters will remind island residents to eat one more serving of each every day.


TK: Why is Hawaii straying from the Produce for Better Health message? It could be the concern about obesity in the state. A recent report from Trust for America's Health noted that Hawaii has the highest level of adult obesity in the nation at 16.4 percent, and the 34th highest overweight levels of low-income children ages 2-5 at 10.3 percent. The state spent an estimated $231 per person in 2003 on medical-costs related to obesity, which was the 38th highest amount in the nation, the group said.