Fresh Produce Discussion Blog

Created by The Packer's National Editor Tom Karst

Monday, June 30, 2008

Progress Report: Import safety

Progress report implies FDA will be giving itself a grade.. not likely. There will be a press event tomorrow, however:


Import Working Group to Release Progress Summary on Product Safety Efforts

Members of the interagency Working Group on Import Safety will release a new paper Tuesday that chronicles a wide variety of initiatives underway to enhance the safety of imported goods.

HHS Secretary Mike Leavitt, EPA Administrator Stephen Johnson and Consumer Product Safety Commission Acting Chairman Nancy Nord will conduct a media briefing to discuss the report on Tuesday, July 1, at 12 p.m. EDT at the Department of Health and Human Services

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Glass half empty

There is good news and bad news in the NRA Restaurant Performance Index, but pessimism persists. From the National Restaurant Association:


Restaurant Performance Index Advanced in May as Industry Same-Store Sales Turned Positive Restaurant operators reported positive sales in May; Expectations Index fell to record low
(Washington, D.C.) Restaurant industry performance improved in May, as the National Restaurant Association's comprehensive index of restaurant activity rose for the second consecutive month. The Association's Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 98.6 in May, up 0.2 percent from April's level.
"The May increase in the Restaurant Performance Index was driven by a solid gain in the current situation component," said Hudson Riehle, senior vice president of Research and Information Services for the Association. "Each of the four current situation indicators posted improvements in May, led by the first positive same-store sales performance in three months."
"Although restaurant operators reported an improvement in their current performance, their outlook for sales and the economy in the months ahead grew more pessimistic," Riehle added. "Only 12 percent of restaurant operators expect economic conditions to improve in six months, the lowest level in the 6-year history of the Restaurant Performance Index."
The RPI is based on the responses to the National Restaurant Association's Restaurant Industry Tracking Survey, which is fielded monthly among restaurant operators nationwide on a variety of indicators including sales, traffic, labor and capital expenditures. The RPI consists of two components – the Current Situation Index and the Expectations Index. (Follow this link to view this month's report:
www.restaurant.org/pdfs/research/index/200805.pdf).
The Restaurant Performance Index is constructed so that the health of the restaurant industry is measured in relation to a steady-state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, while index values under 100 represent a period of contraction for key industry indicators. The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 98.9 in May – up 1.0 percent from April and its second consecutive strong monthly gain. However, May represented the ninth consecutive month below 100, which signifies contraction in the current situation component.
Restaurant operators reported positive same-store sales in May for the first time in three months. Forty-three percent of restaurant operators reported a same-store sales gain between May 2007 and May 2008, up from 35 percent who reported a sales gain in April. Forty-two percent of operators reported a same-store sales decline in May, down from 50 percent who reported similarly in April.
Despite the positive sales results, restaurant operators continued to report negative customer traffic levels in May. Thirty-three percent of restaurant operators reported an increase in customer traffic between May 2007 and May 2008, up from 24 percent who reported similarly in April. Forty-five percent of operators reported a traffic decline in May, down from 55 percent who reported negative traffic in April.
Capital spending activity held relatively steady in recent months. Forty-four percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, up slightly from 43 percent who reported similarly last month.
The Expectations Index, which measures restaurant operators' six-month outlook for four industry indicators (same-store sales, employees, capital expenditures and business conditions), stood at 98.3 in May – down 0.6 percent from April and its lowest level on record. In addition, May represented the seventh consecutive month in which the Expectations Index stood below 100.
Restaurant operators remain pessimistic about sales growth in coming months. Twenty-nine percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), matching the proportion who reported similarly last month. Thirty-seven percent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, up from 34 percent who reported similarly last month.
Restaurant operators also grew more pessimistic about the direction of the economy. Just 12 percent of operators expect economic conditions to improve in six months, down from 14 percent who reported similarly last month and the lowest level on record. Forty-five percent of operators said they expect economic conditions to worsen in six months, up from 42 percent who reported similarly last month.
Restaurant operators continue to pull back on plans for future capital spending. Forty-three percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, down from 47 percent who reported similarly last month and the lowest level on record

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Last call: applications to serve on Standards Committee that will finalize a national standard for sustainable agriculture

This process of creating a "sustainability standard" has fought controversy from its inception, but this "last call" seems to reach out to dissenters who would like to provide input and balance to a sustainable standard that some fear will be too heavily skewed toward organic agricultural practices. Another question: will this standard "stick" once in place? Or will there be another?



Madison, Wisconsin July 1, 2008 -- This week marks the final opportunity to submit applications to serve on the Standards Committee that will finalize a national standard for sustainable agriculture under the auspices of the American National Standards Institute (ANSI). Applications are due on Monday, July 7th, following an unprecedented 15-month public outreach period to inform stakeholders of the opportunity to participate in the development process of this landmark standard.
The goals of establishing a national standard for sustainable agriculture practice include: 1) defining sustainability practices and indicators throughout the agricultural supply chain on a life-cycle basis, 2) distinguishing best practices in crop production and handling, 3) guiding producers and handlers through stages of incremental improvement, 4) providing a common set of metrics to gauge sustainability progress and 5) setting a reference benchmark for private sustainability efforts. Working within ANSI's open consensus process, this national standardization initiative will provide a forum for discussing and vetting differences over what sustainability means within the agricultural sector.
Role of the Standards CommitteeAlthough there are a limited number of seats available on the Standards Committee--the voting body for the standard--all applicants will be able to participate on subcommittees addressing the key issues outlined in the current draft, as well as other issues identified by stakeholders. The final draft standard will be subject to public review and comment prior to submission to ANSI. Ultimately, the Standards Committee will decide what is in the final standard that will be submitted for approval as an American National Standard. For this reason, all interested parties and stakeholders-such as growers, processors, food service organizations, retailers, government representatives, consumer groups, NGOs, labor groups and representatives, and other interested parties-are encouraged to apply. Stakeholders interested in working on specific advisory subcommittees are also encouraged to submit applications.
How to ApplyApplications for participation should be submitted to the Leonardo Academy-a neutral third-party ANSI-accredited organization dedicated to advancing sustainability through the competitive market-no later than 5 pm on Monday, July 7th. Applications will be reviewed in full in order to achieve a balance dispersion of qualifications and expertise on the Standards Committee. Committee members will be announced on Monday, July 28th, and the first Standards Committee meeting will be held on September 10th (time and location to be announced). Applications and background information regarding the draft standard are available at:
http://www.leonardoacademy.org/Projects/Su stainAgStdDevelopment.htm.
For more information, contact:
Leonardo Academy
Amanda Raster
Project Manager
development-scs-1@leonardoacademy.org
608-280-0255

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June 30 CDC: 851, 36 states and DC; April 10 to June 20 onset

CDC: "clusters have led us to broaden the investigation." From the CDC Web page:

CDC is collaborating with public health officials in many states, the Indian Health Service, and the U.S. Food and Drug Administration (FDA) to investigate an ongoing multi-state outbreak of human Salmonella serotype Saintpaul infections. An initial epidemiologic investigation comparing foods eaten by ill and well persons identified consumption of raw tomatoes as strongly linked to illness. Recently, many clusters of illnesses have been identified in Texas and other states among persons who ate at restaurants. These clusters have led us to broaden the investigation to be sure that it encompasses food items that are commonly consumed with tomatoes.
Since April, 851 persons infected with Salmonella Saintpaul with the same genetic fingerprint have been identified in 36 states and the District of Columbia. These were identified because clinical laboratories in all states send Salmonella strains from ill persons to their State public health laboratory for characterization. The number of ill persons identified in each state is as follows: Arkansas (10 persons), Arizona (39), California (10), Colorado (11), Connecticut (4), Florida (1), Georgia (18), Idaho (3), Illinois (91), Indiana (11), Kansas (14), Kentucky (1), Maine (1), Maryland (29), Massachusetts (21), Michigan (6), Minnesota (2), Missouri (12), New Hampshire (3), Nevada (4), New Jersey (4), New Mexico (90), New York (26), North Carolina (5), Ohio (6), Oklahoma (19), Oregon (10), Pennsylvania (8), Rhode Island (3), Tennessee (6), Texas (346), Utah (2), Virginia (22), Vermont (2), Washington (4), Wisconsin (6), and the District of Columbia (1).
Among the 581 persons with information available, illnesses began between April 10 and June 20, 2008, including 173 who became ill on June 1 or later. Many steps must occur between a person becoming ill and the determination that the illness was caused by the outbreak strain of Salmonella; these steps take an average of 2-3 weeks. Therefore, an illness reported today may have begun 2-3 weeks ago. Patients range in age from <1>



From the FDA's Web site, succinct one page summary:



Identifying the Salmonellosis outbreak
Person eats contaminated food, becomes ill, seeks medical care, testing occurs. Illness is reported to local health department.
State labs and PulseNet detect pathogen and link common "fingerprints."
Data show increased illness rates, multiple cases identified. On May 22nd, CDC and states identify outbreak in NM and TX. Suspect association with southwestern style food.
Local/state/CDC interview individuals to obtain detailed food histories of food consumption.
May 31, FDA begins investigation …
Raw red Roma, plum, and round tomatoes identified. CDC notifies FDA.
FDA investigation includes working with industry, local and state partners, federal partners, and foreign governments to identify the source of the contamination.
FDA issues consumer warnings about raw red Roma, plum, and round tomatoes, and increases sampling and lab analysis of these tomatoes.
FDA inspects and investigates farms and other critical points on the supply chain where the tomatoes may have become contaminated.
Future ...
FDA works with industry, states, foreign governments, and academia to prevent future outbreaks.

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Green Acres Is The Place For Me

A suburban myth? Record numbers? Idiocy, I tell you. But I must admit, that I be one of those idiots. 6 tomato plants, consisting of the three of the Burpee Big Boy Better Beefstake Hybrids, one Sweet Million cherry tomato, and two Mr. Stripey heirlooms, only 'cause I like the name. Interspersed are my herbs of choice---cilantro, dill, bouquet dill, thyme, Italian parsley, and basil. And organically, I planted onion sets on the rectangular perimeter to ward off critters of all kinds, as I have decided that I am at one with the environment, or at least I thought I was once in college in 1977. My brother uses a fence, the fool.

You can never tell about basil, of course. Nice plant, good leaves when bought at the nursery, then it craps out on you. Mine looks like a gnome right now. Last year it was on steroids--the dried leaves are still hanging upside-down in the garage. One of the cilantro plants has gone to seed, known as coriander, also known as un-usable. Doing OK with the dill, and lately I've been making smashing salads with extra virgin olive oil, balsamic vinegar, dill & cilantro as the garnish. I feel vigorous, almost ready to take on the FDA.

And although Bankrate.com is known far & wide as the ultimate authority on gardening, I do question the validity of growing crops such as mushrooms, cherries or blackberries in a backyard garden. It might take something a little bit more complicated like...planting a tree? Now you've got an investment incurred, which might cut into the aforementioned 'gardening profit matrix'. But given my black mood lately, I might get excited about a compost bed in my basement for the mushrooms, or at least some toadstools.

Later,

Jay

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More backyard garden myths

Another report about the benefits of planting a vegetable garden, from KSBW TV.


Though the task may seem daunting, tending a small garden in your backyard will generally pay for itself with the first harvest. Americans are planting fruits and vegetables at home in record numbers. One tomato plant, according to Bankrate.com, can save you $60 on your bill if you harvest 30 pounds of product over time. The cost of the plant, fertilizer and water to care for it might total around $3.05. Other expensive fruits and vegetables that will save the average consumer plenty of money if grown at home include mushrooms, green peas, asparagus, blackberries, cherries and strawberries. Choosing those plants that you enjoy most and those that are easiest to care for will ultimately save you hundreds. Just make sure you get the garden guru next door to show you the ropes of planting before you throw those seeds in the ground.

TK: Where is the proof that "Americans are planting fruits and vegetables at home in record numbers"? This is suburban myth if I ever heard one. Proof please...


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Goodlatte: reduce ethanol mandate

The chinks in the ethanol armor are increasingly evident. From the office of Rep. Bob Goodlatte:


Ranking Member Bob Goodlatte and 50 of his Republican colleagues sent a letter to the Administrator of the Environmental Protection Agency (EPA) asking the Agency to reduce the amount of ethanol mandated by the 2009 Renewable Fuel Standard (RFS) to help alleviate the pressure on rising corn prices. Corn prices have increased significantly over the last few years and coupled with increased energy prices, livestock producers throughout the country are struggling under the weight of increased input costs. As a result of the record corn prices, wheat, soybeans, rice, and other food commodities have also seen a dramatic price increase and continue to drive up food costs for American consumers.
There are a variety of factors contributing to high commodity prices including export restrictions, energy prices, and global demand. Recently, adverse weather conditions in the U.S. have further exacerbated shortages in and increased prices on the commodity market. Nearly one-third of the U.S. corn crop is projected to be used to meet the increased RFS of 9 billion gallons of ethanol in 2008.
Currently, the EPA is reviewing the waiver request sent by Governor Rick Perry of Texas seeking a 50% reduction in the RFS. States can request waivers for up to one year and may ask for the waiver to be renewed at the discretion of the Administrator.
“The recent flooding in the Midwest has created devastating crop losses and these record corn prices will continue to climb. There are many factors that have increased the price of corn, but the only factor that we can immediately control is the amount of the corn supply that must be dedicated to meet the RFS. Our livestock producers and the American consumer have been hit hard in the pocket books. I urge the Administration to reduce the government mandated RFS so we can lessen the economic harm facing millions of Americans,” said Ranking Member Goodlatte. “I support the development and use of alternative fuels; however, we cannot allow government mandates to pick winners and losers. A temporary waiver will offer immediate relief to those affected by the current shortage of the corn supply.”

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Nashville and more tomato headlines

I'm writing this from Nashville, being here with my son to help him scout out an apartment for this fall when he will attend university here. The family we are staying with is a subscriber to a community supported agriculture program, and receives a carton of locally grown produce each week. This week's fare included blackberries, lemon cucumbers, a type of plum-like fruit, beans, potatoes, beets and more. More on that later....

I will be able to update Fresh Talk a few times this week, but mostly I will be out of pocket. I look forward to the contributions of guest bloggers this week.

Still can't believe the FDA/CDC seems to be backpedaling on the cause of the salmonella outbreak....


Some headliness..

Tainted Tomatoes Still Out There, Salmonella Risk Remains High

FDA Uncertain Salmonella Linked Directly to Tomatoes

Bad tomatoes may still be on the shelves

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Saturday, June 28, 2008

Agricultural Prices - Way up

From the National Agricultural Statistics Service:

June Farm Prices Received Index Jumped 11 Points From Last Month

The preliminary All Farm Products Index of Prices Received by Farmers in June, at 162 percent, based on 1990-92=100, increased 11 points (7.3 percent) from May. The Crop Index is up 19 points (11 percent) and the Livestock Index increased 3 points (2.2 percent). Producers received higher prices for corn, soybeans, milk, and lettuce and lower prices for strawberries, cantaloups, and wheat. In addition to prices, the overall index is also affected by the seasonal change based on a 3-year average mix of commodities producers sell. Increased monthly marketings of wheat, hay, grapes, and cantaloups offset decreased marketings of tomatoes, oranges, strawberries, and sweet corn.

The preliminary All Farm Products Index is up 25 points (18 percent) from June 2007. The Food Commodities Index, at 157, increased 10 points (6.8 percent) from last month and increased 19 points (14 percent) from June 2007.


Prices Paid Index Up 3 Points

The June Index of Prices Paid for Commodities and Services, Interest, Taxes, and Farm Wage Rates (PPITW) is 189 percent of the 1990-92 average. The index is up 3 points (1.6 percent) from May and 28 points (17 percent) above June 2007. Higher prices in June for feed grains, diesel fuel, feed concentrates, and mixed fertilizers offset lower prices for hay & forages and
feeder pigs.


Fruits & Nuts: The June index, at 152, is down 1.3 percent from May but 0.7 percent higher than a year ago. A price decrease for strawberries more than offset price increases for apples and lemons.

Commercial Vegetables: The June index, at 152, is up 4.1 percent from last month and 14 percent above June 2007. Price increases during June for lettuce, tomatoes, cucumbers, and cauliflower more than offset price declines for cantaloups, sweet corn, onions, and carrots.

Potatoes & Dry Beans: The June index, at 181, is up 12 percent from last month and 37 percent above June 2007. The all potato price, at $10.37 per cwt, is up $1.21 from May and up $2.62 from last June. The all dry bean price, at $38.60 per cwt, is up $2.90 from the previous month and $14.20 above June 2007.

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Friday, June 27, 2008

FDA teleconference - June 27 - It is tomatoes, isn't it?

TK: Here is the link to the discussion group page with a link to today's FDA teleconference audio file.

A couple of notes from the press conference:
* over 800 victims
* Acheson continues to lower expectations FDA will find "smoking gun"
* Distribution chain also being investigated
* FDA has tested 1,700 samples from Fla. and Mexico so far and found no evidence of salmonella
* fairly extensive discussion of repacking role in fresh tomato industry
* CDC keeping an "open mind" about possible cause of outlook - reporters pressed CDC on this point, and CDC says there is a "strong correlation" with tomatoes. One reporter asked CDC if their concern was increasing that tomatoes were not the commodity as the outbreak continues- CDC said they are concerned they don't have evidence to confirm or refute their theory. CDC refused to list commodities 2, 3 and 4 that might be other suspects....
* "It isn't over yet."
* Acheson on repacking: "We have to examine the whole traceability system as to how to build a system so when we do have a problem we can figure out where it came from." No opinion offered by Acheson on whether legislation is needed or not.


TK: The CDC/FDA desperately needs a "smoking gun" on tomatoes as the source of this outbreak. It doesn't have one yet.

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National Retail Report - June 27

Fruits rule food page ads for the July 4 holiday, reports the USDA's National Retail Report for June 27 shows.

Fruits Dominate Ads as Retailers Begin July 4th Sales
Nearly all retailers continued to advertise with summer-time themes and some began advertising this week for the July 4th holiday. Meats for the grill (especially ground beef, chicken, and pork) and fruits (especially berries and stone fruits) commanded much of the front page ad space. Many retailers also took the opportunity during this last week in June to
promote Dairy Month. Fruits dominated the produce ads this week with an increase of 14% over the previous week and accounted for nearly 61% of the total. Overall fresh produce ad activity continued to increase this week with a 4% gain despite a 8% decline in vegetable ad activity. The top 5 items were all fruits and included: peaches, nectarines, grapes, cantaloupes, and strawberries. These 5 items actually made up 53% of all regularly report fruit ads and nearly one-third of the total ads. In addition to the regularly reported items, berries (blackberries, blueberries in pint containers, and raspberries) reported in the seasonal category of this report were also featured quite heavily in both price and “buy-one-get-one-free” ads.


Fruits as Percentage of Total Fruit Ads June 27, 2008
Peaches 13%
Oranges, navel 0%
Pears, bartlett 0%
Nectarines 11%
Mangoes 7%
Grapes, green/red 11%
Grapefruit, red 0%
Limes 2%
Honeydew 1%
Cherries 3%
Cantaloupe 9%
Strawberries 9%
Organic Strawberries, 2%
Watermelon, mini 1%
Watermelon, seedless 8%
Apples, red delicious 1%
Avocadoes, hass 7%
Bananas, organic 0%
Blueberries, 4.4oz 0%
Bananas 0%
Lemons 1%
Pineapple 4%
Plums 9%


Vegetables as Percentage of Total Vegetable Ads - June 27, 2008
Broccoli, organic 1%
Broccoli 3%
Beans, round green 4%
Tomatoes on the vine 9%
Tomatoes 2%
Cabbage 2%
Carrots, baby organic 3%
Carrots, baby 5%
Asparagus 1%
Tomatoes, grape organic 1%
Tomatoes, grape 4%
Celery 0%
Corn 13%
Cucumbers 6%
Lettuce, iceberg 4%
Lettuce, romaine 4%
Mushrooms, white 6%
Onions, yellow 1%
Sweet Potatoes 1%
Squash, zucchini 6%
Potatoes, russet 1%
Peppers, bell red 5%
Peppers, bell green 6%
Onions, sweet 12%

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Curb Your Enthusiasm? Nonsense!

You know, I think Karst purposely puts these incendiary missives up here to get my goat & make me blog. But that's just business as usual at Paranoid Rage-a-Holics Anonymous...

RE: the Oil Speculator Curbing, I think I'm a fairly savvy investor (just not this last quarter, thankyouverymuch) and in the past I've tried to relate buying stocks or trading options to what we go through daily as produce folks, where we buy & sell with the added wrinkle of time element added. And I've come to this conclusion, for oil as well as tomatoes: the market is the market is the market, and it cannot be controlled. A 402-19 vote to curb speculation? Overwhelming! Me, I'm with the nineteen that saw the 402 for the grandstanders that they are.

You have your supply. You have your demand. And then...you have your psychology-sentiment-fervor-lack of restraint, whatever the heck you want to call it. Certainly, it feeds on itself. Three or four Novembers ago, the California green tomato deal ended abruptly with early rains, the Palmetto/Ruskin (FL) deal wasn't ready, the backyards had the 'blight' (my Iowa mother-in-law thinks every non-perfect tomato in her garden has 'the blight'), and consequently the market shot up to nearly $40.00 FOB.

And we fed into it. Alan Greenspan, the best in the history of Fed chairmen in my opinion, would no doubt have called it 'unbridled enthusiasm'. We knew beyond doubt that supply was coming. But we still bought when we could & made a long profit as the invoice amounts were growing exponentially.

Then, like a switch, demand stopped. Five bucks a pound for a tomato will do that every time. And like a house of cards, it was implosion time. The market was in the teens within a matter of days, and the street guys were dancing to that old accounting tune, FIFO, first-in-first-out, or more accurately, first-loss-best-loss.

The point of all this, from that trying time that put more than a few grey hairs on this head, is that we couldn't control it. No one can. Sure, factor in some greed in these instances, but smart people know about the day of reckoning that is the flipside. And the oil speculators know full well that buying this high, feeding into the frenzy, has the inherent risk of being caught, leaving them to scramble when the music stops and they've run of chairs.

Have a quiet weekend.

Later,

Jay

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Another FDA briefing

I'll call in to report any developments, but it doesn't appear to be a breakthrough news event this afternoon....



WHAT:
A media availability with experts from the U.S. Food and Drug Administration and the Centers for Disease Control and Prevention to answer questions about the ongoing investigation of the salmonella outbreak among certain types of tomatoes.


WHO:
--David Acheson, M.D., associate commissioner for foods, FDA
--Melinda Plaisier, associate commissioner, Office of International Programs, FDA
--Faye Feldstein, acting director, Office of Food Defense, Communication and
Emergency Response, Center for Food Safety and Applied Nutrition, FDA
--Steve Solomon, deputy director, Office of Regional Operations, FDA
--Patricia Griffin, M.D., chief, Enteric Diseases Epidemiology Branch, CDC


WHEN:
Friday, June 27, 2008, 3 p.m. EDT




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House to CTFC: Stop excessive oil speculation

Oil prices aren't going down, despite the fact that some economists say that supply and conditions don't warrant $130/barrel pricing. The House Agriculture Committee issued this press release yesterday about a new bill designed to curb "excessive speculation" in the energy futures market. From the House Agriculture Committee:


Today, the House of Representatives passed a bill requiring the Commodity Futures Trading Commission (CFTC) to utilize all its authority, including emergency powers, to take steps to curb excessive speculation in the energy futures markets. H.R. 6377, the Energy Markets Emergency Act passed the House overwhelmingly by a bipartisan vote of 402-19. "A growing number of people believe a flood of speculative money into energy futures is driving the record prices in crude oil," said House Agriculture Committee Chairman Collin C. Peterson of Minnesota during floor debate on the bill. "CFTC must take immediate steps to ensure that index and hedge fund money is not the cause for price manipulation and should take any necessary action to curb excessive speculation in the markets. These steps will help restore consumer confidence and reassure the American taxpayer that the futures markets are unctioning properly."

H.R. 6377 directs CFTC to use all its authority, including its emergency powers, immediately to curb the role of excessive speculation in the energy and swaps futures markets and take other corrective actions as necessary to eliminate any market disturbance that prevents energy arkets from accurately reflecting the forces of supply and demand.

CFTC is the chief regulator of futures and option markets in the United States. It was created as an independent agency in 1974 with the mandate to enforce and administer the Commodity Exchange Act, to ensure market integrity, to protect market users from fraud and abusive trading practices, and to prevent and prosecute manipulation of the price of any commodity in interstate commerce.

Congressional oversight of CFTC is under the jurisdiction of the House Agriculture Committee, chaired by Congressman Peterson. The Farm Bill, enacted into law earlier this month over the President's veto, reauthorizes CFTC through 2013.

In July, the House Agriculture Committee will examine legislative proposals that would affect CFTC's authority over energy futures and swaps markets. Several bills affecting regulation of the energy futures and swaps markets have been introduced and referred to the Committee in the 110th Congress.

"The Committee will thoroughly and carefully examine legislative proposals that would affect regulation of these markets," Peterson said. "Our review will be comprehensive and public so that we may work toward a consensus, bipartisan bill that will strengthen CFTC's ability to identify fraud and manipulation in the markets."

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FDA bonus money draws ire

The FDA should be reminded it can't "bonus" its way to an effective food safety system, and Rep. Rosa DeLauro is the one to do it. This just slid across the inbox:


Congresswoman Rosa L. DeLauro (CT-3) issued the following statement regarding the Food and Drug Administration awarding employees more than $35 million in incentive pay for fiscal year 2007, a 29% jump from the previous year. Among the agency's highest-paid officials, 17 made more than $200,000 in 2007, or more than a member of Congress or the U.S. attorney general, according to FDA documents. The figures also show that 28 top FDA officials together received more than $1 million in retention and merit cash bonuses, an average of $35,714. Over the past several years, consumers have been assaulted with numerous unsafe foods and drugs, so it is extremely disappointing that the FDA would expend such a significant amount of limited resources toward bonuses for upper-level managers. “It would be entirely appropriate if these funds instead were allocated toward retaining key scientists and career employees who make up the backbone of the agency. Providing bonuses to top-level political managers who contribute to the low morale and negative culture at the agency is unconscionable.”

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Vegetable and Melon Outlook - Rapid input price increases sqeeze farmers

The June 26 USDA ERS Vegetables and Melons Outlook report is available here. Gary Lucier and Rachael Dettman authored the report and headlined the summary with the discussion of fast-rising input prices:

Vegetable and melon net returns are being eroded by rapidly escalating input prices, particularly for fuel and fertilizer. Based on an index calculated by ERS using items pertinent to vegetable production, average input prices paid by vegetable and melon growers increased 7 percent in 2006, 8 percent in 2007, and are currently running 14 percent above a year earlier so far in 2008. At the same time, average prices received by commercial vegetable growers have not kept pace and are currently running below a year earlier.


More highlights from the report:


Tablestock Russet potatoes shipped from Idaho increased 70 percent to $14.63 per 50 pound carton. Multiple factors may explain increased tablestock prices including quality concerns in the 2007 storage crop, decreased spring acreage, delayed development in summer and fall crops, and increased export volume.
Sweet potato
production has risen an average rate of 5 percent annually since 1998, due
to improving demand for fresh and processed sweet potatoes. Demand will likely remain strong well into next year due in part to the increased popularity of sweet potato fries, which can now be found on restaurant menus across the nation.

More highlights..or lowlights.....


Fresh vegetables: During the first 5 months of 2008, fresh-market vegetable prices at the point of first sale (e.g., grower or shipping point) averaged 16 percent below a year earlier. Lower average prices were received for vegetable crops such as celery, cucumbers, lettuce, snap beans, and carrots, easily outweighing higher average prices for tomatoes and cauliflower. With a large storage crop last fall, fresh drybulb onion prices were a fraction of the highs of a year earlier through April. Fresh vegetable shipping-point prices will likely be under upward pressure this summer as growers battle higher production costs and water-related issues.
Melons: Similar to the situation a year ago, spring supplies have begun to improve after a late start caused by a combination of cool, wet weather. April-May producer prices for melon crops averaged 17 percent above a year ago. However, although May shipments of watermelon, cantaloup, and honeydew increased seasonally, only watermelon volume managed to exceed year-earlier levels. As a result, average melon prices during May remained near the highs of a year ago.
Mushrooms: During the initial 5 months of 2007, the average import value for fresh agaricus mushrooms declined 9 percent from a year earlier to $1.24/pound. During the same time, the average import value for non-agaricus specialty mushrooms increased 15 percent to $0.84/pound.

More on input prices...

Input prices play a major role in farm production expenses and farm profitability. Over the past decade, prices paid (unadjusted for inflation) by vegetable and melon growers for production inputs have moved steadily higher. An index calculated by ERS using items pertinent to vegetable production (leaves out farm-origin inputs like feed and livestock) indicates that average input prices increased 7 percent in 2006, 8 percent in 2007, and is currently running 14 percent above a year earlier in 2008. This easily exceeds price changes in the general economy over the past few years. At the same time, average prices received by commercial vegetable growers have not kept pace and are currently running below a year earlier. Price changes are not the only factors determining net farm revenue. Over the long run, rising yields can help spread escalating costs over more units, keeping the farm cost per pound of vegetables down. However, when input prices rise sharply over a short period of
time as they have since 2007 (fig. 10), increases in per-acre yields can not overcome these rapid cost increases, pulling net revenue down.

TK: The 41-page USDA report includes a table show second quarter 2008 input costs rising, compared with the second quarter a year ago, by 30% for seed, 64% for fertilizer and 46% for fuels.












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Thursday, June 26, 2008

Your carbon footprint

A presentation by Paul Hepperla, director of Supply Side Energy, Verisae, Inc., presented this powerpoint on June 17 at the FMI Sustainability Summit.


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The Blame Game

As an addendum to Tom Karst's remarks...

...at this point I don't particularly care what agency was incompetent when, who caused this whole fiasco and where we go from here. You know that the politicians, the lobbyists and the Federales would rather drink battery acid then point a finger at a fellow government agency, for fear that somewhere down the line, they might be in the crosshairs.

Here's the deal. We bought & sold multiple loads of tomatoes under an implied 'warranty of merchantability'. Then, after arrival at destination, an agency representing the health of the United States of America comes out and states that said product is 'unfit for human consumption'. Sure, the government could argue the difference between an advisory and a recall. Semantics, I say, and frankly the chances of a dumbed-down American public picking up on that is nil. Heck, last Thursday, Chicago news media began trumpeting on the morning shows that the FDA had pinpointed a 'cluster of illnesses' that came from a popular North Side restaurant. Wanna know what the public heard? That cluster tomatoes are bad now!

That, my friends, is what we're dealing with now.

But I digress. The Florida mature green tomato market was $16.00 FOB on 5x6lgr tomatoes when the you-know-what hit the fan. I assume that most growers are & will be sympathetic to every link in the chain here when putting all this behind us. But sadly, a couple of the shippers are posturing as to holding the distributors' and repackers' financial feet to the fire when settling up on perishable product that lain stagnant for over a week, getting redder & decaying. Not our problem, they say. You bought 'em, you had 'em in your house.

Kinda wish they'd concentrate their energies on getting product moving again via promotion rather than inevitably doing the opposite.

Later,

Jay

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Bees and colony collapse

There was a hearing today by the House Agriculture Committee, hort subcommittee on "pollinator health and colony collapse disorder." See the opening statements from the hearing.

Here is an excerpt from the written testimony of Steve Godlin, S.P. Godlin Apiaries, Visalia, Calif.

Currently there are 660,000 acres (of almonds) producing and would be more if not for the water crisis in our state. This eequires about 1,300,000 hives of bees to pollinate them. The number of managed hives in California has dropped to around 400,000 hives despite beekeepers’ efforts to meet growers’ demands. Bees are now being shipped into California from everywhere in the U.S.; even Australia is trying to get in the game. Now I have to go to national bee conventions and defend my state as beekeepers from New York or Montana disparage us and call us a gutter for bees. We have created the biggest experiment ever performed on the honey bee. Take bees from all over the continent and stick them in the valley to mingle and forage together with mites and diseases and apparently a list of viruses as long as your arm and see what happens. Or maybe this isn’t what is wrong -- haven’t we been hearing that bees around the world are having a problem? And beekeepers here in the U. S., who do not ship bees to California are losing hives as well.

We began to notice these losses in recent years. We have had rough years from time to time with higher than usual losses, and in history there have been a few epidemics in the bee world. But nothing has been on the levels we are facing now. This is why there has been all this attention on us. People now realize that the $15 billion dollars worth of food that requires pollination to exist is a lot of pretty delicious stuff. We appreciate this attention and have been encouraged by the legislations actions. At home, the Bee Lab at U.C. Davis is up and running again thanks to generous contributions by beekeepers, almond growers, and companies like Haagen Daz Ice Cream who donated $250,000 to honey bee research and is running a priceless “save the bee” ad campaign. Researchers across the country have been collaborating on projects in an attempt to find answers. Beekeepers themselves have put aside their differences and are working with the scientific and governmental communities as well as each other on an unprecedented level. I know the fact that our two national organizations had a shared conference this year speaks volumes to the importance of this issue. I am here today to ask that you would vote to continue helping to fund honey bee research. There are some very important projects just getting up and started, and we really haven’t time to waste, or money. We need results. We need a united effort by all and shared knowledge from a variety of fields.

I hope we are getting there; the middle of July is looming and I am more than a little worried. We are providing our bees all the supplemental nutrition and fresh queens we can. We are treating for nosema ceranae aggressively and hope for a better fall than this last one.

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Odds and ends

I'm looking forward to the guest blogging contributions of Russian produce consultant Ksenia Evdokimova and several members of United's Leadership Class, all of whom I have recently extended invitations to. Not to mention our new star Jay Martini and recent staff contributor Fred Wilkinson.....

I talked to Jane Proctor of CPMA and the Produce Traceability Initiative today - she said the time line for industry adoption of case-level traceability systems has not yet been released for public consumption by the group but it was extensively discussed and tentatively established at the June 12 meeting of the task force.

The Fresh Produce Industry Discussion Group continues to add members, and I've also moved the archive files of Fresh Talk chats, Tk headlines, and Fresh Talk poll results to the group's pages. Here is the link to join the group, if interested.

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Tomatoes and salmonella: avoiding ambiguity

I talked to a distributor of Mexican tomatoes in Nogales today who said they were now selling about 60% of their production from Sonora at depressed prices, leaving 40% behind in Mexico.

No word yet about the FDA investigative team in Mexican, other than the fact they are apparently traveling with their Mexican counterparts and super secretive about where they are going and what they are looking for.

The distributor's biggest concern is that the FDA will come up with an ambiguous result, with no certainty of where the contamination occurred and what caused it. He also chafed at the idea that the FDA's David Acheson is using the occasion to ask for more authority for the agency. "We have all been 100% cooperative."

Meanwhile, the FDA said they may have another conference call this afternoon. A little illumination, gentlemen?

At this point, can we call the FDA's management of the salmonella investigation incompetent, as some have said? Certainly, the FDA's advice to consumers has been confusing. Many loads of good tomatoes have been thrown away. Yet the contention by some critics that the outbreak is over doesn't seem to be supported by facts. The CDC today pushed the number of victims of salmonella saintpaul higher again, to 707.

I think the industry should tread lightly in respect to damning the agency's efforts. I don't think you will hear PMA or United describing the FDA investigation with the term "incompetence."
Frankly, I would be shocked if they ever did. Until I hear United's David Gombas and PMA's Bob Whitaker call the FDA incompetent, I tend to discount any such talk by anyone else.

Don't forget that one of the big hurdles the agency faced in their traceback investigation was the apparent absence of an effective industry traceability/record keeping system for fresh tomatoes.

The most unsatisfying result for the FDA's traceback investigation would be ambiguity. If that is the result of these weeks of travail, perhaps "incompetence" may not be too strong a characterization.

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Sad nanner


I've heard it said that emotionally, people are like bananas -- they bruise on the inside.


I always thought that was a sappy (though true) sentiment.


Nevertheless, this banana could use a hug.


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Wednesday, June 25, 2008

Leaving Kansas City and other Wal-Mart news

Wal-Mart is pulling its managers' meeting out of Kansas City in favor of Orlando. The next thing you know, KC will lose its NBA franchise...Oh yeah, we don't have an NBA (or NHL) franchise. Another indignity to bear.


Wal-Mart moves meeting from KC to Orlando


Wal-Mart to offer more South Carolina produce

After being overhyped, RFID starts to deliver (WSJ preview)

Why Wal-Mart may be good for small business


August hearing set for former Wal-Mart executive


Halffords poaches Wal-Mart man
David Wild, who had been charged with seeing off Tesco as head of Wal-Mart’s new format team in northern California, is quitting the retailer to take the top job at Halfords. A former Tesco executive, he will take up the post at the car maintenance and bicycles chain in early August.


Wal-Mart sourcing produce from local farmers (Arkansas)
Wal-Mart is working with farmers to incorporate more local sourcing into its produce assortment, Jack Sinclair, executive vice president for grocery merchandise, said Thursday.
Sinclair pointed to a selection of Healthy Harvest Blueberries sourced from Interstate Express Logistics, a Fayetteville-based company, during a media tour of Wal-Mart's Pleasant Grove store in Rogers.
"Local sourcing will be a new focus for us," Sinclair said.

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CDC June 24 update - 652, 34 states, DC; April 10 to June 13 onset


The CDC update can be found here. From the CDC:

Since April, 652 persons infected with Salmonella Saintpaul with the same genetic fingerprint have been identified in 34 states and the District of Columbia. These were identified because clinical laboratories in all states send Salmonella strains from ill persons to their State public health laboratory for characterization. The increase in reported ill persons since the last update is not thought to be due to a large number of new infections. The number of reported ill persons increased mainly because some states improved surveillance for Salmonella in response to this outbreak and because laboratory identification of many previously submitted strains was completed. In particular, one new state, Nevada reported ill persons.


Other headlines found on the issue:

Which tomatoes are safe to eat and which are not?

Locally grown tomatoes are safe to eat, officials say


Tomato scare hurts farmers



TK: David Mitchell of The Packer tells me that no FDA briefing is scheduled today but one may be on tap for tomorrow. It is past time for FDA to pinpoint the problem; perhaps tomorrow is the day.

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Preemptive strike on pests

Is it blatant protectionism or right-thinking trade policy? I tend toward the former conclusion, but it is a novel concept: tax imports of fruits and vegetables based on a calculation of what economic harm may result to the domestic industry if a non indigenous species of pest hitches along with the produce. This 24-page USDA ERS report looks at the issue with a title: "Policy and Risk Processes of Trade-Related Biological Invasions." Here are some questions the report attempts to address:

From the report:

Of course a tariff is not the only pre-invasion policy instrument available – port inspections have been widely used for years to weed out infected shipments. One might expect the optimal tariff to depend on inspections intensity, and vice versa. To what degree are inspections and tariffs complementary or substitutable?

Later....

In what cases can import tariffs, imposed to control damage from NIS, backfire such that damage actually increases? When does freer trade (reduced tariffs) actually lead to less NIS damage?

Later.....

What is the optimal mix of tariffs and inspection intensity which balances minimizing NIS damage with maximizing consumer surplus from imported goods? Under what circumstance does optimal inspection intensity fall as the infectiousness of the goods increases?


TK: Will we see a time when the U.S. imposes a higher tariff on produce from country x than f/v from country y based on the relative risk of pests? Probably not, but the concept gets a complete airing in this report. Here is the summary list of findings.

Summary points:
• Increasing trade tariffs to control introductions can lead to increased damages in certain cases, for example, when increasing land under cultivation increases exposure to NIS damage.
• Levels of crop and ecological damage can move in opposite directions due to changes in trade policy (tariff).
• Crop damage alone can be a poor proxy for the severity of the NIS problem since, in isolation, it may mispredict the sign of change in damage from a particular policy.
• When both tariffs and monitoring are available to regulators, the optimal monitoring intensity may be, after a point, decreasing in the infection rate until, at some limit, no monitoring is desired.
• If an importer is allowed to discriminate amongst heterogeneous trading partners with its tariff, then it can use this instrument to select its optimal trading partner. However, if the importer is constrained by trading agreements, such that only its monitoring intensity may be partner specific, it must choose either a suboptimal trading partner or suboptimal instrument levels.
• In some (but not all) cases, we find evidence that the marginal invasion rate per unit of imports falls as trade history with a region accumulates. However, this attenuation is counteracted by a worsening invasion rate over time, which may serve as a proxy for technological changes in shipping and ecosystem vulnerability.
• There are significant differences in the current marginal invasion rate over imports across trading regions. Because variation also exists in how the marginal invasion rate changes over cumulative trade volume, historic invasions from a particular trading partner are an unreliable proxy for future risk.
• Simple volume restrictions on imports to reduce NIS introductions are not advisable based on coarse cost-benefit calculations.

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Have rates topped out? Truck Rate Report - June 25

We see a slight softening in truck rates reported for the week ending June 24. From the USDA National Truck Rate Report, a summary of the market:


A slight surplus of trucks was reported for the following commodities and regions: citrus and avocadoes from South District California. A shortage of trucks was reported for the following commodities and regions: melons from Florida, Georgia and South Carolina, sweet potatoes from Eastern North Carolina and onions fromSouthern New Mexico. A slight shortage of trucks was reported for the following commodities and regions: carrots and potatoes from Kern District California, mixed vegetables and strawberries from Santa Maria California, potatoes from San Luis Valley Colorado, Upper Valley Twin Falls-Burley District Idaho and Columbia Basin Washington. LAST REPORT was issued for peppers from Imperial, Palo Verde and Coachella Valleys, California and Central and Western Arizona, cherries from Stockton-Lodi-Linden District, California, melons from Florida, mixed vegetables from South Georgia, apples from Hudson Valley New York. FIRST REPORT was issued for melons from South Carolina. All other districtsreported an adequate supply of trucks.


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U.S. slipping in Canada?

Here is a quick rundown of what is new from USDA FAS attache posts. You might pay particular attention to the report about competition for U.S. horticultural exports to Canada, as it drills into market share for fruits and vegetables:

South Africa apples, pears and grapes: Sum-up: South Africa's 2008/09 apple production is expected to fall slightly to 700,000 MT due to decreased productivity of older orchards. Pear and grape production is forecast to increase slightly to 346,000 MT and 266,000 MT, respectively.

South African citrus: Sum-up: According to the CEO of CGA, long-term production of citrus will decline despite current excellent international prices. Last year’s high export prices are expected to continue, especially for products destined for the EU and Russia because of lower production in competitor citrus producing countries. The Rand depreciation increases farmer returns for exports, although increasing input costs (transport, energy, and fertilizers) continue to off-set the total profit.


China and Mexico challenge U.S. horticultural exports to Canada Sum-up: The U.S. market share peaked at about 65% in the early 2000s and currently, Canadian purchases of U.S. agricultural products account for about 60% of total Canadian agricultural imports. Changing diets linked to immigration patterns, broader, year ‘round product offerings by Canadian grocery retailers, changes in ingredient sourcing by Canadian food manufacturing seeking cheaper inputs and increasing competition from global suppliers present challenges for U.S. food exporters to Canada. In recent years, other foreign suppliers, notably China and Mexico, have increased their agricultural exports to Canada especially in the fresh and processed horticultural products sector.







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Food choice more important than food miles


Get used to hearing more and more about the "carbon footprint" of consumer products in coming years. Much of the focus will be toward elevating locally grown food as a way to reduce environmental impacts, but a recent study indicates that consumer choice of food types- whether plant-based, dairy or meat - has a much greater impact on greenhouse gas emissions than factors such as "food miles." The implications are obviously positive for commercial fruit and vegetable marketers. Here is an abstract for the research called "Food-Miles and the Relative Climate Impacts of Food Choices in the United States", by Christopher Weber and H. Scott Matthews.



Despite significant recent public concern and media attention to the environmental impacts of food, few studies in the United States have systematically compared the life-cycle greenhouse gas (GHG) emissions associated with food production against long-distance distribution, aka “food-miles.” We find that although food is transported long distances in general (1640 km delivery and 6760 km life-cycle supply chain on average) the GHG emissions associated with food are dominated by the production phase, contributing 83% of the average U.S. household’s 8.1 t CO2e/yr footprint for food consumption. Transportation as a whole represents only 11% of life-cycle GHG emissions, and final delivery from producer to retail contributes only 4%. Different food groups exhibit a large range in GHG-intensity; on average, red meat is around 150% more GHG-intensive than chicken or fish. Thus, we suggest that dietary shift can be a more effective means of lowering an average household’s food-related climate footprint than “buying local.” Shifting less than one day per week’s worth of calories from red meat and dairy products to chicken, fish, eggs, or a vegetable-based diet achieves more GHG reduction than buying all locally sourced food.


TK: Check out this
thoughtful post at the Ethicurean blog for more analysis and reaction from local food fans.


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Farm Bureau: Crop damage at $8 billion

Midwest growers have suffered billions in losses from floodwaters. Here is a release from the American Farm Bureau estimating the national impact so far:


Crops have incurred more than $8 billion in estimated weather-related damage thus far in 2008, according to American Farm Bureau Federation’s June Market Update. Iowa accounts for approximately half the damage. However, there are notable problems in at least a dozen other states ranging from the excessive wetness and flooding in Illinois to drought in California.

“Wet weather and flooding create issues, as farmers are unable to plant their crops,” said Terry Francl, AFBF senior economist. “The crops they do plant do not sprout and grow, resulting in fewer acres harvested. Additionally, the difficult growing conditions greatly reduce the yield of the crop that is harvested.” He adds that expected Iowa corn yields are reduced 16 percent for this year, and 1.5 million to 2 million acres of corn and soybeans in Iowa that farmers intended to plant this spring will likely remain fallow.

This results in a $4 billion shot to Iowa’s crops. Other states taking a hit from excessive wetness and flooding are: Illinois, $1.3 billion; Missouri, $900 million; Indiana, $500 million; Nebraska $500 million; and an additional $1 billion in remaining wet states.

Some areas are experiencing the opposite problem. Drought is taking a toll on several western states and a few states in the southeast. Northern California battled the driest spring in its history. As a whole, the state suffered $500 million in estimated damage. This equals the estimated drought-related damage in all other states combined.

Nationally, the average corn yield is likely to decline some eight to 10 bushels per acre from the 2008 trend line, mostly due to inclement weather. The national average soybean yield is also likely to be down one to two bushels per acre from the current Agriculture Department projection of 42 bushels per acre.

These damage estimates relate only to crop production as of the last week of June. This means livestock, infrastructure, building and equipment losses aren’t considered. Additionally, the estimate assumes normal weather conditions will ensue for the remainder of the growing season. Varying weather conditions later in the season could cause the estimate to grow or contract.

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Tuesday, June 24, 2008

Michelle Smith - Infiltration study

I'm reposting this powerpoint I received back in April after a visit to FDA offices in College Park, Md. Michelle Smith is a scientist with FDA and has done extensive work with previous produce outbreaks. This presentation points to the possibility that salmonella can be spread via wash water. Also check out an audio file of my mid-April interview with her here.






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FDA: Roll the borders back

This story speaks to the visit by FDA officials to Mexico and the desire of the agency to set up an office in Latin America. From the story:

Speaking during a weeklong visit to Mexico and Central America, Leavitt said yesterday that inspectors were working with their Mexican counterparts to inspect farms, distribution centers and transportation methods. Investigators are focusing their investigation on tomatoes from three states: Jalisco, Sinaloa and Coahuila. Initially, the Salmonella outbreak halted all tomato imports from Mexico, but regulators have now cleared shipments from most of the country, except those from the three suspect states.

In advocating for the Latin American food safety office, Leavitt cited both the tomato outbreak, and another Salmonella incident earlier this year that stemmed from cantaloupes imported from Honduras. ” We’ve had two incidents in the last month and a half: the Honduran cantaloupe, and now the tomatoes,” Leavitt said. “What it demonstrates is that when these incidents occur, we need a quick response.”

Leavitt said that inspecting produce at the border is no longer sufficient to insure food safety, and said that “rolling the borders back” so that inspectors have access to farms and facilities were foods are produced and packed would be a more efficient strategy.


TK: If the U.S. prevails setting up an office in Latin America, don't think it too far-fetched that Mexican authorities would want a similar accommodation based on "the principle of reciprocity" for U.S. exports to Mexico. In fact, Big Apple here notes that China seeks to establish food safety offices in the U.S. in response to a request by the FDA to set up shop in China.

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June 23 CDC: 613 persons in 33 states, DC - April 10 to June 13 onset


TK: The CDC changed their outbreak map, and I have to give props to Jim Prevor over at the Produce Pundit, who had suggested in one of his earlier posts that the FDA revise their maps to make them more representative of the number of victims in each state. From the CDC's June 23 update:


Since April, 613 persons infected with Salmonella Saintpaul with the same genetic fingerprint have been identified in 33 states and the District of Columbia. These were identified because clinical laboratories in all states send Salmonella strains from ill persons to their State public health laboratory for characterization. The marked increase in reported ill persons since the last update is not thought to be due to a large number of new infections. The number of reported ill persons increased mainly because some states improved surveillance for Salmonella in response to this outbreak and because laboratory identification of many previously submitted strains was completed. In particular, one new state, Massachusetts reported ill persons. The number of ill persons identified in each state is as follows: Arkansas (3 persons), Arizona (34), California (8), Colorado (4), Connecticut (4), Florida (1), Georgia (14), Idaho (3), Illinois (45), Indiana (9), Kansas (9), Kentucky (1), Maryland (18), Massachusetts (12), Michigan (4), Missouri (12), New Hampshire (1), New Jersey (1), New Mexico (79), New York (18), North Carolina (1), Ohio (3), Oklahoma (17), Oregon (5), Pennsylvania (5), Rhode Island (2), Tennessee (4), Texas (265), Utah (2), Virginia (21), Vermont (1), Washington (1), Wisconsin (5), and the District of Columbia (1). Among the 316 persons with information available, illnesses began between April 10 and June 13, 2008.

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SRO while the food and fuel debate rages on

Lately, there has been standing room only on Johnson County buses running in suburban Kansas City, though the route I take from Olathe to 85th and Antioch is perhaps half full. With $4 per gallon gas seemingly here to stay, more and more commuters are hopping on the bus and leaving their SUVs in their driveway.

Many advocates of ethanol argue that gasoline prices would be even higher if not for the expanding production of corn-based ethanol.

However, the Food before Fuel coalition continues to dispute the benefits of ethanol and has called on recently retired USDA chief economist Keith Collins s to do some heavy lifting in opposition to government mandated renewable fuel standards.

With Midwest flooding taking a heavy toll on the nation's corn crop as it is, political pressure is increasing to revise or ditch government targets for ethanol production.

This just slid across the inbox this morning;

Two studies released today show that federal ethanol mandates have placed significant pressure on food prices, while any effect on gasoline prices has been “almost too small to measure.”

Dr. Thomas Elam of FarmEcon LLC, and Keith Collins, former chief economist of the U.S. Department of Agriculture, submitted their new analyses to the Environmental Protection Agency (EPA). Today is the end of EPA’s public comment period on a request from Texas Gov. Rick Perry to partially suspend the Renewable Fuels Standard (RFS) in light of serious economic harm caused by the current policy.

“The 2008/2009 increase in fuel production made possible by the RFS is almost too small to measure against the global energy market, but the effects on food prices and security are huge,” Elam notes. “The U.S. government should re-examine and reduce the RFS in light of the damage it can do to our food production capacity and the overall welfare of the country.”
Elam’s study concludes that ethanol actually has had little effect on gas prices – only about 4 cents per gallon.

Elam: Maintaining RFS would be “devastating”

Dr. Elam’s study also describes the expected impact of crop shortages on commodity and food prices if congressional food-to-fuel mandates remain at their current levels. The study concludes that maintenance of the current RFS in light of recent flooding in the Midwest would prove “devastating” to livestock and poultry farmers and would increase the burden of food prices for American consumers.
Elam’s study, entitled “Biofuel Support Costs to the U.S. Economy: The Key Role of the RFS in a Feedstock Shortage Scenario,” investigates two distinct scenarios: one in which there is crop damage and the RFS remains in place, and one in which there is crop damage but the RFS mandate is reduced by 50 percent.

“Maintenance of the current RFS schedule in the face of a smaller 2008 corn crop will be devastating to meat, dairy and poultry producers,” Elam wrote. “Consumers will suffer as food and fuel costs rise and supplies of corn-based foods diminish. The overall economy will be damaged from higher inflation and lost jobs in the food production sector.”
A recent Goldman Sachs analysis predicted that 2-4 million acres of corn may be lost in the wake of the Midwest flooding. The USDA is expected to provide a detailed estimate of losses in the coming weeks and has already revised down its expected crop yield data.
Collins: Government support for corn-based ethanol ensures a permanent, significant, and increasing demand for corn

The Collins study, “The Role of Biofuels and Other Factors in Increasing Farm and Food Prices,” indicates that unless the RFS is suspended or revisited, U.S. grain stocks – already pushed to dangerously low levels – will fall even further as ethanol consumes a larger share of the dwindling corn supply.
"Government support for corn-based ethanol ensures a permanent, significant, and increasing demand for corn,” Collins said. “These policies interfere with the normal price rationing function of markets when supplies are short such as in 2008, with production being reduced by flooding and excess moisture. In this short-crop environment, biofuels policy, including mandated use of ethanol, causes even higher corn prices, shifts the demand adjustment burden to non-ethanol users of corn--particularly the livestock sector--and puts continuing pressure on food prices."

Studies: Biofuels “a significant factor” in higher food prices

Elam and Collins also weigh in on ethanol policy’s impact on food prices.

The USDA has argued that biofuels policy has had very little effect on food prices – as little as 2-3 percent. The Collins study contradicts this finding directly and points to potentially serious impacts on consumer prices.

“The increase in retail food prices due to biofuels is estimated to be 23-35 percent above the normal increase in food prices that would occur over 2-3 years,” Collins wrote. “Accordingly, biofuels are now becoming a significant factor in higher food prices.”

The Elam study also warns that reduced crop yields coupled with the RFS and corn prices at $8 per bushel would have an overwhelming effect on food producers and American consumers: “While mid-2008 profitability indicators for meat and poultry production were depressed well below normal levels, production was still generally higher than prior year levels,” the study noted. “Without a reduced RFS, that will all change in the coming months. Meat, poultry and dairy producers will find it necessary to deal with not only higher feed costs, but the sheer availability of feed ingredients at any price. “
Reducing the RFS by half would bring down the price of corn by $2.25 per bushel, Elam argues, saving more than $9 billion in feed and food costs. The average cost of a ton of soybean meal would fall by $150, saving over $5 billion.
Both the Elam and Collins studies can be found at www.foodbeforefuel.org. Elam’s study was made possible by the Balanced Food and Fuel Coalition. Collins prepared his study for Kraft Foods Global, Inc. as supporting material for its comment submission to the EPA on Texas Governor Rick Perry’s request for a waiver of the Renewable Fuel Standard.

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Watching The River Flow

Back from taking daughter #2 on a college tour. It should be noted that trying to communicate with the sometimes-obtuse teenager through mood swings during this process is, frankly, not that much of an improvement from what I had left behind with tomatoes and the FDA.

But...things could be worse. In a reprise of the Pretenders' 1980's tune 'My City Was Gone', as a part of checking out colleges we visited daughter #1 in Iowa City & saw the results of the devastating floodwaters. Even though they had receded hundreds of feet in some locations, the damage to campus buildings, the auditoriums, the Union, my old apartment & fraternity house for God's sakes, was almost beyond belief. And although we couldn't get up there, Cedar Rapids, 30 miles to the north, got it worse. Homes & businesses in this region that will never come back put diminished trading from a salmonella outbreak in a new & better perspective, for me anyway.

However, in Iowa I did detect a 'we're going to get through this' attitude that was pervasive throughout. Certainly, it's been reported that FEMA is doing a much better job this time around, learning the tough lessons from Katrina. But indulge me a little Midwest or Hawkeye pride in that these people are definitely the can-do type. One only needs to spend a winter like this last one on the Great Plains to realize that folks around here can take a hit and keep on ticking.

Finally...from the Seven Words Not To Be Uttered In A Blog Department (RIP George Carlin, the best in the biz for many years & inventor of the word 'Molubaday'--the day after tomorrow), take a glance at the expanded FDA page on the tomato/salmonella outbreak, and check out this link, called the 'Traceback Investigation Flow Diagram':

http://www.fda.gov/oc/opacom/hottopics/tomatoes_image.pdf

It is labeled a draft, a heartwarming realization to me that the accurate version must be forthcoming. Trying to decipher its meaning makes me do my best Forrest Gump "I am not a smart man...", but I would advise changing the working title of the flowchart to 'Dog Chasing Its Tail'.

Later,

Jay

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