Fresh Produce Discussion Blog

Created by The Packer's National Editor Tom Karst

Friday, October 31, 2008

PP RSS

In the spirit of bipartisanship so lacking in the political realm, I've added another RSS feed to the site- Jim Prevor's Perishable Pundit. You'll find it near the other blog feeds near the bottom of the page. In the spirit of cross fertilization of ideas in the world of fresh produce blogging I welcome Jim to host the RSS feed from Fresh Talk as well.

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California balking at Chilean grape systems approach

Worried over pest concerns, California grape interests are holding up a stop sign to the USDA proposal that would allow a "systems approach" to Chilean grape imports. This is significant because the proposal is viewed as an important side issue in the possible deal between Chile and the U.S to move the effective date of California desert grape marketing order (triggering mandatory import quality inspections) from April 20 to April 10.

Kathleen Nave of the California Table Grape Commission wrote in an Oct. 24 comment that they felt surprised by the proposed rule:

"As noted earlier, we are particularly concerned that,in spite of our very close relationship with APHIS and ongoing discussions about a host of pest and disease issues, we have only now learned about this matter - and then only through a Federal Register notice."

Here is the argument from Chilean interests, this penned by Andy Economou of Unifrutti...

The systems approach is a well-established and effective method for reducing phytosanitary risk with significant commercial validation on a variety of fruit and vegetable commodities. As noted in the proposed rule, its efficacy was proven in two pilot programs conducted by the Servicio Agricola y Ganadero, the national plant protection organization of Chile, with the cooperation of the USDNAPHIS, during the 200212003 and 2006/2007 growing seasons. The systems approach for products shipped from Chile is especially appropriate given Chile's natural defenses to phytosanitary infestation, nearly forty years of close cooperation with APHIS on managing phytosanitary risk and well-developed infrastructure that assures implementation of the risk management plan. The systems approach has already been adopted as an effective phytosanitary measure in the importation of tomatoes, clementines mandarins and tangerines from Chile. We also note that APHIS has proposed to use the same systems approach for sweet oranges and grape fruit from Chile. Please see Docket No. APHIS-2007-0 1 15.


TK: Economou also notes the systems approach would reduce the use of the ozone destroying fumigant methyl bromide on Chilean grapes. Nave and a whole host of California interests have proposed a 60 day extension to the comment period; the end of the comment period was Oct. 27 and no word yet about an extension. Could that mean this rule will happen without delay, despite California objections? Stay tuned.

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New threads at FPIDG

Big Apple and Luis have been active again on the Fresh Produce Industry Discussion Group overnight.Here are some threads they just put up. Come join the party if you are not a member.

Agriprocessors' big faces long stretch for harboring illegal - Big Apple

With the arrest of the former chief executive, Sholom Rubashkin, federal authorities extended their criminal prosecution to the highest level of management at the plant.

Could a City Prohibit Selling Food to an Illegal Alien? - Luis

Attorney Omar C. Jadwat of the ACLU's Immigrants' Rights Project in New York said Munley had correctly concluded that Hazleton's ordinance would interfere with the enforcement scheme chosen by Congress which calls for the strictest enforcement only at the borders. "It's not up to the states to choose an iron fist where Congress has chosen a velvet glove," Jadwat said.


Merced man cracks pistachio problem - Luis

His young daughter, Anahita, helped him discover it when they were trying to dry some of the pistachios that Foroutan grows. The nuts were raw and she thought they should put them in the microwave. When they came out, the shells had opened on their own and Foroutan had discovered a new way to crack nuts. He and his daughter patented the
process.

Grocery stores/food budgets are shrinking - Luis


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Thursday, October 30, 2008

Focus on facilitating trade

I'm not sure what's news here, but it may be worth noting that CBP is trying to be more sensitive to trade issues. Just slid across the inbox from CBP:


U.S. Customs and Border Protection Commissioner W. Ralph Basham today announced the publication of the CBP Trade Strategy at the annual CBP Trade Symposium in Washington, D.C. The trade strategy is the first published document that explains how CBP will accomplish its mission of facilitating legitimate trade.

The CBP Trade Strategy covers the next five years, when the volume of imports and the complexity of trade laws are expected to grow. In fiscal year 2008, CBP processed imports worth $2.2 trillion and collected $32 billion in revenue.

The four major goals of the trade strategy are to:

· facilitate legitimate trade and ensure compliance;

· enforce U.S. trade laws and collect accurate revenue;

· advance national and economic security; and

· intensify modernization of CBP’s trade processes.

The Trade Strategy reflects CBP’s layered approach to trade facilitation and enforcement, which expands pre-entry and post-release compliance verification programs to reduce unnecessary delays for legitimate imports at the borders.

For more information on CBP’s Trade Strategy, please log on to http://www.cbp.gov/xp/cgov/trade/.


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USDA ERS Fruit and Tree Nut Yearbook - 2008

Thankfully, these government reports no longer come to our office in the mail. This annual report is packed with 200 pages of data about fruit and tree nuts, and you probably will find something in the report useful to you if you grow, pack, import, export, sell or eat fruit. Find the 2008 USDA ERS Fruit and Tree Nut Yearbook here.

Here is a bit about fresh fruit consumption in 2007:

Per capita fresh fruit consumption averaged 97.5 pounds in 2007, 4 percent below the previous year (table f-36). Americans ate about the same amount of fresh noncitrus fruit between 2006 and 2007, but 16 percent less citrus due to smaller citrus crops in California, which produces most of the fresh oranges and lemons. Noncitrus fruit consumption veraged 79.5 pounds per person in 2007, the fourth highest on record. Strong demand for bananas and grapes, blueberries, cranberries, strawberries, cherries, apricots, and papayas helped offset weakened demand for fresh apples, peaches and nectarines, pears, kiwifruit, plums/prunes, pineapples, and avocados. Mango consumption remained unchanged from 2006 at 2.10 pounds per person, tying for the record high.

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Roubini on the Hill: the rut of recession

Nouriel Roubini and other economic pundits testified before the Joint Economic Committee on Capitol Hill today. An excerpt from his prepared remarks, where he says the market hasn't responded all that well to the government's moves so far:


The hope that economic contraction in the US and other advanced economies would be short and shallow — a V-shaped six-month recession — has been replaced by certainty that this will be a long and protracted U-shaped recession, possibly lasting at least two years in the US and close to two years in most of the rest of the world. And, given the rising risk of a global systemic financial meltdown, the prospect of a decade-long L-shaped recession — like the one experienced by Japan after the collapse of its real estate and equity bubble — cannot be ruled out.

Indeed, the growing disconnect between increasingly aggressive policy actions and strains in the financial market is scary. When Bear Stearns’ creditors were bailed out to the tune of US$30 billion in March, the rally in equity, money and credit markets lasted eight weeks. When the US Treasury announced a bailout of mortgage giants Fannie Mae and Freddie Mac in July, the rally lasted just four weeks. When the US$200 billion rescue of these firms was undertaken and their US$6 trillion in liabilities taken over by the US government, the rally lasted one day.
Until the recent US and European measures were announced, there were no rallies at all. When AIG was bailed out to the tune of US$85 billion, the market fell 5 percent. Then, when the US$700 billion US rescue package was approved, markets fell another 7 percent in two days. As authorities in the US and abroad took ever more radical policy steps in the last few weeks, stock, credit and money markets fell further, day after day for most days. Even the rally following the G7 statement and radical policy actions taken to back stop the financial system lasted only one day and was followed by two weeks of sharply falling equity prices and rising CDS and credit spreads. Policy authorities seem to have lost their credibility in financial markets as - until recently – their actions were step by step, ad hoc and without a comprehensive crisis resolution plan.

TK: Roubini argues for mortgage relief to help households find more disposable income and big injections of federal money in infrastructure projects to soften the "hard landing" the U.S. will feel from the recession. Bottom line, produce marketers and retailers better be prepared to hone their value message in the months ahead.

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PMA poster - International Paper


Shirley Chapman, artist, shows off the 2008 PMA poster on the show floor on Oct. 26.

Next time you attend a PMA, make sure you stop by the International Paper booth for the official show poster. Chapman, based in Fremont, Calif., is an artist who has designed the PMA poster for the past six years, and I visited with her about the process. She says the acrylic painting that is the basis for the poster takes about 100 hours to create. The posters look a little like the old fruit labels, and Chapman said that is the look she likes to create for the collector item posters.

"There have people who have been collecting since way before I started," she said. This year, about 3,000 posters were printed, and typical runs are between 4,000 and 5,000. Chapman numbers and signs all the posters while she is at the show, and she said she has been told the posters are hung up in offices all around the world.

The
PMA official poster has been a part of the show for about 18 years.

The PMA board of directors doesn't get to see the poster until the week before the show, she said. Roger Rasor, Manager of Graphics and Advertising for International Paper, this year presented posters to the PMA chairman for 2008 and the convention chair at an International Paper-sponsored dinner Thursday before Fresh Summit.

In the bag of stuff taken home from PMA, the official show poster should always be accounted for.





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Tale of the tape - economy in reverse

The U.S. economy is shrinking, and it probably won't be the last quarter that the GDP numbers are in reverse gear. Here is the link. Real gross domestic product - the output of goods and services produced by labor and property in the U.S. dropped by 0.3% in the third quarter, compared with a 2.8% increase in the second quarter.

The Commerce Department said real personal consumption expenditures decreased 3.1% in the third quarter, compared with a an increase of 1.2% in the second quarter. Durable goods decreased 14.1%, compared with a 2.8% decrease in the second. Nondurable goods decreased 6.4, compared with a second quarter increase of 3.9%.

Dissecting that nondurable goods expenditure further, the Commerce Department noted that consumer expenditures on food dropped a whopping 8.6% in the third quarter, compared with a gain of 4.1% in the second quarter and a gain of 1.3% in the first quarter. By comparison, expenditures on clothing and shoes were down 11% and auto sales dropped 25%.

TK: People gotta eat, yes. But these numbers on the reduction of food purchases in the third quarter are scary; it will be revealing to see if these numbers are reflected in United's Fresh Facts third quarter retail report.....

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Poll closed - Facebook generation wins

The recent Fresh Talk poll queried readers about their participation in social/business networking Web sites. Here is the question and the results:


What social business networking sites are you a member of?
Facebook
7 (53%)
Linkedin
5 (38%)
Plaxo
3 (23%)
None of the above
3 (23%)


Votes so far: 13
Poll closed


TK: About a quarter of our readers voting indicated they were not members of any of the options. For those of you not on linkedin.com, I would commend its value and organization. Also you would likely benefit from joining the Fresh Produce Industry Discussion Group, both on the discussion board and at linkedin.

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EU Commission - comment on voluntary third party certification

Just saw this comment on the federal docket from the EU about the FDA draft guidance on voluntary third party certification program. It is telling when the uber-regulated European Commission worries that the FDA plan is overly prescriptive. The EU is also concerned the FDA guidance discriminates in favor of domestic facilities. I pulled a few excerpts from the document below:

Based on the view that the food safety provisions of the European Union and the United States both deliver a similarly high level of protection, the implementation of the Food Protection Plan provides an important opportunity to strengthen the collaboration between FDA and DG Health and Consumers (SANCO). We hope that the Plan will reduce administrative burdens for food businesses in transatlantic trade rather than creating additional red tape and cost in the absence of identified risks of EU food and feed products.

Accordingly, the European Commission stands prepared to actively support all reasonable measures which promote a high level of safety in a proportionate and non-discriminatory manner. However, the draft Guidance document falls regrettably short of this goal in several important ways. Would it be enforced in its current form and wording, very few European businesses - which are among the world’s best performing and most strongly controlled – would qualify for certification under the voluntary program as it is currently laid out in the draft Guidance document. This cannot be justified.

Non-discrimination – is there a level playing field?

First and foremost, the Guidance de facto applies to businesses in foreign countries rather than US domestic facilities, and it is, therefore, deeply discriminatory.

US domestic businesses, which decide not to voluntarily sign up to a third party certification program, would potentially face a higher frequency of FDA inspection – depending from resources. Given that all businesses have to comply with the US Food Law and assuming that most of these businesses indeed act lawfully, the incentive for US domestic facilities to seek third party certification is very limited.

In contrast, importers are confronted with the alternative of either seeking third party certification or accepting delays and detentions in entry clearance with each day costing thousands of dollars of cash value. Importers of regular shipments of high volumes of good will have little choice but to ‘voluntarily’ subscribe to the program and accept the higher cost of market entry. Likewise, importers of perishable goods will have to balance the cost of potential delays against the considerable cost of compliance – in contrast to US domestic producers. And many small businesses will find it impossible to shoulder the higher cost involved in either accepting lengthy detentions or signing up to certification procedures.

Nothing in the history of EU food exports to the United States justifies this discrimination and, given the extent of the financial and organizational interrelationships of transatlantic food industries, such a discrimination might have deleterious economical consequences for both sides.

Proportionality – what is the appropriate level of protection?

Second, the scope of the proposed, voluntary measures goes far beyond the legal requirements of basis provided by the Food Drugs and Cosmetics Act. Given that there is no legal basis to request, for example, HACCP-based self control systems from US domestic businesses (except fishery products and fruit juices), crisis management plans or traceability systems from the very source of each ingredient all the way to the customer, can it be justified that these requirements are imposed on EU exporters? If the appropriate level of protection of the United States is defined by the Food Drugs and Cosmetics Act, official, regulatory decisions (i.e. detention at the border) must be taken on this basis and not on conditions which go far beyond these legally defined levels of protection.

Later....

Implementation – what exactly should be certified?

In its current form, the draft guidance lists all possible food safety and food security requirements –employee training, suppliers management, security issues, HACCP-based self control systems, traceability, complaints, recall and crisis management – in the form of a general wish list, which may be applicable or desirable. But the draft guidance document gives no guidance, which measures would actually be warranted and justifiable for specific food business operations in specific regions on the basis of a rational and transparent risk analysis, taking into account inherent risk of the product and criteria of threat or vulnerability.

Without further third party certifiers will feel obliged to follow the very letter of the available, general guidance, rather than making rational and proportionate judgments based on risk. To enjoy the benefit of expedited border processing, businesses will tend to play along and implement measures with high incremental cost and very little safety or security gains.

The incremental benefits of such a ‘race to the top’ would be rather small. The disadvantages are clear: Consumers ultimately will have to compensate the cost in the form of higher prices; small businesses will be driven out of markets and reduce competition and innovation; the diversity of our food supply and our choices will diminish.

To allow businesses and certifiers to strive for optimal solutions, balancing safety, security and cost, and implementing official and third party controls, FDA has to define its appropriate level of protection for individual products. Only with a clearly defined target, businesses and certifiers will be able to identify the appropriate mix of measures to meet them.

Wolf Maier
Counselor Health, Food Safety, Consumer Affairs
Delegation of the European Commission
Washington, DC

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Wednesday, October 29, 2008

The economy again, Del Monte and other news

Will consumers have a backlash against what they sense as misuse of the term locally grown? USA Today explores the topic in one of the news items below I snatched from the Web.

Locally grown sounds great but what does it mean?
From USA Today:

Just how do some retailers define locally grown?

• Wal-Mart, the nation's biggest retailer, considers anything local if it's grown in the same state as it's sold, even if that's a state as big as Texas and the food comes from a farm half the size of Manhattan, as in the case of the 7,000-acre Ham Produce in North Carolina.

• Whole Foods, the biggest retailer of natural and organic foods, considers local to be anything produced within seven hours of one of its stores. The retailer says most local producers are within 200 miles of a store.

• Seattle's PCC Natural Markets considers local to be anything from Washington, Oregon and southern British Columbia.


US stocks decline as Fed rate cut fails to ease concerns From Bloomberg:

Equities around the world tumbled this month, wiping out more than $12 trillion of market value, after money markets froze, banks' credit losses grew and economic growth weakened. All 48 of the developed and emerging markets tracked by MSCI Inc. have declined in 2008, with 20 losing at least half.

One on one with Roubini

GHARIB: Professor Roubini, who or what is the major culprit of this financial crisis?

ROUBINI: First of all the Fed kept interest rates too low for too long and created the housing bubble. Secondly the Fed and the other regulators were asleep at the wheel and allowed all these toxic mortgages to be created without controlling it. Three, there was plenty of greed and excessive risk taking on Wall Street. And four, the rating agencies had major conflicts of interest because they were being paid by those that were supposed to be rating. So the blame is to be shared by many different culprits.

Every little helps as Tesco cuts sales target

SUPERMARKET giant Tesco has cut its sales targets for the first time in several years as it prepares for a difficult run.
Britain's biggest retailer is now budgeting for two per cent underlying sales growth in the UK instead of its usual three to four per cent.


Credit card losses sting banks


The August charge-off rate — the percentage of credit card loans written off as not being paid — spiked to 6.82% in August from 6.36% in July, Moody's Investors Service said earlier this month. Moody's added that the rate could rise to 7.5% by the end of 2009, above the peak of 7.1% in May 2003 after the last recession

Fresh Del Monte 3Qprofit falls but tops estimates

Del Monte saw strong growth in its banana sales, up 20 percent to $332.7 million as sales volume increased 5 percent in North America. Sales of gold pineapple were strong as well, up 13 percent in the quarter to $122.5 million.


Aldi: Grocer for the recession From Time:

The time appears ripe for deep-discounters, and Aldi is on an expansion tear. Last year, Aldi generated some $5.8 billion in U.S. sales, up from $5.3 billion in 2006, according to Supermarket News, an industry journal. It now has about 950 stores in 29 states and plans to open more than 100 stores in the next two years in Connecticut, Missouri and Texas. The company will have opened 100 new stores by the end of the year, double the number opened last year.


Wal Mart view: Big plans abroad: small U.S. stores

Wal-Mart Stores Inc. said it will continue emphasizing international expansion, particularly in emerging markets such as Brazil, as it trims U.S. growth, company officials said on Tuesday.

A day after declaring that it will curtail openings of its traditional U.S. stores and focus more on remodeling existing locations, the world's largest retailer by sales laid out a vision for growth during the second half of a two-day conference with investment analysts.



Revived grocery union takes aim at Fresh & Easy


Now, Fresh & Easy says it will recognize the employees as part of a bargaining unit only if they vote to become union members in "government-supervised secret-ballot elections." But its strategy might not work much beyond next year.

Labor leaders expect that if Barack Obama wins the presidency and the Democrats retain control of Congress, labor would gain passage of the Employee Free Choice Act. As proposed, it would allow union representation when a majority of employees signs cards requesting it and eliminate requirements for a National Labor Relations Board-supervised secret ballot.

Efforts grow to legalize a section of LA workforce


“The public doesn’t seem to know that we need immigrants,” he says, pointing out that incomers will take an increasing share of work as baby-boomers retire. “If we think we don’t need them then we won’t legalise them.”

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Truck Rate Report - Oct. 29

Most rates are stable to down 5% or more. From the USDA Truck Rate Report:


A shortage of trucks was reported for the following commodities and regions: onions from Idaho and Malheur County, Oregon. A slight surplus of trucks was reported for the following commodities and regions: sweet potatoes from Atwater Livingston California, carrots and grapes from Kern District California, pears from Sacramento & San Joaquin Valley California, apple pears, grapes, peppers, apples, kiwi and lettuce from San Joaquin Valley California, lettuce, mixed vegetables, strawberries and raspberries from Salinas-Watsonville California, citrus, bell peppers and strawberries from South District California, and potatoes from San Luis Valley Colorado. A surplus of trucks was reported for the following commodities and regions: mixed vegetables from South Georgia, sweet potatoes from Louisiana and Mississippi, citrus, avocados and mixed fruits and vegetables from Mexico Crossings Through Texas and watermelons from Texas. Idaho and Malheur County, Oregon noted a truck shortage for refers, adequate for flatbeds. FIRST REPORT was issued for melons and mixed vegetables from Mexico Crossing Through Nogales, Arizona, melons from Palo Verde Valley, California and Western and Central Arizona and potatoes from Aroostook County Maine. All other districts reported an adequate supply of trucks.

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What if Mexican labor supply dries up?

Does the slumping economy present the perfect time to purge the country of illegal aliens. Not so fast, my friend. Check out this iinteresting read here about the politic dynamics of the immigration debate from columnist Thomas D. Elias. Here is a telling excerpt:


Illegal immigrant Mexican workers are leaving this country in droves, crossing the border north to south and going back home. Some are already coming back because things are even tougher in Mexico, but so far, not most.
The reasons are many, including increased enforcement activity against American employers who hire illegals and more cooperation from local police in various parts of this country.
But economics are the main reason immigrants are leaving. As more companies cut budgets and banks foreclose on many thousands of homes, employment opportunities for unskilled illegal immigrants have diminished.
Over the last 18 months, according to Carlos Flores Vizcarra, the Mexican consul general in Phoenix, more than 2 million Mexican immigrants have returned home because of diminished opportunities here. That amounts to about 10 percent to 12 percent of all illegals who were in this country two years ago.
It may be the realization of a fantasy for the anti-immigration lobby, but it also might be a hint of a nightmare to come for other people and businesses. For one thing, farmers in many parts of America complained both of the last two years of a labor shortage. Whether or not it's coincidence, the prices of many foodstuffs rose steeply during that time and they're still going up.


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Winning is what matters


Jack Welch, business guru and former CEO of GE, spoke at PMA this past weekend. While I didn't take notes during his speech, a couple of his remarks had some staying power. One of his maxims was that an economic downturn is a good time to " buy or bury" your competition, or raid a rival for a top talent. The team with the best players wins, Welch reminds us.

Another "straight from the gut" exclamation was that the greatest good a company can do is to make money. Making money allows the corporations to hire employees, reinvest profits and create economic activity. Without profits, a company will wither and die, and therefore will not be around to begin sustainability initiatives and propose well meaning and environmentally sensitive projects.

This is the extremely shorthand version, of course, but Welch has a point. And I found a Web site with a few more Jack Welch quotes that communicate the essence of his hard driving and brutally frank message. Here are a few more to chew on:

An organization's ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.

Control your own destiny or someone else will.

Face reality as it is, not as it was or as you wish it to be.

Giving people self-confidence is by far the most important thing that I can do. Because then they will act.

Strong managers who make tough decisions to cut jobs provide the only true job security in today's world. Weak managers are the problem. Weak managers destroy jobs.

If you don't have a competitive advantage, don't compete.

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Tuesday, October 28, 2008

Safe harbor - supplemental final rule issued

As noted earlier, the Department of Homeland Security has pushed its supplemental final rule forward on the no-match rule for employers. From the summary in today's FR:

The Department of Homeland Security (DHS) is finalizing the Supplemental Proposed Rule published on March 26, 2008 and reaffirming regulations providing a ‘‘safe harbor’’ from liability under section 274A of the Immigration and Nationality Act for employers that follow certain procedures after receiving a notice— either a ‘‘no-match letter’’ from the Social Security Administration (SSA), or a ‘‘notice of suspect document’’ from DHS—that casts doubt on the employment eligibility of their employees. DHS is also correcting a typographical error in the rule text promulgated in August 2007. DATES: This final rule is effective as of October 28, 2008.


TK: Find the entire rulemaking docket here. The DHS estimated that a firm with more than 500 employees with a 40% no match rate would spend $30,239 complying with the rule. Reaction continues to roll in. From the California Farm Bureau.

In spite of Chertoff's eagerness to have the court revisit the issue, a California Farm Bureau specialist said he expects the injunction will remain in place for at least several months. California Farm Bureau Federation Associate Counsel Carl Borden, who has been following the case and has read the new document, said the Homeland Security response did not revise the rule, but simply provided more background information to justify it.

"Nothing's changed. The government intended this whole process to address the court's issues with the no-match rule. DHS didn't change a word of the no-match rule," Borden said. "All they did was give additional background for it. They also conducted and concluded from a small-employer impact analysis that the rule will not unduly burden small employers."

But the United States Chamber of Commerce contends that the rule's aggregate cost to employers would range from $1 billion to $1.6 billion annually.

Homeland Security says its response clarifies its position that an employer must take reasonable steps to resolve a Social Security number discrepancy identified in a Social Security Administration no-match letter. DHS says the failure to take such steps, coupled with the employer's receipt of the letter, proves the employer had "constructive knowledge" that a current employee identified in the letter is not eligible to be employed in the United States--a violation of federal law. In addition, the rule specifies the specific steps an employer may take to earn a "safe harbor" guarantee that Homeland Security will not use a no-match letter as evidence.

"No-match basically says you are going to get a letter from Society Security as an employer. It is going to tell you there is a problem. You have to resolve the problem," Chertoff said. "If you take the (no-match) letter and throw it in the wastebasket because you do not want to be bothered or you do not want to get the bad news, then you are taking a risk."

Borden said he believes the issue will be tied up in court for a long time.

"DHS says its effort will satisfy the court's concerns about the rule and that the court will lift the injunction," Borden said. "But the plaintiffs will vigorously contend the supplemental rulemaking didn't come close to fixing the problems identified by the court. The stakes are so high that no matter how Judge Breyer rules, it's a given the losing side will appeal."

Homeland Security originally proposed the no-match rule in June 2006 and first issued it in final form in August 2007.

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Economy - where from here?

Just back from the PMA convention, where on exhibitor told me it was a place that was happily insulated from the doom and gloom in recent headlines. Unfortunately, as we return to our offices, the doom and gloom have not departed. Consider this story that quotes the now-familiar economist Roubini:

U.S. house prices will fall by the most since the Great Depression and continue to decline until at least 2010, said Nouriel Roubini, the professor at New York University's Stern School of Business who predicted the current financial crisis in 2006.

''I expect home prices are going to fall at an annualized rate of 16 percent,'' Roubini said Monday in a Bloomberg Radio interview. ``The cumulative fall in home prices is going to 40 percent until 2010. It's the biggest drop in home prices since the Great Depression.''

The latest S&P/Case-Schiller home-price index of 20 U.S. cities dropped a more-than-forecast 16.3 percent in July from a year earlier, after a 15.9 percent decline in June. The gauge has fallen every month since January 2007, indicating that the worst housing recession in at least a generation has yet to bottom out even before this month's market turmoil.

As many as ''21 million out of the 50 million homes that have mortgages are going to go into negative equity,'' Roubini said. ``People will have an incentive to walk away from their homes.''

The 50-year-old former senior advisor to the U.S. Treasury Department forecast in February a ''catastrophic'' financial meltdown that central bankers would fail to prevent and that would lead to the bankruptcy of large banks exposed to mortgages. His comments preceded the collapse of Bearn Stearns & Cos. and Lehman Brothers Holdings Inc.

``We're at the beginning of a U.S. and global recession, Roubini said. ``We're going to have a severe and protracted two- year recession.''

It would be no surprise if the U.S. Federal Reserve lowered interest rates by 50 basis points to 1 percent, Roubini said, without being specific on the timing of the cut. Rates will subsequently be reduced to ''nearly zero percent'' as a recession takes hold, he said.


TK: We can hope Roubini is wrong, which has been a rare event. Even if he is right, however, all is not lost. One of the most memorable moments of the convention, for me, was Bruce Taylor's speech to attendees about his experience when things weren't going well. From his speech:


Finally, let me tell you a personal story to provide encouragement for you. I am sure a touch of fear has crossed your mind recently. Fourteen years ago I did not have a job. I had started a new company, but that was only a piece of paper. I had business cards made at Kinko’s. I would spend the day in a small office at our home…and when no one was looking I would lie on the floor and stare at the ceiling… for hours. I was scared… and it felt like I had nothing. But usually about the time I was feeling sorriest for myself, our youngest son would crawl in and lay on top of me… and Linda would come in with a hug and a word of encouragement. In the next twelve months I came to learn that instead of having nothing… I really had everything. I had a loving and supportive family; I had former suppliers and former customers who wanted to support me; I had friends and former associates who wanted to be on the new team; and I had the benefit of thirteen years of PMA-inspired events, education and relationships.

I tell you this because today, each of you has more going for you than you think. You have more strength and support than you know.

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Monday, October 27, 2008

PMA Slideshow Days 3 and 4

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ERS report - use of contracts in the supply chain

Look for the new USDA ERS report on the organic supply chain:


Rapid growth in the organic foods market has placed great pressure on farmers and handlers in the U.S. organic sector. Handlers are firms that produce, process, and distribute organic food. As the middlemen in the supply chain, organic handlers have been unable at times to provide as much of their final product as the market wants and have also found needed ingredients in short supply. An Economic Research Service survey of certified organic handlers in the United States collected information on those intermediaries’ marketing and procurement practices for 2004. The data reveal that handlers widely use contracts as a means to not only procure needed ingredients but also to develop and maintain strong working relationships with their suppliers. Only a few organic handlers, however, have worked to assist farmers directly with farmers’ transition to organic production.

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Winding down

Exhibitors are generally happy with the PMA show. Some have noted that buyers have perhaps trimmed down the list of who they sent this year, but exhibitors have seen everyone they wanted or expected to see. One exhibitor said Safeway wasn't too visible... Talk continues about the third day of the show, with one offering if the Friday-Saturday-Sunday format would be best.

Well over 17,000 attended the show from 61 countries, with 3,700 buyers among the throng, says PMA.


One exhibitor said it cost him close to $50,000 to exhibit and attend at the show with his team, but it was worth to him if he gets just one new customer.

How will trade show attendance sort itself out in 2009? Given the current economic climate, look for even more scrutiny of the costs of attending and exhibiting.

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Still writing


Ksenia Evdokimova, market representative for USA Pears, apples and grapes in Russia, visits with Kevin Moffitt, president of Pear Bureau Northwest, Milwaukie, Ore.

Fueled by caffeine, I continue to work on stories and briefs from the PMA. More introspection will be offered later. It was good to see Ksenia and the Russian delegation of importers at the PMA.

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