Fresh Produce Discussion Blog

Created by The Packer's National Editor Tom Karst

Tuesday, February 5, 2008

Ouch

Don't look at your portfolio now, but the stock market took another huge hit today, Here is the story from Bloomberg.

From Bloomberg:

The S&P 500 lost 44.18, or 3.2 percent, to 1,336.64. The Dow Jones Industrial Average decreased 370.03, or 2.9 percent, to 12,265.13. The Nasdaq Composite Index slipped 73.28, or 3.1 percent, to 2,309.57. Shares also retreated in Asia and Europe. Almost 11 stocks fell for every one that rose on the New York Stock Exchange. Shares also declined on signs the U.S. slowdown is spreading to Europe and Asia. Europe's service industries grew at the slowest pace in more than four years and retail sales dropped the most since 1995, reports showed today. Asian equities fell as Yamaha Motor Corp. said operating profit will slide for the first time in eight years amid falling U.S. demand. Commodities producers fell after the contraction in the services industry prompted crude for March delivery to fall 1.8 percent to $88.41 a barrel. Gold and copper prices also dropped.


TK: Pity Wall Street, but it is not a bad time to be a farmer of grains and oilseeds. The price of wheat is $10.10 per bushel, compared with $4.62 a year ago. Corn is about $5 per bushel, up from about $3.80 at the same time last year. Soybeans are $12.38, compared with $7.02 the same time a year ago.

Labels:

Leafy green comments

One of the agenda items on tap for the Feb. 7-8 meeting of the Fruit and Vegetable Industry Advisory Committee (the first one I'll miss) is looking at comments submitted to the AMS advance notice of rulemaking for a national leafy greens marketing order or agreement. In fact, you can find more than 3,000 comments about the question of possible rulemaking, which had a Dec. 3 deadline. Go to www.regulations.gov and search with the docket number AMS-FV-07-0090 if you want to read more.

Here are couple of instructive comments that show the idea of regulation is far from universally embraced .

I am writing to express my concern about the proposal to establish handling regulations for leafy greens through a marketing order or agreement. (Docket # AMS-FV-07-0090; FV07-962-1 AN). The response to last year?s outbreaks of E coli 0157:H7 linked to spinach and other leafy greens is a critical issue for consumers, but the lack of response by the Food and Drug Administration means that food safety has been left to the industry itself. I believe it is not appropriate to shift food safety standards to the realm of marketing agreements that are enforced by the very industry that is subject to the rules. Food safety is not a marketing issue, safe food is something that all consumers deserve, no matter what brand they buy. The failure of FDA to develop a meaningful regulatory program for produce cannot be wiped away by dumping the problem in the lap of a marketing program at the USDA. Also, it is vital that the experience of using a marketing order on leafy green vegetables in California be considered before proceeding with a national plan. One of the biggest issues identified by producers in California is the fact that the marketing order process does not allow for the needs and farming practices of all of california?s producers. Many organic and small-scale producers are finding the California agreement difficult if not impossible to live with. The
requirements being promoted by some purchasers include extreme measures such as
removing buffer zones and wildlife habitat that fly in the face of organic production methods while ignoring the potential for waste from large scale confined animal feeding operations to affect leafy greens. Rather than relying on a USDA enforced marketing agreement or order, we believe that the FDA must step up and deal with this issue, simply issuing guidance
documents to industry or allowing the biggest firms in the industry to write the rules for everyone is not going to instill confidence in consumers that the food supply is safe. And any standard (whether enforced by FDA, USDA, or by industry through a marketing agreement) that is impossible to achieve on small, diversified farms that grow multiple crops is not acceptable.

sincerely,

N. Abram



And another....

Q. (1) I am opposed to the use of Marketing Orders or Marketing Agreements for food safety purposes. I am particularly opposed to an arrangement where a board of handlers and processors is given government-sanctioned control over farming practices on every farm in the country.
Q. (7) Neither the FDA guidelines nor the California Leafy Green Marketing Agreement (LGMA) metrics are appropriate for most family farms and they are hostile to many organic farming practices. I am concerned that the science needed to make effective rules regarding the spread of pathogens such as E. coli 0157:H7 is inadequate and making blanket rules is premature and costly. There have already been two recalls involving signatories of the LGMA, showing mat their "Good Agricultural Practices" do not solve the problem of E. coli 0157:H7 contamination. The LGMA metrics discriminate against certain types of biological farming and wildlife practices with no scientific justification. I urge you to take biological practices into consideration in any proposed rules, since such things as wetlands and microbial diversity in soil have been found to reduce pathogens.
Q. (8) I believe that the USDA should limit the definition of leafy greens it is seeking to regulate to the high-risk, "fresh-cut" bagged salad products, and not include traditional whole leafy greens. The current definition of leafy greens in the proposed regulations includes produce that has never been implicated in an outbreak such as chard, arugula and kale. The vast majority of growers sell to the whole fresh market and have never been implicated in an outbreak or recall. According to data from fee US Food and Drug Administration, since 1999,98.5 percent of E. coli 0157:H7 illnesses from leafy greens in California have been traced to fresh-cut salad in California. Traditional fresh market growers should not be regulated by rules designed for large-scale suppliers of the fiesh-cut processing industry.
Q.(10) To comply with the California LGMA metrics would cost farmers tens of thousands of dollars. The water testing requirements are particularly onerous and excessive in many watersheds where pathogens are not widespread. Large growers have the personnel and resources to comply with such requirements and smaller family farms do not If the USDA implements such rules for all leafy greens growers, it will drive many small and organic farms out of the leafy greens market and destroy the local food systems that the agency has been encouraging across the country. Thank you for your consideration.

Sincerely,

L. McGrath
Family Farm Food Safety Council

Labels: , , , , ,

Election Watch

It is Super Tuesday, and I have a link from this site to a great election-watching Web resource, Election 2008.

Here are the latest tidbits from the site:

Barring very unforeseen developments, the Democratic race will go on well beyond today and if Mitt Romney can pull off an upset in California, it might go on for the Republicans, too. The rules are a bit complicated since in some states it is winner-take-all statewide, in others it is winner-take-all per congressional district, and in still others it is strictly proportional to the vote. In most cases, the PLEOs, superdelegates, unpledged delegates, etc. are allocated by yet other rules.

So, what's going on? Obama is definitely surging everywhere, but whether this will be enough to overcome Clinton's lead remains to be seen. Romney is also moving up in California, but it might be too little too late. Here are some things to watch for. First, California is the big enchilada. The GOP primary is winner-take-all per congressional district. A big win here and someone is on the road to the nomination. The Democratic primary is proportional by congressional district. It is likely that the number of delegates won by Clinton and Obama will be close, but the psychological factor of "winning California" is huge.

Missouri is another state to watch. It is a genuine bellwether, picking the winner in nearly every presidential election since WWII. Also important is the turnout there. If one party has a massive turnout and the other does not, that says something about what might happen in November. Sen. Claire McCaskill (D-MO) has been campaigning her heart out for Obama this week, which may help him with women there.

Watch the South. Voters go to the polls in Alabama, Georgia, Tennessee and Arkansas today. How do Obama and Clinton play there? Obama will probably get most of the black vote in those states. The South is also of critical important to the Republicans--it is their base. Watch McCain's percentage there. If he can barely muster 35% in the South, that doesn't bode well for November if he is the nominee. Many southern conservatives may stay home on election day. Actually, McCain has achieved a lifetime rating of 82% from the American Conservative Union (vs. an 8% rating for Obama and a 9% rating for Clinton). But some people accept nothing less than perfection.

Labels: , ,

Side by Side

Here is the link to the Senate Agriculture Committee Web site that provides "side by side" comparison of the House version and Senate versions of the farm bill, along with references to existing law. Meanwhile, the Senate has named members of farm bill conference from that chamber, with the good news for specialty crop growers that Sen. Debbie Stabenow of Michigan is among their number. From a Senate Ag Committee news release:

Senators Tom Harkin (D-IA) and Saxby Chambliss (R-GA), the Chairman and Ranking Member respectively of the Senate Committee on Agriculture, Nutrition and Forestry, announced this evening the names of the Senators who will join the conference committee tasked with merging the Senate farm bill with the House of Representatives’ version. Senator Harkin will chair the conference committee.

“This group of Senators represents diversity in terms of geography, leadership posts and expertise. I know that we will work well together and meld together a farm bill that fits our country’s needs,” said Chairman Harkin. “I look forward to working with Chairman of the House Agriculture Committee, Colin Peterson as well as the new Agriculture Secretary Ed Schafer in reaching our goals of a farm bill that makes important investments in conservation, renewable energy, nutrition and rural development.” “I am pleased to join Sen. Harkin in naming the Senators that will serve on the conference committee to complete the farm bill,” said Ranking Member Chambliss. “Our farmers and ranchers are in the midst of making important planting decisions and we must complete this bill as soon as possible.” The list of Democratic Senators selected for the conference committee: Chairman of the Senate Finance Committee, Max Baucus (D-MT); Chairman of the Senate Budget Committee, Kent Conrad (D-ND); Chairman of the Senate Judiciary Committee, Patrick Leahy (D-VT); Senate Agriculture Committee Member Senator Blanche Lincoln (D-AR) and Senate Agriculture Committee Member Senator Debbie Stabenow (D-MI). The list of the Republican Senators selected for the conference committee in addition to Ranking Member Saxby Chambliss (R-GA) are: Former Senate Agriculture Committee Chairman Richard Lugar (R-IN), Ranking Member of the Senate Finance Committee, Charles Grassley (R-IA); Ranking Member Senate Appropriations Committee, Thad Cochran (R-MS); and Senator Pat Roberts (R-KS).

Labels: , , , , ,

Just kidding

That's the shorthand version of the response of a Mississippi lawmaker who proposed that restaurants should not serve obese patrons. Here is the story that describes how the lawmaker only wanted to draw attention to the obesity problem. From the piece published by AHN Media:

A proposed bill that prohibited restaurants from serving obese people was merely an attempt to raise awareness of the obesity problem, explained its author.

House Bill 282, which was announced as scheduled to be vetoed in a subcommittee hearing, was only something that was meant to draw attention to the health concerns of the city, said Rep. John Read (R-Gautier). "Anybody with a sense knows it's not going to happen, not going to pass," said Read, according to the UPI.He then continued that Mississippi had been tagged as the most obese state in the country, and the bill's proposition was meant to draw concern and attention towards the problem. "With all the attention paid to tobacco problems, this was to shed some light on another major problem," Read said. "This has been at least getting the dialogue going." Read insisted that the bill was not meant to anger or hurt anybody's feelings.

TK: Considering that the state does have one of the higher rates of obesity in the U.S., Read is taking a real political risk in this crazy bill. But at least he is getting the discussion going, right?



Labels: ,

Global Food Safety Initiative

When a sentence starts with "Wal-Mart has become the first nationwide U.S. grocery chain to require suppliers," that clearly implies it may not be the last. And the phraseology seems to suggest a kind of one-upmanship for food safety.Yet if this standard will reduce the number and cost of third party inspections, suppliers will be all for it. I have my doubts...
In any case, here is the release from Wal-Mart:


BENTONVILLE, Ark., Feb. 4 /PRNewswire-FirstCall/ -- Wal-Mart Stores, Inc. has become the first nationwide U.S. grocery chain to require suppliers of its private label and other food products such as produce, meat, fish, poultry and ready-to-eat foods to have their factories certified against one of the internationally recognized Global Food Safety Initiative (GFSI) standards.

A group of major international retailers committed to strengthening consumer confidence in the food they purchase, the GFSI now lists Wal-Mart among the companies who have agreed to improve food safety through a higher and consistent auditing standard.

Selected by CIES (http://www.ciesnet.com/), the Food Business Forum, to safeguard and ensure high quality in the international food supply chain, GFSI standards provide real time details on where suppliers fall short in food safety on a plant-by-plant basis, and go beyond the current FDA or USDA required audit process. Under the GFSI program, producers of Wal-Mart and Sam's Club private label and other foods sold in the U.S. must be audited by independently trained, approved and licensed auditors who are experts in their industry.

"The requirement for suppliers to complete these certifications demonstrates our leadership in food safety and our commitment to global safety standards," said J.P. Suarez, Wal-Mart's senior vice president and chief compliance officer, and a board member of the Global Food Safety Initiative. "Food safety has always been a top priority at Wal-Mart. We are taking this additional step to ensure the integrity of our products throughout the entire food supply chain. We encourage other U.S. retailers to follow our lead and to also endorse these standards."

The GFSI requires food suppliers to achieve factory audit certification against one of its recognized standards, which include Safe Quality Food (SQF), British Retail Consortium (BRC), International Food Standard (IFS), or an equivalent such as Global-GAP. Wal-Mart has published a schedule to suppliers requiring completion of initial certification between July and December of 2008, with full certification required by July 2009. Audits will be completed by approved third party auditing companies.

Wal-Mart private label food brands in the U.S. are Great Value and Sam's Choice. Sam's Club private label food brands in the U.S. include Member's Mark and Bakers & Chefs.

"Our customers expect high quality at every day low prices when they purchase any of our private label foods, and we're committed to meeting -- and exceeding -- their expectations," said Andrea Thomas, Wal-Mart's senior vice president, private brands. "The GFSI standards are an added step that will help us -- and our U.S. food producers -- keep our quality commitment."

Internationally, Wal-Mart stores in the United Kingdom (ASDA) and Japan (Seiyu) also require suppliers of food products to comply with GFSI standards.

The Global Food Safety Initiative was launched in May 2000 to establish food safety management systems to ensure confidence in the delivery of safe food to consumers. The initiative has fostered a convergence among food safety standards, achieved cost efficiencies through common acceptance of GFSI recognized standards, and provided a forum for exchange of best food safety practices.

Labels: , ,

Wal-Mart's brand equity

I see that Wal-Mart is reorganizing its apparel unit, with jobs moving out of Bentonville and into New York City. From the CNN story:

Apparel has been a weak spot for Wal-Mart since a 2005 push for higher fashion, including skinny jeans, failed to sell. Executives say the retailer is now focusing on what it calls 'key items', or more basic clothing staples like tanktops or shorts, with fewer styles but a wider range of colors and low prices.

It is also pushing for more license deals with popular brands.


TK: There is also speculation that Wal-Mart may seek to buy brand equity by purchasing Jordache or other labels. Does this have any implications for produce? Will Wal-Mart continue to trade on the produce brand equity of Dole, Del Monte, Chiquita and others the produce department or will it mimic the multi-tiered private label approach of Tesco? Or is the idea of brand marketing in the produce department irrelevant to the world's largest retailer - and more importantly - to its consumers?. I have a feeling Wal-Mart will need to rethink its brand image in perishables as it seeks to roll out smaller format stores to compete with Tesco's Fresh & Easy format.

Labels: , , ,

Chilean grapes bust a move

Consumers who have been waiting on winter grapes to get reasonable don't have to wait any longer. Many retailers are featuring grapes at sub-$2 per pound, and the reason is evident in the f.o.b. chart below.



Chile Flame Seedless Imports Jan. 7 to Feb. 1 - http://sheet.zoho.com

Labels: ,