China's winter storms - impact on horticulture

You may have seen stories on headline news or the Drudgereport about the winter storm and transportation problems in China, and here is a Jan. 30 report from the USDA FAS about the situation there:

China experienced its worse winter storms in 40 years. The natural disaster took claim of roads, railways and lack of access disrupted supply distribution channels in cities and villages in remote areas. Weather damaged or destroyed crops and transportation delays have resulted in food shortages on store shelves and price increases of over 100 percent in some of the 12 Southern Chinese provinces hit by the storm. The storms paralyzed transportation in highways and railways and with frozen power grids in some parts of Southern China some communities have no access to electricity. According to several media outlets, the damage toll is at $5 billion. Additionally, with more than ½ million travelers stranded in Southern China, local and provincial governments have stepped up disaster relief. Food prices for most goods have witnessed a slight increase with the fruit and vegetable sector expected to react immediately with higher prices. Short grain supplies and animal diseases have driven up food prices over the last year although the federal authorities have implemented specific price controls for staple goods. Consumers expect seasonally inflated prices with Chinese New Year nly a couple of days away.

Citrus While it’s still too early to accurately estimate the impact of the storms on China’s citrus, AgBeijing contacts report that some young citrus trees in Jianxi province died from the cold. The upside is they are not yet fruit bearing trees so it shouldn’t impact yearly production in the short run. Hunan, Hubei, Guangdong, and Chongqing are all being hit by the storm and are anticipating damage to mature orange and mandarin trees. According to contacts, Jianx iis estimating a 10-15 percent decrease in China’s MY 2008/09 citrus production as a result of the storms. Jianxi, Hunan, Hubei, and Guangdong provinces, as well as Chongqing Municipality are China’s major citrus producing areas.

Vegetables The State Council recently held a press conference on agricultural and rural policies. Chen Xiwen, Head of the Central Government’s Leadership Panel on Rural Work addressed the media on the impact of the recent snow disaster in Southern China on grain crops. Many cross winter crops are in Southern China and the impact of the snow on winter crop production is very serious, especially for fresh vegetables. The great concern for winter vegetables is transportation. In Liaoning province, an estimated 500,000 tons of vegetables will rot before they can reach consumers. The same is true in the southern provinces, where most of China’s vegetables are produced.

Tree Fruit and Stone Fruit The recent snow eased the spring drought in most northern provinces. Liaoning, the largest stone fruit producing province located in Northeast China received 36 millimeters of precipitation in Shenyang city, 56 mm in Dalian city, and 78 mm in the worst-hit city of Anshan, providing 6 billion cubic meters of water to the province. The snowfall brought Liaoning province the equivalent to six reservoirs of water “a godsend to the arid farmland,” said Provincial Meteorological Bureau Zhang Lixiang. On the other hand, however, the provincial agricultural department reported the storm destroyed the equivalent of 10,000 hectares of indoor grain, vegetable and fruit and cost Liaoning province at least $12.8 million in losses of revenue.

Poll surge

Have you noticed that the poll on the comparative nutritional value of organic produce versus conventional produce? It started out 9 to zero - organic produce has no better nutrition values than conventional. However, now the poll says 13 to 6, with 6 indicating belief that research will show that organic produce is more nutritious than conventional f/v.

Why the surge for organic? One reason may be I mentioned the poll when I visited The Ethicurean blog. Draw your own conclusions about readership and beliefs...

By the way, here is one story published last fall references a still unpublished study claiming that organic produce is indeed more nutritious than conventional produce. From the story:

Some organic foods, including fruit, vegetables and milk, may be more nutritious than non-organic produce, according to an investigation by British scientists.

Early results from a £12m study showed that organic fruit and vegetables contained up to 40% more antioxidants than non-organic varieties, according to Professor Carlo Leifert at Newcastle University, who leads the EU-funded Quality Low Input Food project.

Larger differences were found in milk, with organic varieties containing more than 60% more antioxidants and healthy fatty acids, he said.

Antioxidant-rich food is often promoted as healthier because in lab tests the compounds neutralise free radicals that are thought to contribute to ageing.

The findings contradict advice from the Food Standards Agency, which maintains there is no scientific evidence to suggest organic food is healthier.

During the four-year project, Prof Leifert's team, which is based at the university's Tesco centre for organic agriculture, reared cattle and grew fruit and vegetables on adjacent organic and non-organic sites across Europe, including a 725-acre farm attached to the university. The full results of the study will be released in full over the next 12 months.

Tesco - Making it in the U.S.

As a retailer, it may be better to be far from Tesco than its near neighbor. That's seem to be the gist of Tesco's Fresh & Easy will challenge Kroger, a story at Talkingretail.com. From the story, based on a Nielsen report:

Tesco's Fresh & Easy chain will threaten Kroger more than other US retailers, a new study by Nielsen has revealed.

The research company's latest Consumer Insight report – Retail Riot – Tesco has arrived in the US: a competitive retailer review – says Kroger stands to lose $6.7m a week to its new rival.

The findings are based on an analysis of the grocery stores near planned Tesco locations in the Los Angeles, Southern California, Phoenix and Las Vegas markets.

But other chains are vulnerable too, says the report.

SuperValu, Safeway, Bashas and Wal-Mart are also represented in those four markets. Nielsen estimates their potential weekly losses at $4.4m, $4.0m, $2.4m and $1.5m.

How close US rivals' stores are to Tesco's Fresh & Easy branches will also impact trade, says Nielsen.

In Arizona, California and Nevada, for example, Kroger has the highest number of stores within a five-mile radius of Tesco locations, followed by Wal-Mart.

The study also shows Tesco has chosen its sites very well. Stores closest to Fresh & Easy locations have been recording the biggest year-on-year sales growth across key categories including alcohol and tobacco, personal and home care, produce, grocery, frozen and chilled, bakery and deli, and meat and seafood.

TK: Further, here is the more detailed source report from Nielsen called Retail Riot – Tesco Has Arrived in the U.S.:A competitive retailer review Lots of talk here about what U.S. supermarket chains are most vulnerable, and the numbers behind those conclusions.





One excerpt:

Three words — follow the customer. Sounds simple, but it is what Tesco credits the secret to their turnaround and continued success. Their store and category performance are benchmarked on five components of the “Tesco Shopping Trip”:

1. The prices are good.
2. I can get what I want.
3. The staff is great.
4. I don’t queue. – (i.e.,I don’t have to wait in line)
5. Shopping is easy and enjoyable.

From the report's conclusion, about what competing retailers should do in response:

For competing retailers and their supplier partners, knowing what to expect is the first important step. Taking action is the next. There are several strategies that can be deployed to protect market share and your consumer base:

• Offer convenience-oriented solutions with an expanded selection of wholesome prepared foods.
• Increase the assortment of natural and organic foods.
• Take advantage of Fresh & Easy’s limited supply of health & beauty and non-food offerings by providing promotional tie-ins that drive larger shopping baskets and frequent trips.
• Create a welcoming environment with a friendly and helpful staff that caters to the unique demographic makeup of the market segment.

The bottom line is that Tesco is successful because they understand their consumers and they give them what they want. It is a lesson well learned!

TK: Everything was great about this report except the exclamation point at the end. Leave the exclamation points to the bloggers!