Wal Mart direct sourcing in Mexico

Grower groups claim that Wal-Mart's direct sourcing campaign in Mexico hasn't met their expectations in this press summary from a USDA FAS report. From the summary/translation:

Selling directly to Wal-Mart was a project that agricultural workers affiliated to the National Agricultural Workers’ Confederation (CNC) began two years ago, but according to them, the program has failed and they are forced to sell once more to the intermediaries, widening the price gap between producers and consumers. According to CNC, producers cannot meet the volume requirements and Wal-Mart delays payments up to eight months, something the average producer cannot handle. Meanwhile, Wal-Mart only commented that they keep a strong strategic relationship with CNC, and confirmed that 96% of its fresh produce supply comes from Mexican growers. (REFORMA, JAN. 29)

Also in the report, continuing accounts of Mexican grower unhappiness with NAFTA.

Rural and worker organizations deemed ‘successful’ the day of mobilizations around the country that culminated with a meeting in the main square of Mexico City (the “Zocalo”). They wrapped up with a pact to press the GOM for an immediate renegotiation of the agricultural chapter of the North America Free Trade Agreement (NAFTA) in defense of food sovereignty and against energy reform. Before thousands of people that arrived at the “Zocalo”, leaders such as Cruz Lopez, of the National Farmers Confederation (CNC); Max Correa, of the Cardenista Rural Union (CCC); Artemio Ortiz, of the National Coordinator of Education Workers (CNTE), and Martin Ortiz, of the Mexican Union of Electricians (SME), pointed out that they will strengthen unity to promote a change in the economic and social policies of the country. According to organizers there were more than 200 thousand demonstrators that arrived to the Zocalo, where they insisted upon the Secretary of Agriculture’s resignation.

TK: Can you imagine 200,000 farmers in Washington, D.C. demanding the resignation of the Agriculture Secretary? Grower unrest in Mexico far transcends the level of farmer discontent in the U.S. at this moment in time. While the U.S. and Mexican sugar industries have proposed an agreement to "manage" the sugar and sweetner markets, some observers worry that could open the door to more tinkering with other aspects of commodity trade with Mexico.

The view from here

Sitting here in the Rachmaninov Antique Hotel lobby in St. Petersburg at some midnight hour, I'm enjoying a strong wireless connection (Excellent, 54.0 Mbps) compared with the wireless connection in room no. 10 (very low, 1.0 Mbps). Visited with a couple more importers today and tomorrow get a tour of the wholesale market in St. Petersburg before flying to Moscow. This will take a while to process all that I've seen and heard, but it is beyond doubt that a growing middle class (average income reportedly rose 25% last year, one importer said), expanding retail trade and plans to eventually boost container capacity will allow this market to grow. I heard one American trader here in St. Petersburg relate tonight that he was visiting with some area wholesalers who don't like to deal with some retailers reportedly because of extremely slow payment terms (months, not weeks). So clearly, the market is not without risks, but full of potential too. It would have been great to spend a few hours in the Hermitage, but not this trip. Missing Kansas and family big time, but the people of Russia are gracious hosts.

USDA long term projections to 2017

In advance of the USDA Agricultural Outlook Forum, the agency has released its long term projections for U.S. agriculture. Find the 100 plus page pdf here.
The report is heavily focused on grains, oilseeds and livestock, but here are some horticultural projections from the USDA.

U.S. imports of horticultural products (fruit and nuts, vegetables, greenhouse and nursery products, essential oils, beer, and wine) are projected to continue outpacing exports, with net imports expected to increase about $12 billion from 2007 to 2017. The appreciation of the U.S. dollar after 2011 is an important factor affecting trade, slowing export demand for U.S. horticultural products and raising U.S. import demand.
• U.S. horticultural imports are expected to grow by about 4 percent annually through 2017. Imports play an important role in domestic supply during the winter and, increasingly, during other times of the year. Reduced trade barriers offer U.S. consumers increased variety, with freer trade also enhancing global competition.
• The EU is the top source of U.S. horticultural imports, accounting for $9 billion out of a total $32.4 billion in 2007. Mexico is the second biggest source of U.S. horticultural imports ($7.4 billion in 2007) followed by Canada ($3.5 billion). Chile and Brazil are also large sources of horticultural product imports by the United States. Key import commodities include potatoes, tomatoes, bananas, grapes, frozen concentrated orange juice, apple juice, melons, tree nuts (especially cashews), wine, beer, and essential oils.
• U.S. horticultural exports are expected to grow by 3 percent a year through 2017, with the major export markets including Canada, the EU, Mexico, Japan, and Southeast Asia. Exports of almonds, other tree nuts, and noncitrus fruits will lead export growth of fruit and nuts. Exports of fresh vegetables will be stronger than processed vegetables. Exports of wine and essential oils are also expected to increase.

FVIAC

As I mentioned earlier, I missed the Feb. 7-8 fruit and vegetable industry advisory committee meeting, so I'm anxious to read David Mitchell's coverage in the upcoming issue of The Packer. Here is the "just the facts" version that USDA has released about the committee's recommendations.
From the USDA:

Fruit and Vegetable Industry Advisory Committee
Capital Hilton, 1001-16th Street NW, Washington, D.C.
February 7-8, 2008

Recommendation: The Fruit and Vegetable Industry Advisory Committee recommends that USDA make marketing agreements and marketing orders available to industries to facilitate national adoption and compliance with food safety standards, such as Good Agricultural Practices (GAPs), Good Handling Practices (GHPs) and Good Manufacturing Practices (GMPs).

Additional Actions: The Committee also formed working groups to investigate issues and bring findings back to the full group for consideration. These working groups will deal with matters related to food safety and traceability, child nutrition and WIC Reauthorization, produce transportation, agriculture labor, and AMS� Market News and fresh fruit and vegetable inspection programs.

TK: Also find this link to the presentations presented at the committee meeting. This is the 34-page pdf presentation "The State of U.S. Transportation: Implications for the U.S Fruit &Vegetable Industries" by Bruce Blanton Transportation and Marketing Program. This presentation includes a staggering series of visuals about future truck congestion on U.S. highways. Here are Blanton's conclusions:

* F&V production, exports and imports are projected to increase steadily into 2017
* All modes are currently close if not at capacity
* Without changes, congestion is expected to worsen and cause increasing problems into 2035
* National & global influences greater than F&V industry are at play and will influence infrastructure decisions
* There is no shortage of regulatory issues facing trucks; there can be spillover issues for transporting F&Vs
* Increasing challenges require greater communication and collaboration for creative solutions (e.g. shippers & carriers, between modes, etc.)

FSLC and GFSI

One reader comments in a previous post today, and I'll highlight it here as well because I can't provide the answer to his question. As I found in my last story on Wal-Mart's and GFSI, getting a spokesman for Wal-Mart is never as easy as picking up the phone and dialing Bentonville. In any case, perhaps others can provide some illumination to this question:


"Can someone please explain the difference or similarity between the recent Wal-Mart news on GFSI and the FSLC? Are they still adopting FSLC? Haven't heard much about those standards. "