Dramatic and hopefully temporary banana supply issues

The Packer's Pamela Riemenschneider has coverage of the banana market in the March 3 issue, and below is a statement from Chiquita she passed along to me about the reasons behind the shorter supply and spiking prices:

CINCINNATI – Feb. 26, 2008 – As widely reported, a series of dramatic adverse weather conditions throughout Central America, as well as prolonged rainfall and major flooding throughout the banana growing areas of Ecuador, have substantially reduced the industry-wide availability of bananas that supply both the North American and European market. Due to these industry-wide conditions, Chiquita Brands International, Inc. is working with its customers to take steps that will enable the company to continue providing fruit in as fair and reasonable manner as possible.
While the company believes these steps are an appropriate response to these dramatic and hopefully temporary supply issues, the devastation within Ecuador has been substantial and it is not possible to assess at this time when industry volumes may recover from this severe shortage. Ecuadorian President Rafael Correa declared a state of emergency on February 20th, and has ordered troops to help thousands of flood evacuees. An estimated 25,000 hectares have been destroyed and up to 80,000 affected, according to the ministry of agriculture. In addition to heavy rainfalls, cloudy and lower than average temperatures are delaying the maturation of fruit by as much as five weeks. Elsewhere, the 2007 tropical storm season caused significant disruption to several banana producing islands in the Caribbean and destroyed thousands of hectares of production across the Dominican Republic. Adverse weather conditions have also led to decreases in productivity in Guatemala, Nicaragua, Honduras and Costa Rica.

What happens if?

If no new farm bill is passed, what then? The USDA has prepared a document at the request of Congressional leaders that looks at the issue. Find it here. From the analysis:

As stated in the USDA analysis, the provisions of the Agricultural Adjustment Act of 1938 and the Agricultural Act of 1949, which have been repeatedly suspended by several farm bills, would again become legally effective if a new farm bill is not enacted or Congress fails to extend the 2002 farm bill by March 15, 2008. Often described as a reversion to "permanent law," such a result would "dramatically narrow the universe of producers who receive support, and would do so in a way that most producers will view as irrational," according to the 14 page paper prepared by USDA and approved by the Office of Management and Budget.

Here is a summary graph on how the lack of a new farm bill would affect trade-related programs.

Congress has mandated that the Secretary permanently carry out certain trade and international development programs. These programs are authorized to receive mandatory funding on a FY basis; these funding authorizations would expire on March 16, 2008.[57] These programs include: export credit guarantees,[58] export credit guarantees for emerging markets,[59] market access,[60] foreign market development cooperator,[61] technical assistance for specialty crops,[62] food for progress,[63] dairy export incentives,[64] and facilities credit guarantees,[65] programs.

Bob Bull passing

Bill Coon passes on news that Bob Bull has passed away. From our archives:

Bull, a former professor at the University of Delaware in the area of food distribution, played a major role in the reorganization of the Produce Packaging Association in 1958. He served on the association's board of directors from 1957-59 and was instrumental in fostering the organization's ties with the University of Delaware. Bull had also operated Food Business Associates, Temple, Maine, consultants to management in food marketing, beginning in 1959.

Here is a reference to Bull in a feature that Paul Campbell did about Bob Carey in 1996:

As destiny would have it, (Carey) answered a routine letter from the University of Delaware Department of Agriculture Economics. He found that he could be paid $2,000 a year and free tuition to earn his master's degree. In return, he was to help professor Robert Bull on marketing projects. Bull happened to be on the board of directors of the PPA at the time.
``Bob Bull was my mentor. I did a lot of work with him on consumer shopping pattern studies and also worked with the American Mushroom Association,'' Carey said. ``My master's thesis was on mushroom marketing.''

Accepting the challenge
After this two-year stint, Carey had accepted a position as extension marketing specialist to help local cantaloupe growers market their product. But in June 1958, he was called into the office of the dean of the School of Agriculture, who had been asked by the PPA board to recommend someone to be executive secretary.

TK: Bob Bull helped hand pick Bob Carey to take over the PPA at a time when the fledgling association was struggling, Under Carey's leadership, the PPA (later renamed the Produce Marketing Association) scaled the mountain to become one of the largest associations of its kind. Bob Bull played an important role in the evolution of PMA and will be missed by his friends and former colleagues.

Onion charts -

Friday Video Feature - Randy Pausch

You may have heard the story of Randy Pausch. This story reports that six months after giving his "last lecture" Pausch, a professor of computer science at Carnegie Mellon University and co-founder of its Entertainment Technology Center, sent an e-mail message to friends and family members saying that he is beating the odds and remains in relatively good health. However, his condition is measured in months and not years, and his inspirational message is as enduring as ever.

Harkin teleconference 2/28

Here is the audio file from a portion of yesterday's teleconference by Sen. Tom Harkin. You can hear what Harkin says about challenging the Administration to respond publicly to budget numbers and offsets. He alludes to the possibility of moving a bill to the President without the White House blessing but with the buy-in of Sen. Chambliss and Rep. Goodlatte.

"This thing has gone on long enough; we've got to pull the trigger here."