New wrinkles

Check out the fruit fobs and New York terminal market prices at the bottom of the blog. The idea is to update those prices daily. It wasn't easy to get those prices where they are, I'll tell you that. Let me know if this wrinkle may be worth my time and saves you any of yours.

More on forbidden fruit

I covered the NYT Forbidden Fruit article in this post, and the opinion piece is being circulated with vigor on various blogs. Dan Owens, right in the Blog for Rural America also criticizes the f/v industry with gusto over the planting restriction on program crops.


Overall, this is an example of a classic flaw in market economies. When a firm or industry reaches a certain size, it begins to invest resources in preventing competition instead of furthering innovation. The fruit and vegetable industry is paying big bucks to lobbyists to keep the planting prohibition, thus discouraging competitor entry into their market (discouraging local foods is merely a side effect). The argument that fruits and vegetables "never got anything out of the farm bill" was always hogwash- they ensured almost no Midwesterners would ever compete with them. And now they're arguing for billions of dollars in government support in the next farm bill- but not to compensate for removing the planting prohibition. That's a deal they won't make. They want more money because the flood of fruit and vegetable from other countries has grown immensely since the last farm bill, and shows no sign of slowing down.

TK: Whether or not the planting restriction is in place in the next farm bill is an open question - the White House wants it out because of the WTO - and it is certainly open season on the f/v industry by at least some Midwest farm interests and also local food advocates. I don't recognize the f/v industry in the above paragraph. "Paying big bucks to lobbyists," looking for billions in support," "keeping out competition." I hope no self-respecting corn or cotton farmer getting a couple of hundred thousand dollars a year in government checks ever speaks those words about the f/v industry.

Farm bill "within reach"

It doesn't sound as if Sen. Tom Harkin is having a lot of fun, but he said in this morning's teleconference that he believes a farm bill is within reach as House and Senate negotiators coalesce around the $10 billion figure over baseline in a 10 year bill, not including "internal scrubbing" and "timing shifts" that account for $9 billion more. "There may be some programs that get a little bit less(than the Senate bill)." Here is the audio clip of his opening statement. He said the House and Senate will decide on how much will be assigned to each title of the farm bill, perhaps by later today. There is still no hard news on what offsets and revenue provisions are in play, and he suggested the White House still needs to be more flexible. Harkin said there will be "timing shifts" - read budget gimmicks by the White House - to help make the budget math work. Harkin also said direct payments may be in play for possible cuts. Responding to a question about a Crop Revenue Program, Harkin said he expects the program to be preserved in the final farm bill. Harkin also downplayed the notion that the Senate Finance Committee should have control over the funding it provides to the farm bill. Harkin notes the House still has not appointed conferees for the farm bill, so no public meetings are scheduled yet.

The eyeball test and sustainability

Here is a March 4 report that indicates that British consumers are increasingly turning toward "free range" chickens (sustainable) compared to the "cooped up" kind. From the story:

UK consumers appear to be increasingly buying chicken meat from producers employing higher animal welfare standards, according to a new survey. A recent survey by UK Royal Society for Prevention of Cruelty to Animals (RSPCA) reveals 73 per cent of consumers now buy higher welfare chicken since learning about the conditions in which standard chickens are farmed.
The British Poultry Council (BPC) represents companies involved in breeding and processing poultry. It said in a statement that free range chicken sales are still only 6 per cent of total UK chicken sales but are a growing part of shoppers' buying preferences.
A study earlier this year by researchers at Bristol University warned: "Since the sustainability of intensive broiler production depends on continued consumer acceptance of the farm practices involved, the broiler industry will need to work with the scientific community to…ensure that optimal husbandry and management practices are fully implemented."
The study had concluded that the huge increase in growth rates of broiler chickens (reared for their meat) means that more than a quarter of intensively-reared birds have difficulty walking.

TK: The image of chickens that were unable to walk and being trampled on by thousands of other chickens in a confined facility is too much for consumers to bear, yet those images were shown them in recent coverage of "Supermarket Secrets" - posted earlier on Fresh Talk. A lot of electrons and ink are being devoted to the issue of sustainability in produce - note the Pundit today - yet I don't think the consuming public will be as passionate about "sustainable" broccoli production as sustainable chicken rearing. At the most basic level, the eyeball test of a conventional field of broccoli differs little from a field of organic broccoli. Exploring the nuances of organic/sustainable and respective definitions is probably a worthy exercise, but I don't think consumers have a visceral reaction to the issue. Chickens that can't walk, on the other hand......

Standing private label conventional wisdom on its head

Merchandising its private labels in the context of known brands is obviously a key for Tesco's success in the U.S. Here, Convenience Store Decisions looks at the topic with Jim Hertel, the senior vice president of retail consultant Willard Bishop.

Hertel noted that Tesco’s use of private label brands "turns a lot of conventional wisdom upside down. Many food retailers use two- or three-tier private label strategies to improve price image, blend out category margins, and differentiate to drive shopper loyalty. They will use a consistent approach across categories of private brand offerings and price relationships to national brands. Rarely do private brand priced exceed national brands. Tesco takes a different approach. Fresh & Easy Mac ‘n Cheese is priced 14% above the leading brand, he reports, "and in most fresh categories only private label product is available

TK: Fresh & Easy's focus on private label has even bigger implications for produce/value added produce, since "known brand" produce is less known than Kraft Mac n' Cheese, for example. Anticipating downstream implications of the Tesco approach - limited as it is right now - should keep produce marketers up at night.