National Retail Report - April 18

I had a good conversation with the USDA's Market News Service Terry Long while I was in DC. He said some interesting things about the market news portal, the retail report and more (I never knew Boston was the most popular wholesale market report). Anyway, he said at some point they will be able to provide year ago statistics for the retail report. Then we can really see how flexible and creative retail produce promotions are - or, as some suppliers like to say, whether retailers simply copy the same promotions they did the same time a year ago.
Here is the summary from the April 18 USDA retail report:

Seasonal and Organic Items Highlighted
There was a lack of a common overall theme this week among retailers. Several were promoting the beginning of Passover and featured packaged mixes, horseradish, dates, and walnuts. There were also several ads promoting natural and organic selections in honor of upcoming Earth Day celebrations. Still others, were celebrating Spring and the return of warmer weather and chose to promote items for outdoor grilling and picnics. Compared to last week, overall fresh produce ads this week were down close to 2 percent with decline of nearly 11 percent on fruit ads and an increase of over 7 percent on vegetable ads. Despite the declining ad activity of fruits, the top 5 items were predominantly fruits and included: grapes, strawberries, tomatoes on the vine, corn, and mangoes. Significant increases in activity were noted on pineapples, watermelons, corn, mushrooms, onions, and tomatoes on the vine.


Fruits as Percentage of Total Fruit Ads
April 18, 2008
Watermelon, seedless 4%
Watermelon, mini 3%
Strawberries, organic 6%
Strawberries 15%
Pineapple 8%
Pears, bartlett 6%
Oranges, navel 3%
Mangoes 9%
Limes 1%
Lemons 1%
Honeydew 3%
Apples, red delicious 5%
Bananas 0%
Bananas, organic 0%
Avocadoes, hass 9%
Blueberries 2%
Cantaloupe 7%
Grapefruit, red 3%
Grapes, green/red 15%


Vegetables as Percentage of Total Vegetable Ads April 18, 2008
Tomatoes, grape 5%
Tomatoes on the vine 10%
Tomatoes, organic 0%
Tomatoes, grape organic 2%
Tomatoes 2%
Asparagus 5%
Broccoli 2%
Beans, round green 5%
Sweet Potatoes 1%
Squash, zucchini 6%
Potatoes, russet 3%
Peppers, bell red 4%
Peppers, bell green 7%
Onions, sweet 7%
Onions, yellow 3%
Broccoli, organic 1%
Cabbage 1%
Carrots, baby 7%
Carrots, baby organic 4%
Lettuce, romaine 1%
Mushrooms, white 8%
Lettuce, iceberg 2%
Cucumbers 4%
Corn 8%
Celery 2%

KORUS FTA back in play

Will the opening of the South Korea market for U.S. beef spur prospects for the U.S. - Korean free trade deal? That's certainly the wish of the Administration, and such an outcome could be a big boost to U.S. fruit exporters as well. Here is the statement from Agriculture Ed Schafer:

Today's announcement that South Korea has fully complied with international trade standards regarding beef and beef products is great news for America's ranchers and beef industry. By allowing complete market access for U.S. beef and beef products from cattle of all ages, South Korea has made a decision that is based on science and in line with international guidelines. As a result of a constructive and steady dialogue, Korean consumers will again have access to safe, affordable, high-quality beef at a time when global commodity prices are tightening.

"In May 2007, the World Organization for Animal Health (OIE) formally classified the United States as a controlled risk country for BSE. This status confirmed that U.S. BSE regulatory controls are effective and that U.S. beef and beef products of all ages can be safely traded. Before the Korean market was closed to U.S. beef and beef products in December 2003, following the detection of a case of BSE in the state of Washington, Korea was the third largest export market for U.S. beef and beef products, with annual sales more than $815 million. Since that time, Korea's economy has grown and more of its population enjoys increased incomes and a better way of life. That is why Congress's immediate consideration of the United States-Korea Free Trade Agreement (KORUS FTA) is important. Once the KORUS FTA is ratified and implemented, and the current 40 percent tariffs on U.S. beef are fully lifted, the FTA is expected to generate tariff savings of approximately $500 million a year for U.S beef exporters. The International Trade Commission estimates that under the FTA, U.S. beef exports to South Korea could increase by $600 million to $1.8 billion.

"South Korea has raised the bar for other Asian nations, such as Japan, Taiwan and China, and the United States will continue to press for full market access throughout the rest of the Pacific Rim so that unreasonable restrictions on U.S. beef and beef products are fully removed."

Food safety legislation - is it doable this year?

Some lobbyists on Capitol Hill think time is already slipping away for any substantial FDA reform packages to gain any traction. Yet the discussion is heating up. Here is an April 18 press release from the GMA panning one proposal:

The Grocery Manufacturers Association (GMA) today issued the following statement from GMA Senior Vice President and Chief Science & Regulatory Affairs Officer Bob Brackett regarding release by House Committee on Energy and Commerce Chairman John D. Dingell of a Discussion Draft of the Food and Drug Administration Globalization Act of 2008. The Draft builds on proposals by Chairman Dingell and Representatives Pallone, Stupak and DeGette.

“Food safety is the number one priority for the food and beverage industry and we are committed to working with Congress to pass common-sense, realistic, effective reforms to our nation’s food safety system within this year,” said Brackett. “That said, the Food and Drug Administration Globalization Act of 2008 as drafted for discussion creates unnecessary regulatory burdens, over-broad enforcement power, and would likely result in a further increase in food prices.

“The user fees proposed in the draft are unfair food taxes imposed on food manufacturers that will only work to arbitrarily increase the cost of food for consumers at the worst time possible – when thousands of Americans are already struggling to hold on to their homes and pay their already skyrocketing grocery bills. New rigid, regulatory provisions in the draft will stifle industry innovation, and broad new enforcement powers are unnecessary, burdensome and will be untenably costly for the FDA. We are supportive of reforms that will truly result in safer foods for our consumers, but think there are better, more efficient and effective ways to accomplish this goal than those outlined in this draft bill.

“It is critical that realistic, effective legislation be passed within this year that results in a true partnership between Congress, the food industry and federal agencies working in tandem to improve, modernize and strengthen our nation’s food safety system,” concluded Brackett. “GMA and its member companies are committed to achieving this goal.”

Getting closer

I'm sorry I couldn't stay in Washington until the farm bill deal is done, but I need to get home by May. But, as I write this in Reagan National Airport, Sen. Harkin says the House and Senate are "getting closer." We'll take him at his word...

Senate farm bill conferees led by Senator Tom Harkin (D-IA), the Chairmen of the Senate Committee on Agriculture, Nutrition and Forestry and the Senate-House conference committee on the farm bill, today presented to House conferees a farm bill proposal of $10 billion in additional spending for the farm bill, including funds for disaster assistance. The framework maintains the investments of the Senate-passed bill with strong farm income protection as well as investments in nutrition, conservation and renewable energy and a program to provide disaster assistance to farmers. The proposal is deficit neutral and includes tax package that has been a priority for Senate conferees. A formal conference will reconvene next week to further discuss the proposal.
“The clock is ticking to complete a new farm bill and with just one week to go before the extension expires, we must reach agreement,” said Harkin. “The Senate has now presented two good offers to the House that strengthen farm income and disaster protection and fill in gaps in nutrition assistance, invest in farm-based renewable energy, help farmers and ranchers conserve our natural resources, and devote substantial new funding to initiatives for growers of fruits, vegetables and horticultural crops. We are getting closer, but we still do not have agreement.
“Staff will continue to negotiate over the weekend and I have every hope that resolution will be reached. If not, as Chairman of this Conference, I intend to start calling for formal votes of the conference committee next week. It’s time to finish this bill, so I urge House conferees to consider this framework and negotiate in good faith so that we can meet our impending deadline.”
Details of today’s proposal are available at http://agriculture.senate.gov/.

Senate counter offer

Sen. Harkin leads off today's farm bill conference with a counter offer to the House; $10 billion package he said is basically agreed to (if offsets can be found) and $2.4 billion additional in another package.

House Agriculture Chairman Collin Peterson said there is significant progress (what the White House is looking for) but finding the offsets is still a problem.

Still some distance to go on a final deal....but enough for another week of deal making?

On again

From the office of Sen. Tom Harkin:


Senator Tom Harkin (D-IA), Chairman of the Senate-House Conference Committee on the farm bill, today announced a meeting for all Senate and House farm bill conferees. The conference committee is scheduled for Friday, April 18, 2008, at 11:00 AM in room 216 of the Hart Senate Office Building.

Average Prices Bureau of Labor Stats

I'll be filling this space up with a few charts of the latest CPI average price data. Notice the surge in prices for bananas and apples this year.

Thumbs up for Tesco

Fresh Talk readers believe that Tesco's Fresh & Easy format will defy its critics and eventually become a success in the U.S. Our poll this week asked:

Will Tesco's Fresh & Easy format be an eventual success in the U.S.?

The answers were:

Will Tesco's Fresh & Easy format be an eventual success in the U.S.?

	14 (45%)
Yes	14 (45%)
No	9 (29%)
Too early to say	8 (25%)

So you heard it here first. Meanwhile, here is a blog post from the "Talking Fresh & Easy blog that speaks to the concept of self service checkouts and customer service.