Leaving Kansas City and other Wal-Mart news

Wal-Mart is pulling its managers' meeting out of Kansas City in favor of Orlando. The next thing you know, KC will lose its NBA franchise...Oh yeah, we don't have an NBA (or NHL) franchise. Another indignity to bear.


Wal-Mart moves meeting from KC to Orlando

Wal-Mart to offer more South Carolina produce

After being overhyped, RFID starts to deliver (WSJ preview)

Why Wal-Mart may be good for small business

August hearing set for former Wal-Mart executive


Halffords poaches Wal-Mart man David Wild, who had been charged with seeing off Tesco as head of Wal-Mart’s new format team in northern California, is quitting the retailer to take the top job at Halfords. A former Tesco executive, he will take up the post at the car maintenance and bicycles chain in early August.


Wal-Mart sourcing produce from local farmers (Arkansas) Wal-Mart is working with farmers to incorporate more local sourcing into its produce assortment, Jack Sinclair, executive vice president for grocery merchandise, said Thursday.
Sinclair pointed to a selection of Healthy Harvest Blueberries sourced from Interstate Express Logistics, a Fayetteville-based company, during a media tour of Wal-Mart's Pleasant Grove store in Rogers.
"Local sourcing will be a new focus for us," Sinclair said.

CDC June 24 update - 652, 34 states, DC; April 10 to June 13 onset

The CDC update can be found here. From the CDC:

Since April, 652 persons infected with Salmonella Saintpaul with the same genetic fingerprint have been identified in 34 states and the District of Columbia. These were identified because clinical laboratories in all states send Salmonella strains from ill persons to their State public health laboratory for characterization. The increase in reported ill persons since the last update is not thought to be due to a large number of new infections. The number of reported ill persons increased mainly because some states improved surveillance for Salmonella in response to this outbreak and because laboratory identification of many previously submitted strains was completed. In particular, one new state, Nevada reported ill persons.


Other headlines found on the issue:

Which tomatoes are safe to eat and which are not?

Locally grown tomatoes are safe to eat, officials say

Tomato scare hurts farmers


TK: David Mitchell of The Packer tells me that no FDA briefing is scheduled today but one may be on tap for tomorrow. It is past time for FDA to pinpoint the problem; perhaps tomorrow is the day.

Preemptive strike on pests

Is it blatant protectionism or right-thinking trade policy? I tend toward the former conclusion, but it is a novel concept: tax imports of fruits and vegetables based on a calculation of what economic harm may result to the domestic industry if a non indigenous species of pest hitches along with the produce. This 24-page USDA ERS report looks at the issue with a title: "Policy and Risk Processes of Trade-Related Biological Invasions." Here are some questions the report attempts to address:

From the report:

Of course a tariff is not the only pre-invasion policy instrument available – port inspections have been widely used for years to weed out infected shipments. One might expect the optimal tariff to depend on inspections intensity, and vice versa. To what degree are inspections and tariffs complementary or substitutable?

Later....

In what cases can import tariffs, imposed to control damage from NIS, backfire such that damage actually increases? When does freer trade (reduced tariffs) actually lead to less NIS damage?

Later.....

What is the optimal mix of tariffs and inspection intensity which balances minimizing NIS damage with maximizing consumer surplus from imported goods? Under what circumstance does optimal inspection intensity fall as the infectiousness of the goods increases?


TK: Will we see a time when the U.S. imposes a higher tariff on produce from country x than f/v from country y based on the relative risk of pests? Probably not, but the concept gets a complete airing in this report. Here is the summary list of findings.

Summary points:
• Increasing trade tariffs to control introductions can lead to increased damages in certain cases, for example, when increasing land under cultivation increases exposure to NIS damage.
• Levels of crop and ecological damage can move in opposite directions due to changes in trade policy (tariff).
• Crop damage alone can be a poor proxy for the severity of the NIS problem since, in isolation, it may mispredict the sign of change in damage from a particular policy.
• When both tariffs and monitoring are available to regulators, the optimal monitoring intensity may be, after a point, decreasing in the infection rate until, at some limit, no monitoring is desired.
• If an importer is allowed to discriminate amongst heterogeneous trading partners with its tariff, then it can use this instrument to select its optimal trading partner. However, if the importer is constrained by trading agreements, such that only its monitoring intensity may be partner specific, it must choose either a suboptimal trading partner or suboptimal instrument levels.
• In some (but not all) cases, we find evidence that the marginal invasion rate per unit of imports falls as trade history with a region accumulates. However, this attenuation is counteracted by a worsening invasion rate over time, which may serve as a proxy for technological changes in shipping and ecosystem vulnerability.
• There are significant differences in the current marginal invasion rate over imports across trading regions. Because variation also exists in how the marginal invasion rate changes over cumulative trade volume, historic invasions from a particular trading partner are an unreliable proxy for future risk.
• Simple volume restrictions on imports to reduce NIS introductions are not advisable based on coarse cost-benefit calculations.

Have rates topped out? Truck Rate Report - June 25

We see a slight softening in truck rates reported for the week ending June 24. From the USDA National Truck Rate Report, a summary of the market:

A slight surplus of trucks was reported for the following commodities and regions: citrus and avocadoes from South District California. A shortage of trucks was reported for the following commodities and regions: melons from Florida, Georgia and South Carolina, sweet potatoes from Eastern North Carolina and onions fromSouthern New Mexico. A slight shortage of trucks was reported for the following commodities and regions: carrots and potatoes from Kern District California, mixed vegetables and strawberries from Santa Maria California, potatoes from San Luis Valley Colorado, Upper Valley Twin Falls-Burley District Idaho and Columbia Basin Washington. LAST REPORT was issued for peppers from Imperial, Palo Verde and Coachella Valleys, California and Central and Western Arizona, cherries from Stockton-Lodi-Linden District, California, melons from Florida, mixed vegetables from South Georgia, apples from Hudson Valley New York. FIRST REPORT was issued for melons from South Carolina. All other districtsreported an adequate supply of trucks.

U.S. slipping in Canada?

Here is a quick rundown of what is new from USDA FAS attache posts. You might pay particular attention to the report about competition for U.S. horticultural exports to Canada, as it drills into market share for fruits and vegetables:

South Africa apples, pears and grapes: Sum-up: South Africa's 2008/09 apple production is expected to fall slightly to 700,000 MT due to decreased productivity of older orchards. Pear and grape production is forecast to increase slightly to 346,000 MT and 266,000 MT, respectively.

South African citrus: Sum-up: According to the CEO of CGA, long-term production of citrus will decline despite current excellent international prices. Last year’s high export prices are expected to continue, especially for products destined for the EU and Russia because of lower production in competitor citrus producing countries. The Rand depreciation increases farmer returns for exports, although increasing input costs (transport, energy, and fertilizers) continue to off-set the total profit.


China and Mexico challenge U.S. horticultural exports to Canada Sum-up: The U.S. market share peaked at about 65% in the early 2000s and currently, Canadian purchases of U.S. agricultural products account for about 60% of total Canadian agricultural imports. Changing diets linked to immigration patterns, broader, year ‘round product offerings by Canadian grocery retailers, changes in ingredient sourcing by Canadian food manufacturing seeking cheaper inputs and increasing competition from global suppliers present challenges for U.S. food exporters to Canada. In recent years, other foreign suppliers, notably China and Mexico, have increased their agricultural exports to Canada especially in the fresh and processed horticultural products sector.

Food choice more important than food miles

Get used to hearing more and more about the "carbon footprint" of consumer products in coming years. Much of the focus will be toward elevating locally grown food as a way to reduce environmental impacts, but a recent study indicates that consumer choice of food types- whether plant-based, dairy or meat - has a much greater impact on greenhouse gas emissions than factors such as "food miles." The implications are obviously positive for commercial fruit and vegetable marketers. Here is an abstract for the research called "Food-Miles and the Relative Climate Impacts of Food Choices in the United States", by Christopher Weber and H. Scott Matthews.



Despite significant recent public concern and media attention to the environmental impacts of food, few studies in the United States have systematically compared the life-cycle greenhouse gas (GHG) emissions associated with food production against long-distance distribution, aka “food-miles.” We find that although food is transported long distances in general (1640 km delivery and 6760 km life-cycle supply chain on average) the GHG emissions associated with food are dominated by the production phase, contributing 83% of the average U.S. household’s 8.1 t CO₂e/yr footprint for food consumption. Transportation as a whole represents only 11% of life-cycle GHG emissions, and final delivery from producer to retail contributes only 4%. Different food groups exhibit a large range in GHG-intensity; on average, red meat is around 150% more GHG-intensive than chicken or fish. Thus, we suggest that dietary shift can be a more effective means of lowering an average household’s food-related climate footprint than “buying local.” Shifting less than one day per week’s worth of calories from red meat and dairy products to chicken, fish, eggs, or a vegetable-based diet achieves more GHG reduction than buying all locally sourced food.


TK: Check out this thoughtful post at the Ethicurean blog for more analysis and reaction from local food fans.

Farm Bureau: Crop damage at $8 billion

Midwest growers have suffered billions in losses from floodwaters. Here is a release from the American Farm Bureau estimating the national impact so far:

Crops have incurred more than $8 billion in estimated weather-related damage thus far in 2008, according to American Farm Bureau Federation’s June Market Update. Iowa accounts for approximately half the damage. However, there are notable problems in at least a dozen other states ranging from the excessive wetness and flooding in Illinois to drought in California.

“Wet weather and flooding create issues, as farmers are unable to plant their crops,” said Terry Francl, AFBF senior economist. “The crops they do plant do not sprout and grow, resulting in fewer acres harvested. Additionally, the difficult growing conditions greatly reduce the yield of the crop that is harvested.” He adds that expected Iowa corn yields are reduced 16 percent for this year, and 1.5 million to 2 million acres of corn and soybeans in Iowa that farmers intended to plant this spring will likely remain fallow.

This results in a $4 billion shot to Iowa’s crops. Other states taking a hit from excessive wetness and flooding are: Illinois, $1.3 billion; Missouri, $900 million; Indiana, $500 million; Nebraska $500 million; and an additional $1 billion in remaining wet states.

Some areas are experiencing the opposite problem. Drought is taking a toll on several western states and a few states in the southeast. Northern California battled the driest spring in its history. As a whole, the state suffered $500 million in estimated damage. This equals the estimated drought-related damage in all other states combined.

Nationally, the average corn yield is likely to decline some eight to 10 bushels per acre from the 2008 trend line, mostly due to inclement weather. The national average soybean yield is also likely to be down one to two bushels per acre from the current Agriculture Department projection of 42 bushels per acre.

These damage estimates relate only to crop production as of the last week of June. This means livestock, infrastructure, building and equipment losses aren’t considered. Additionally, the estimate assumes normal weather conditions will ensue for the remainder of the growing season. Varying weather conditions later in the season could cause the estimate to grow or contract.