Agricultural Prices - Headed higher

Agricultural prices keep heading higher. From the USDA today:


The July All Farm Products Index is 161 percent of its 1990-92 base, up 1.9 percent from the June index and 16 percent above the July 2007 index.

ALL CROPS: The July index is 186, up 1.6 percent from June and 32 percent above July 2007. Index increases for potatoes & dry beans, oil-bearing crops, and feed grains & hay more than offset the index decreases for food grains and commercial vegetables

Fruits & Nuts: The July index, at 151, is unchanged from June but 3.4 percent higher than a year ago. Price increases for apples, strawberries, and pears offset price decreases for grapes, oranges, lemons, and peaches.

Commercial Vegetables: The July index, at 148, is down 3.9 percent from last month but 17 percent above July 2007. Price declines for tomatoes, cucumbers, lettuce, and cauliflower more than offset price increases during July for sweet corn, snap beans, and asparagus.

Potatoes & Dry Beans: The July index, at 197, is up 7.1 percent from last month and 35 percent above July 2007. The all potato price, at $11.42 per cwt, is up 64 cents from June and up $2.94 from last July. The all dry beanprice, at $38.20 per cwt, is up $5.20 from the previous month and $9.70 above July 2007.

E-Verify renewed by the House for five years

Big Apple noted this in the Fresh Produce Industry Discussion Group today in this post. The news, pure and simple , is that E-Verify has been renewed as a voluntary program by the House for five years. The Senate still has to act or the program will expire in November. I would venture to say that few agricultural employers would complain if the program goes away, but it appears that will not be the case. From this press account from Government Executive:

House lawmakers have reached an agreement on legislation that would renew a program that allows employers to verify the legal status of their workers, breaking a stalemate between two committees over concerns about funding for the Social Security Administration.

The bill emerged from behind-the-scenes negotiations among lawmakers on the House Judiciary Committee and the Ways and Means Committee.

The two sides had been at odds over writing language that would both reauthorize the Homeland Security Department's E-Verify program and preserve Social Security's ability to meet its core mission of providing services to seniors and the disabled.

The bill would reauthorize for five years the E-Verify program, which is an online tool that employers can use to confirm a worker's information against Homeland Security and Social Security databases.

Immigration - reverse flow

You may have seen the headlines about the report from the Center for Immigration Studies, called Homeward bound: recent immigration enforcement and the decline in the illegal alien population
Here are some highlights from the report;

Among the findings:

• Our best estimate is that the illegal immigrant population has declined by 11 percent through May 2008 after hitting a peak in August 2007.
• The implied decline in the illegal population is 1.3 million since last summer, from 12.5 million to 11.2 million today.
• The estimated decline of the illegal population is at least seven times larger than the number of illegal aliens removed by the government in the last 10 months, so most of the decline is due to illegal immigrants leaving the country on their own.
• One indication that stepped-up enforcement is responsible for the decline is that only the illegal immigrant population seems to be affected; the legal immigrant population continues to grow.
• Another indication enforcement is causing the decline is that the illegal immigrant population began falling before there was a significant rise in their unemployment rate.
• The importance of enforcement is also suggested by the fact that the current decline is already significantly larger than the decline during the last recession, and officially the country has not yet entered a recession.
• While the decline began before unemployment rose, the evidence indicates that unemployment has increased among illegal immigrants, so the economic slow-down is likely to be at least partly responsible for the decline in the number of illegal immigrants.
• There is good evidence that the illegal population grew last summer while Congress was considering legalizing illegal immigrants. When that legislation failed to pass, the illegal population began to fall almost immediately.
• If the decline were sustained, it would reduce the illegal population by one-half in the next five years.

Here is the rest of the story, from the Agriculture Coalition for Immigration Reform:


“IMMIGRATION ATTRITION THROUGH ENFORCEMENT” – A DISASTER IN SOLUTION’S CLOTHING


Today, the immigration-restrictionist Center for Immigration Studies will unveil a report that contends that the strategy of “attrition through enforcement” is working. The group suggests that 1.3 million unauthorized immigrants have self-deported, and argues that tougher enforcement is working. The claim itself is dubious; more importantly, our nation’s leaders mustn’t lose sight of the true impact of an enforcement-only strategy: if it succeeds, America will lose much of her ability to feed her people.

Are unauthorized immigrants leaving the country? Undoubtedly, the slowing economy is causing shifts in employment patterns. However, such shifts don’t necessarily mean “self-deportation”. Indeed, many agricultural employers across the country report that some experienced workers who left agriculture over the last several years to work inconstruction or other sectors have returned as those sectors (e.g., homebuilding) have shed jobs. Yet, this temporary shift does not solve the growing agricultural labor crisis.


In 2006 and 2007, many producers reported developing labor shortages. In the more serious cases, catastrophic losses resulted – at least one quarter of the pear crop in northern California was lost in 2006; in 2007 one million pounds of asparagus in one western Michigan county went to rot and a North Carolina pickle processor that had to import cucumbers from India when a local supplier scaled back over fears of too few harvest workers.


In 2008, mounting evidence shows that more farmers are making management decisions to plant less, switch to mechanized and subsidized row crops rather than high value fruits and vegetables, and even move production outside the U.S.

As CIS attempts to paint a picture that self-deportation is happening, and offers a solution to fixing America’s broken immigration system, the truly important question is this: if enforcement could actually succeed at purging the American workforce of unauthorized immigrants, what would be the result? In agriculture, the answer is clear. Much of our food production could not be sustained.


The fresh fruit, vegetable, and dairy sectors would be hit the hardest. A majority of the farmworkers planting, harvesting, and tending fruits, vegetables, dairy cows, and other livestock in the U.S. are unauthorized.


In Texas, a recent survey conducted by Texas A&M University reported that 77 percent of grower respondents had taken steps to actively downsize their businesses.

More than one quarter of these American farmers had moved some of their production out of the U.S.

One major melon and onion grower in Pecos County, producing for 20 years on 2200 acres with a $2 million payroll and an additional $2.6 million in economic activity generated in the community, called it quits this year, because of labor.

The largest tomato grower in the northeastern U.S. announcedbefore the planting season started that he could no longer risk producing tomatoes in Pennsylvania due to the lack of legally authorized harvest labor.

A more recent survey of a select group of vegetable producers in California reveals that 80,000 acres of high-value vegetable production have been relocated to Mexico.

The facts are stark. “Attrition through enforcement” means attrition of the American economy. It means job attrition. It means attrition of our nation’s ability to produce our own wholesome and abundant food. It means relying on the world to feed us. “Attrition through enforcement” is no solution. It is a hungry wolf in sheep’s clothing. True solutions are within reach, if Congress musters the courage and the wisdom to act. For agriculture, Senator Dianne Feinstein’s Emergency Agriculture Relief Act would provide temporary stability until Congress is able to revisit the issue of full and wise reform of our broken immigration system.


More news coverage:

Report about dwindling information sparks debate

Where we are headed

There is a lot of back and forth in today's hearing about traceability, best practices, preventive controls, who's in charge, mandatory recall authority, a little bit about compensation.

Bottom line: the industry leaders on the first panel testifying today (including Stenzel and Beckman) are generally ready to back more stringent traceability standards than the 2002 Bioterrorism Act on a risk-based commodity specific standard. For example, tomatoes will be a prime candidate for a more stringent national regulation.

What is less clear is if the FDA will get industry backing for the authority to impose preventive controls at the farm level and through the supply chain. Perhaps again, this will be negotiated on a commodity specific basis.

The FDA will have mandatory recall authority in any coming food safety legislation. However, one committee member worried that if the FDA calls a mandatory recall that is later found to be based on erroneous information, the government would be on the hook for compensation to growers. He's got a point; if a unsubstantiated FDA advisory prompts call for compensation, how much more would a mandatory recall that turned out to be bogus?

Meanwhile, this story from The New York Times Amid Salmonella Case, Food Industry Seems Set to Back Greater Regulation speaks to the fact that industry may be prepared to bend to more regulation. From the story:

Food industry leaders set to appear Thursday before a House committee say they will testify about what they view as mistakes in the federal response to the continuing salmonella outbreak as well as fundamental failures in the nation’s food safety system.

At the same time, however, several food safety experts say, industry leaders are also questioning whether the weak produce-tracking rules that many of them once championed are more a curse than a blessing. As they tally the financial losses from the largest food-borne outbreak of illness in the last decade, produce businesses now show signs of embracing broader regulations for traceability.

“I think that now the industry is realizing based on this outbreak that we need to have the ability to trace back so we can segregate where the problem is and not devastate the entire industry,” said Mike Doyle, director of the Center for Food Safety at the University of Georgia.

Produce industry leaders scheduled to appear at the House hearing, before the Energy and Commerce Committee, said they would call for government agencies to divulge details of initial studies that linked the salmonella outbreak to raw tomatoes.

Fruit and tree nuts outlook - July 30

Find the USDA's Economic Research Service July 30 Fruit and Tree nuts outlook report here. From the report:


For the first time in 2008, the index of prices received by fruit and tree nut growers rose above a year ago in May and remained higher in June. At 152 (1990-92=100), the June index was 1 percentage point higher than the June 2007 index. Boosting the index were record-high June prices for lemons and apples and a price gain for peaches, which when combined more than offset the price declines for fresh-market strawberries and pears.


Later....

U.S. consumers continue to face higher prices for many fresh fruit. The Consumer Price Index (CPI) for fresh fruit in June, estimated at 346.0 (1982=84=100), was 6 percent above the June 2007 index and the highest for any June index reported since 1989. Boosting the fresh fruit CPI were higher retail prices in June for apples, bananas, Anjou pears, Thompson seedless grapes, strawberries, grapefruit, and lemons. Of the various fruit retail price series for which the Bureau of Labor Statistics’ bases its fresh fruit CPI calculations, only the prices for Navel oranges and peaches fell below a year ago in June. Prices for lemons, Red Delicious apples,
bananas, Anjou pears, and strawberries were at record-high levels for the month. Apart from high fuel prices that are inflating the overall cost to ship fruit to various markets, low supplies of apples, pears, and lemons at the end of the 2007/08 season, together with strong exports, are bumping up the prices for these fruit at the retail level. Continued low supplies in the next couple of months as marketing for these fruits transition to the 2008/09 season will likely keep prices strong. Banana supplies remain low as imports continue to be down from last year due to weather conditions several months ago that dampened supplies in important production regions. Banana retail prices have been climbing up since January, with the June
average retail price being the highest so far for the year.

House Energy and Commerce: Oversight and investigations

Rep. Diana DeGette, D-Colo., opened today's hearing with a statement, "We can't afford to do (mandatory) traceability." Other comments by other subcommittee members include observations about the "broken" FDA, which only yesterday was asked to step up oversight of tobacco.

Rep. John Dingell, D-Mich., said the salmonella outbreak should be a "wakeup call" to the risks the countries faces from intentional and unintentional contamination. Dingell also said the 2002 Bioterrorism Act has failed in its purpose. "What should have taken hours or days has taken months or more."

"Why can't FDA mandate traceability?"

New FDA consumer warning

Here is the latest from the FDA this morning....

Laboratory testing by the U.S. Food and Drug Administration has confirmed that both a sample of serrano pepper and a sample of irrigation water collected by agency investigators on a farm in the state of Nuevo Leon, Mexico, contain Salmonella Saintpaul with the same genetic fingerprint as the strain of bacteria that is causing the current outbreak in the United States.

As a result, until further notice, the FDA is advising consumers to avoid raw serrano peppers from Mexico, in addition to raw jalapeño peppers from Mexico, and any foods that contain them.

The test results announced today are part of the FDA’s continuing intensive investigation into the outbreak of Salmonella Saintpaul. The investigation has involved tracing back, through complex distribution channels, the origins of products associated with clusters of illness in the United States, as well as inspections and evaluation of farms and facilities in this country and in Mexico, and the collection and testing of environmental and product samples. One of these tracebacks led to a packing facility in Mexico, and to a particular farm, where the agency obtained the samples.

Previously, FDA inspectors collected a positive sample of jalapeño pepper from a produce-distribution center owned by Agricola Zaragosa in McAllen, Texas. The FDA continues to work on pinpointing where and how in the supply chain this first positive jalapeño pepper sample became contaminated. It originated from a different farm in Mexico than the positive samples of serrano pepper and irrigation water

Breaking news

It was the kind of good timing that defies the odds. David Acheson of the FDA and Lonnie King of the CDC talk about a "smoling gun" in Mexico. Here is the link to the audio file where Acheson states, "Two hours ago.... CNN coverage below: