National Retail Report - Nov. 7

From the USDA's National Retail report of Nov. 7:


Retailers fully shifted their attention and efforts to the upcoming holiday season this week. The majority of retailers were advertising Thanksgiving promotions in a variety of ways. In many ads, meats took up the bulk of front page ad space. There were many value promotions, such as “10 for $10” and stock up sales on canned good prominently placed. Ads on seasonally available and locally grown items continued to be a fixture in the produce section. These included a wide variety of apples, pears, and squash. Items typically associated with the holiday season (cranberries, chestnuts, and pomegranates) were also noted often. Overall this week, fresh produce ads increased nearly 8%. Vegetable ad activity was up slightly more than 15% compared to last week with the most notable increases on zucchini and green beans. Fruit was virtually unchanged. The top 5 featured items were: grapes, pears, asparagus, avocados, and apples. Other notable items this week included navel oranges and russet potatoes. The first of California’s navel crop began showing up in ads and could be seen by the dramatic increase in the number of ads of them sold by the pound. Russet potatoes sold by the pound and in 10 lb bags increased significantly as well this week.

Headline roundup - the economy Nov. 7 - slower exports and uncertainty over organics

Here are a few headlines about the state of the economy this morning, and at least one speaks to softening export demand linked to the rising value of the dollar. That trend could squash fresh produce exports as well in coming months....

Business activity slows, pointing to a deepening recession From Business Week
A compilation of global purchasing managers’ indexes by economists at J.P. Morgan Chase implies a steep decline in global gross domestic product in the fourth quarter and offers hard evidence that the recent market turmoil has pushed the global economy into a recession. That, plus the renewed strength in the dollar, will cut deeply into U.S. exports, which have been the single most important contributor to U.S. economic growth this year.

Will economy eat Whole Foods lunch?

The company also says that it isn't making any predictions. "The uncertain and rapidly changing economic environment makes it highly difficult to forecast future results," it says in a release, adding that it will not give sales estimates.

Marketing experts in many categories are closely watching Whole Foods as a bellwether of organic performance, to see if the widespread acceptance that organic products have earned with consumers holds up in tough economic times.

A recent analysis by Nielsen reports that organic sales now total $4.7 billion, with dollar sales up 23% and unit sales up 20% compared with a year ago. But as the economy worsens and grocery prices continue to rise, that growth has slowed. In the most recent period (through early September, before October's market meltdown), growth slowed to 13% for dollar sales and 8% for unit sales.

Many industry groups predict that the health, wellness and environmental concerns that prompt loyalists to shop organic will not be shaken--or at least not by much--by a faltering economy, and that Gen X and Gen Y organic lovers will ensure that "organic products will be commonplace by 2025," Nielsen says--adding that the Natural Marketing Institute expects growth will taper off to about 10% in 2008 and 2009, and 5% by 2020.

Wall Street hammered From AP

The decline came with a heap of new economic indicators, all of them discouraging:

_ The Labor Department reported 481,000 new filings for unemployment benefits for last week, slightly lower than the week before but well into recession territory.

_ The total number of people drawing jobless benefits in late October rose to 3.84 million, worse than analysts had expected and far higher than a year ago. The last time the figure was that high was February 1983, toward the end of a painful recession, although the work force then was only about two-thirds the size it is today. The increase in people on the rolls suggests the out-of-work are having a harder time finding jobs than in previous weeks.

_ Retail sales for October were the worst in at least 39 years, according to the International Council of Shopping Centers-Goldman Sachs index, suggesting shoppers will be skittish this holiday season.

_ Productivity of U.S. workers slowed dramatically in the summer, another Labor Department report showed. Labor costs rose.

_ The International Monetary Fund, in an updated forecast, predicted the economies of the United States, Europe and Japan will shrink in 2009. If that proves correct, it would mark the first annual decline by such "advanced economies" since World War II.

_ Target Corp. and Costco were among the many retailers reporting sales declines last month. Even teens stayed away from malls. American Eagle Outfitters Inc. and Abercrombie & Fitch Co. reported drops in sales. Cisco Systems issued a warning about slumping demand, sending shudders through technology companies. Auto parts maker Dana Holding Corp. said it will cut 2,000 more employees than originally planned after a bigger loss in the third quarter. Wal-Mart Stores Inc. managed a sales gain as shoppers hunted for bargains.

Dr. Doom From ABC

The cheery face that Roubini wears at social gatherings may be finding its way into his professional life … at least a little.

His predictions for the economy remain dire -- he expects an 18- to 24-month-long recession, far longer than the typical 8-month U.S. downturn. But he believes that a range of measures, from more government spending on infrastructure to more money for banks to a temporary freeze on foreclosures, could allow the country to avoid an even more severe financial crisis.

And he doesn't think the nation is headed toward another Great Depression.

"I'm sure we'll get out of it," Dr. Doom said.

"A year and a half from now when things are changing," he added, "I might be Dr. Boom."

Foreclosures increase

A recession that began in the third quarter is deepening the housing slump and adding to mortgage defaults as companies shed jobs, according to Jay Brinkmann, chief economist for the Mortgage Bankers Association. Home prices fell 5.9 percent in August from a year earlier, the biggest drop since 1991, according to the Federal Housing Finance Agency.

The U.S. median sale price declined the most on record, the National Association of Realtors reported Sept. 24.

Plant closing affect food banks

Demand growing for food assistance

That's what I'm talking about - Blue Cross on board to boost f/v consumption

The Produce for Better Health Foundation has long considered insurance companies and the medical community as potentially strong allies in the quest to improve fruit and vegetable consumption. Here is a news release describing just such an effort in Minnesota, though you will note its mantra is "Every helping helps" rather than "More matters." From the release:


Blue Cross and Blue Shield of Minnesota (Blue Cross) is launching a statewide healthy eating campaign to improve Minnesotans' health and double the percentage of people who eat five or more fruits and vegetable servings each day. Currently more than 80 percent of Minnesotans fail to get the recommended amount of fruits and vegetables putting them at risk for serious health problems including heart disease, cancer, obesity, and diabetes.

Research shows that eating more fruits and vegetables has multiple health benefits -- it protects against heart disease and cancer, helps control diabetes and weight, lowers cholesterol and blood pressure, and reduces the likelihood of heart attack or stroke.

"Our campaign is designed to bring attention to the benefits of healthy eating and make it easier to eat the way we know we should," said Dr. Marc Manley, vice president and medical director for population health at Blue Cross. "This is crucial work because approximately two-thirds of adult Minnesotans are overweight or obese, and changing our eating habits is a significant step we can take to improve health and lower health care costs."

The benefits of this healthy eating work will translate into healthier Minnesotans and will help save health care dollars for everyone. According to a report on obesity issued by Blue Cross and the Minnesota Department of Health earlier this year, if trends continue unchecked, obesity will add nearly $1 billion to Minnesota's total health care costs by 2010, and $3.7 billion by 2020. More importantly, thousands of lives will be lost or negatively impacted by devastating diseases like heart disease and cancer. "Obesity is a multi-billion dollar problem for Minnesota -- every step we take to reduce those costs and improve health means saving lives and money," said Manley. "In fact, a recent Trust for America's Health report showed that investing in community prevention can return nearly $6 for every $1 spent."

The healthy eating work will feature a comprehensive approach to increasing fruit and vegetable consumption. An important part of this new work is a media campaign called "Every Helping Helps" which promotes the life-saving properties of fruits and vegetables.

"The theme "Every Helping Helps" reflects research that shows increasing fruits and vegetables consumption, even a little bit, can have big health payoffs," noted Manley. The campaign debuts on Monday, November 10 on TV, billboards, and mass transit, and will expand to grocery stores beginning in December.

Blue Cross is also undertaking projects in worksites and across communities to improve access and availability to healthy foods. Worksite projects focus on improving company policies, like cafeteria and vending machine offerings, so it's easier for employees to select healthy options. Other work will soon begin as Blue Cross is awarding eight "Healthy Eating Minnesota" contracts to communities to support a wide range of healthy eating strategies. For example, the Dakota County Public Health Department will work with Blue Cross to assess and improve healthy food policies in five schools districts reaching approximately 31,000 staff and students. "We think Blue Cross is on the right track by addressing healthy eating as a way to prevent diseases like heart disease and cancer. We're very excited to work with several school districts and other partners in our county to strengthen policies and make changes that will help people eat more fruits and vegetables," said Mary Montagne, Public Health Supervisor, Dakota County Public Health Department.

"Minnesotans know they should be eating their fruits and vegetables, but knowing and doing are two different things," said Mary Story, PhD, RD, professor at the University of Minnesota's School of Public Health. "Blue Cross' comprehensive approach is smart and their Every Helping Helps campaign will help connect the dots between what we eat and serious health problems."

Sustainability progress

There appears to be at least two distinct efforts to define sustainability in relation to agriculture in the U.S. One - a broader effort - is being led by the Madison, Wisc.-based Leonardo Academy. The other - which has been rumored to be in the works for a while - is focused on fresh produce issues and is expected to defined more clearly by the end of the month. That latter effort - which Tim York described to me in general terms at the recent Fresh Summit - will involve a coalition of buyers, associations, suppliers and non governmental organizations (environmental/consumer groups).

Here is a release from Nov. 3 about the Leonardo Academy's work in regard to sustainability:

The Standards Committee that is spearheading the development of a national standard for sustainable agriculture took a major step forward this week with the election of its leadership. Marty Matlock, Director of the Center of Agricultural and Rural Sustainability at the University of Arkansas Division of Agriculture, was elected to serve as Chairman of the Committee, while Ronald Moore, Moore Farms and American Soybean Association, will serve as Vice-Chair. Will Healy, Research and Technical Manager at Ball Innovations, will serve as Secretary; and Grace Gershuny, representing the Organic Trade Association (OTA), will hold the seat of Vice-Secretary.

The Standards Committee Officers were elected by members of the Standards Committee and appointed by Leonardo Academy, the neutral, third-party ANSI- accredited organization facilitating the development process for the SCS-001 sustainable agriculture standard.

"Leonardo Academy is very pleased that such a diverse group of individuals has been elected to lead the workings of the Standards Committee," said Michael Arny, President of Leonardo Academy. "This leadership exemplifies the depth of agricultural expertise and range of viewpoints represented on the Committee. We look forward to working with the Committee's leadership as it guides the discussion and consensus-building on the many issues that need to be addressed as the standard development process moves forward."

As Chairman of the Standards Committee, Matlock will work with the Committee to identify and deliberate the issues that will be considered for inclusion in the sustainable agriculture standard, as well as to assign tasks to Committee members and subcommittees to foster progress on issues under consideration. Among Matlock's more challenging responsibilities will be to guide the Committee in identifying which issues can be agreed upon at the outset and to help steer a path of consensus on the more difficult issues raised by Committee members and stakeholders.

"Sustainable production of agricultural food, fiber and fuel is the one of the most challenging issues our generation faces. There may be as many as 9.5 billion people coming to dinner by 2050. The decisions we make today will determine how we feed them and their children, how we eat tomorrow and throughout the 21st century," Matlock said.

Ronald Moore, Standards Committee Vice-Chair, stressed the importance of a sustainability standard in meeting this challenge. "It is vitally important that production agriculture from the Midwest is represented during the process of developing a standard for sustainable agriculture," he noted. "The farmers that I represent are the environmental stewards of millions of acres of land, so it is an advantage for all stakeholders to have farmer input and leadership on this committee. All sectors of agriculture must work together on a final standard that is socially responsible, environmentally sound, and economically viable today -- and in the future -- for the production of low cost, high quality food, feed, fiber, and fuel."

Will Healy, Committee Secretary, believes that defining sustainability is crucial to the industry of agriculture. "The problem today is that the agricultural heritage of America is being lost," he said. "There are a lot of misunderstandings, misconceptions and misinformation generated about what we as growers do and how this impacts consumers. Identifying a framework and set of indicators for sustainability will provide us all with a target to move toward, improve our production systems and enhance our products in ways that are not only better for the environment but for growers and consumers also."

Committee Vice-Secretary Grace Gershuny noted that the theory and practice of organic agriculture has been at the leading edge of the concept of sustainability from its inception. "Many of us believe organic should be recognized as the foundation of this current discussion around standards for Sustainable Agriculture," she said. "I believe that it is important for OTA, which has the mission to 'promote and protect the growth of organic trade, to benefit the environment, farmers, the public and the economy,' to actively engage in this discussion."

One of the most distinguishing aspects of this open consensus process for developing a national standard is that it provides a forum for discussing and vetting differences in opinion over what sustainability means across all sectors of agriculture. While ideas vary on a number of issues, Healy stresses that, "We are all concerned about water consumption, land use, chemical inputs. This process allows us to come together as a group and to send a common message that the agricultural industry is concerned about sustainable production and that we want to move forward in a positive way."

Here is coverage of my interview with Tim York in the Nov. 3 issue of The Packer:

ORLANDO, Fla. -- A coalition of fresh produce buyers, grower-shippers, trade associations and consumer groups plan to announce in November a new project to define and measure sustainability.

Tim York, president of Markon Cooperative Inc., Salinas, Calif., is (one of several industry stakeholders involved with )the initiative. He said the industry should learn from the lessons that foodborne illness outbreaks have provided in the past two years, the most important being specific guidelines.

"We didn't have that prior to the leafy greens metrics," York said. "You had industry guidance that said you should consider, you should evaluate, you should look at these things, but it wasn't specific. It wasn't measurable, and it wasn't verifiable."

Another lesson learned from the industry's struggle with food safety, he said, is the importance of change coming from within the industry.

"Because there wasn't a strong industry-driven standard, you had buyers and third-party auditors developing their own standards," he said.

That has resulted in a multiplication of audits and food safety costs for the industry, York said.

The importance of including environmental groups in the process reflects a lesson learned from the food safety issue, he said. Environmental groups were critical of some of the industry's food safety practices, going so far as to call the leafy greens rules a "scorched earth" policy.

Now, with increasing momentum for sustainability standards, York said the industry will seek to avoid the same outcome.

He said most major buyers already have a sustainability office within their organization or at least put the responsibility on their food safety staff.

At this point, York said the industry must work together and develop a common way of evaluating what sustainability really means.

York said the industry-led effort is distinct from the standard-setting work of the Madison, Wis.-based Leonardo Academy.

On Sept. 29, the Leonardo Academy issued a news release that said that the first steps toward developing a national standard for sustainable agriculture in the U.S. had been taken. The Leonardo Academy said more than 50 representatives of U.S. agricultural production, food and clothing, manufacturing, retail, environmental, labor and academia launched negotiations over the definition of sustainable agriculture.

The process is sanctioned by the American National Standards Institute, a national voluntary standards body that has helped develop standards for a variety of business sectors, the news release said. Leonardo Academy is an accredited standard developer for ANSI.

Amanda Raster, the projects manager for the sustainability standards with the Leonardo Academy, said she was not aware of any rival industry-driven initiative to create sustainability standard.

A committee of the Leonardo Academy voted to create a set of general principles from "the bottom up," establishing task forces to gather different metrics and how they might apply to the standard. The task forces plan to meet in early November.

York said one troubling aspect of the Leonardo Academy's draft standard was that it is applied to all crops, whether fruits and vegetables, forestry, biofuels, corn and all the program crops.

TK: Perhaps further comment on this issue would be better served by waiting for more details from the produce specific effort. While the Leonardo Academy's effort is very broad, it appears some of the initial fears that its standard-setting work was not responsive to input from "conventional" producers have been addressed; the most recent news release from the Leonardo Academy indicates the sustainability standard is being rebuilt from the bottom up.