Walking on ice: the U.S. consumer

Although the economy grew surprisingly well in the second quarter, the signs are much less rosy for the third quarter. Which candidate will the American voter trust with the economy? The guy with seven houses or the Harvard educated elitist? That question could represent the essence of this election. Does McCain's promised slash and burn reform of spending reassure or trouble Americans? Does Obama's lack of track record in leadership put him in a vulnerable position? Here are a few headlines about our fragile consumer psyche in the wake of the steep fall in the Dow yesterday.

Dow plunges on warming of financial tsunami - Just what we don't want to hear. From the FT:

Weary investors in the United States received a further pummelling yesterday as data showed new unemployment claims at a near-five-year high last week, a leading fund manager gave warning that America faced a “financial tsunami” and key retailers released disappointing sales figures.

The mounting nervousness about America’s economy dragged down shares. The Dow Jones industrial average fell 344.60 points, or 3 per cent, to 11,188.20, and the S&P 500 closed down by 38.20 points, or 3.3 per cent, at 1,236.80 points.

Consumer spending slows

From the NYT:

'Consumer spending, responsible for the bulk of U.S. gross domestic product (GDP), slowed in July as the effects of the government’s stimulus package tapered off.

The Commerce Department announced that consumer spending grew at a 0.2% rate in July. But on an inflation-adjusted basis, consumer spending dropped 0.4%, as high prices took their toll on the household budgets of strapped consumers.

"The temporary impact of the stimulus has passed, and it looks like consumer spending is on track to decline in real terms in the third quarter," John Ryding, the chief economist at RDQ Economics, told The New York Times. "It’s certainly a wake-up call to people who [Thursday] looked at the GDP report and said, ‘Hey, the economy grew by 3.3%, so everything’s O.K.’ "

Economy stays stuck as consumer cut back From the NYT:

The nation’s economy failed to pick up speed in August and the final days of July, as rising prices and a weak job market prompted consumers to reduce spending and shop at discount stores to try to conserve cash.

Economic activity stayed “weak, soft or subdued” across the country, according to the Federal Reserve Bank’s beige book, a regular snapshot of the economy. The latest edition of the survey, released on Wednesday, signaled that the economy spent the summer in a rut, with consumers feeling little relief from the government’s tax rebates.

Other headlines:

Coffee shops feel jolt

Wal-Mart follows shifts in consumer spending

New York: prepare to tighten your belts The NY governor is taking the lead in budget cutting; could McCain-Palin be next with this message?

"Te time to act is now."
Powerful words erupt from the mouth of one of the most powerful men in New York State.
Governor David Paterson is addressing the people of New York in a live televised speech. He says New York will be $26 million in debt within three years if things don't change. He says New York State must tighten its belt as its residents have, in order to recover from a recession.
He calls it a recession.
"For too long, we have done less with more, and paid more with less, " he says, "Your government is going to follow your lead."

TK: And by the way, the rest of the world isn't feeling so good either. From Bloomberg:

The euro declined to an 11-month low against the dollar on speculation a credit-market slump will push European economies into recession.

Japan adrift in recession - From The Standard:

Asia's largest economy was left rudderless again yesterday after Japan's prime minister quit suddenly, sparking concerns that free-market reforms will be put on the backburner as a recession looms.

Japanese stocks ended at a five- month low as the return of the revolving door politics of the recession-ridden 1990s left the country searching for its third prime minister in less than two years.

Whoever replaces Yasuo Fukuda will inherit the same problems he faced - a deadlocked parliament, a worsening economy, an ageing population and huge public debts.

TK: Check out this link to audio presentations by Steve Lutz, John Stanton and Desmond O'Rourke at the recent U.S. Apple Association marketing conference. All three talks tied in what is going on in the economy with impacts on produce department sales.

The Packer Extra - Sept. 2

The Packer Extra: Sept. 2
Brought to you by:

Famous Software
RJO Produce Marketing
Ballantine Produce
Maxco Packaging
YottaMark

Need to catch up on recent news from The Packer? Check out our new Packer News Feed here:

Officials report end to salmonella outbreak
The Salmonella Saintpaul outbreak that affected more than 1,400 Americans and cost the produce industry millions of dollars is over. Go here for the story:

Organic Chilean grapes could head to U.S.
Chilean grapes could be shipped to the U.S. without methyl bromide fumigation under a proposal from the U.S. Department of Agriculture. Go here for the story:


Head of Idaho grower-shipper group retires
SUN VALLEY, Idaho - Dave Smith, 67, retired from the Idaho Falls-based Idaho Grower Shipper Association after 28 years as president. Go here for the story:

U.S. Apple projection shows tight supplies
CHICAGO - With the pipeline empty and demand soaring, U.S. fresh apple marketers were probably praying for a bumper crop this season. Go here for the story:

Del Monte acquires melon growing operations
The addition of two Guatemalan melon growing operations to its production roster should help Del Monte Fresh Produce NA Inc. expand sales. Go here for the story:

Consumer motivation - to have and have not

John Stanton of Philadelphia-based St. Joseph's University has been a speaker on the produce convention circuit for some time. The first time The Packer's library notes Stanton was in 1998, when Jody Shee covered Stanton giving remarks to the National Grocers Convention. At the time, Stanton predicted the rising influence of television chefs, among other food trends. Since then, Stanton's name pops up some 15 times, as he has been quoted in stories ranging from Wal-Mart ("Everyone has an Achilles heel, and, at some point, Wal-Mart will find something they can't overcome. If you asked me in 20 years if Wal-Mart will be in a dominant position, I would answer no. But I don't have the foggiest idea of why they won't," Mr. Stanton says. Global Produce, 2000) to warning marketers about leaning too heavily on a trendy health message for fruit and vegetable promotion, and the fickle ways of journalists. ( "What are they going to write about next year?" he asked. "They're not going to say, ‘Hey, you know what we told you last year about blueberries? Well, it's still true.'" The Packer, 2002)

At the Aug. 22 session of the U.S. Apple Association Marketing Conference, Stanton provided on the more livelier presentations at the show with the topic of consumer motivation. Stanton's presentation dealt with the changing dynamics of the American economy - particularly a widening gulf between the "haves" and the "have nots."

Stanton presented some thought provoking statistics that reveal that 48% of Americans polled in 2008 think the country is divided along economic lines, up from just 34% who felt that way in 1988.

What are the implications for produce marketers? "Have not" consumers will "trade down" on their choice for produce and shop price-oriented channels. What's more, Stanton boldly said the organic food movement has "jumped the shark" and is now waning. However, Stanton does buy in to the notion that the local food movement is here to stay.

All in all, Stanton tried to tailor the message to apple marketers . For example, what would "generic apples" look like as a price play? Can the industry sell more ugly apples like Europe does to achieve a better price point? How can the industry get more of a presence in dollar stores and convenience marts? A few misses in some of those speculations, perhaps, but Stanton's intelligent and thoughtful presentation braces the industry for an extended period of sober economic realities.

U.S. Apple Marketing Conference - Slideshow

Apple show update

Posting here again from Chicago, where last night I had the honor of presenting the 2008 Apple Man of the Year Award to George Lamont of New York. George certainly won the praise of many in the industry for his relentless and tireless work on behalf of apple growers, including his lead role in the Premier Apple Cooperative. Check out Andy Nelson's coverage on The Packer's Web site.

Also yesterday, Steve Lutz had an insightful presentation on U.S. apple retail sales performance and Desmond O'Rourke reviewed the effect of the slowing economy on apple sales. The production outlook for China and Europe were presented yesterday, and this morning is the U.S. regional crop overview, discussions of sustainability, consumer motivation and more.

Truck rate report - Aug. 19

As I get ready to board a Southwest Flight to Chicago for the U.S. Apple Association Outlook meeting, here is the summary from the USDA Truck Rate Report of Aug. 19. Rates are flat to softer in most regions:

A slight surplus of trucks was reported for the following commodities and regions: pears from Sacramento & San Joaquin Valley California, lettuce, mixed vegetables, strawberries, raspberries and blackberries, apple pears, grapes, nectarines, melons, peaches, peppers, plums and apples, mixed vegetables and strawberries, onions from North and East Points Colorado, sweet potatoes from Louisiana and Mississippi and peaches from South Carolina. A surplus of trucks was reported for the following commodities and regions: citrus, avocados, mangoes, asparagus and mixed vegetables from Mexico Crossings Through Texas and watermelons from Texas. FIRST REPORT was issued for onions from North and East Points Colorado, potatoes from Twin Falls-Burley District & Western Idaho and Big Lake and Central Minnesota. LAST REPORT was issued for onions from Vidalia onions. All other districts reported an adequate supply of trucks.

Cranney to California Citrus Quality Council

After 15 years at U.S. Apple, Jim Cranney is moving on. Congratulations to Jim's appointment as president of the California Citrus Quality Council. The council's Quality Assurance Program objective is "to make sure our citrus meets sanitary, phytosanitary, pesticide residue tolerances and food safety and food additive standards of domestic and export markets."

From my experience, Cranney is a detail oriented manager who should excel at this important post, vacated by the retiring Wally Ewart, the highly esteemed leader of the group since 2001 who previously spent time with the Northwest Horticultural Council.

You could say that comparing the U.S. Apple Association and the California Citrus Quality would be akin to comparing apples and oranges and you would be right. U.S. Apple may have more heft (about four times the budget of CCQC), but the Auburn, Calif.-based group, like U.S. Apple, is keenly tuned to crop prospects and heavily involved in technical/regulatory and trade issues.

Jim is very comfortable in the nitty gritty issues of growing and marketing and should be a leader with a relatively short learning curve. Congratulations again to Jim and best wishes to Wally Ewart in his retirement.

One interesting tidbit is that both Wally Ewart and Jim Cranney were honored as "Apple Man of the Year" by The Packer and The Grower publications.
Here is the story about Ewart from 1997:

Hugh W. Ewart, known by many as Wally, was honored by THE PACKER and The Grower magazine as the Apple Man of the Year during a Feb. 25 reception at the U.S. Apple Association's annual meeting in Orlando.

As vice president of scientific affairs for the Northwest Horticultural Council, Ewart performs duties for the apple industry, such as speaking, lobbying and giving expert testimony.

He is ``someone who has spent years on the front lines in some of the toughest jobs the industry has ever faced, fighting some of the toughest fights the industry has ever fought,'' THE PACKER's editor Gordon Billingsley said in presenting the 31st annual award.

The apple industry, as well as government officials, turned to Ewart in recent years for clear insight into such critical issues as Alar and E. coli, Billingsley said.

A former teacher, business leader and research chemist who holds a Ph.D. from Yale University, Ewart has spent the last 10 years building a strong political base on issues related to pesticide, government regulations and food safety.

``At this time of heightened government attention and concern, and recent crises in apple and horticultural product contamination, his impact on the debates, issues and regulations have come to the forefront,'' Billingsley said. ``And that impact is likely to grow considerably in the coming year.''

Ewart will play a key role helping to ensure that the Food Quality Protection Act of 1996 will be reasonably and fairly implemented, Billingsley said.

``Through the force of knowledge and personality, he has become the right person at the right time for the North American apple industry,'' Billingsley said.

The first apple industry member to be named to the U.S. delegation to the Codex Committee on Pesticide Residues, Ewart also is a member of the U.S. Department of Agriculture's IR-4 Commodity Liaison Committee.

Here is an excerpt from my Apple Man of the Year presentation to Cranney in 2005:

Our winner started in the trenches of the produce industry. His work as a produce buyer, market news reporter and consultant laid the foundation for his first-hand knowledge of the industry.

His work in the Peace Corps before that broadened his view of world.

In the context of 10,000 years of mankind appreciating apples, the man we honor tonight is no doubt one the top 21st century experts in the world about technical issues related to apples.

One former winner said, “I can think of no other individual who has contributed more to the success of the domestic apple industry.”

One nomination noted that our winner has taken the time and effort to thoroughly educate himself on all aspects of fruit production and marketing. The letter continued, “His straightforward and factual method of personal interaction has brought praise and respect from all.”

Your winner has shown a willingness to tackle difficult issues and work to educate the industry and regulators on the facts. That attention to detail draws praise from many. It’s not easy to hold a group of regional players in a highly competitive market and make them collaborate, but your winner has done that.

Aside from his knowledge, your letters reflected an appreciation of his character qualities.

“He is truly loyal as the day is long,” one previous winner said. He is loyal to more than just person he worked for, but also to the apple industry and loyal to the process of improving the industry.

Another nomination referred to our winner’s honesty and non-confrontational approach to sensitive issues. Another mentioned his diligence and attention to detail.

He is considered a watchdog for the industry among regulators without being seen as an antagonist.

He has helped present the apple industry’s position in a thoughtful, reasoned way that resonates inside the Beltway.

Another nomination referred to our winner’s modesty. More than one nomination referred to our winner’s ability to hold U.S. Apple together through two separate transitional periods.

Our winner is a husband and proud father of two adopted children.

In a decade of service, he has become a big part of the apple industry’s family, now serving as U.S. Apple Association vice president. Through the years, his leadership and commitment have made the Outlook conference what it is today.

Please join me in congratulating Jim Cranney, the 2005 Apple Man of the Year.

Chat - Julia Stewart

Julia Stewart says she was an econ major in college but her heart was in communications. Now she jokes, "As it has turned out, my wonk econ background has served me well as a communicator -- I can crunch the numbers and then spin them, too."

Julia is the latest feature subject of the Fresh Talk chat series. Find the link here; the Q and A with Julia can be found at the bottom of the page.

Here is a little mid-February coverage from The Packer about Julia:


PR, communications specialist joins PMA
By Angie Hanson, Staff Writer
Julia Stewart recently joined the Produce Marketing Association as public relations director, responsible for overseeing all public relations and crisis communications endeavors.
"It's very difficult to find a public relations, communications strategist," said Lorna Christie, senior vice president of industry products and services for the Newark, Del.-based PMA. "She has a rare set of talents that already are making her valuable to us and the industry. She's a communications strategist that understands the produce industry and is very well connected, and that's a very unique set of attributes."
Stewart, who succeeds Debra Mitchell, brings more than 15 years of industry experience to the role, most recently as a communications consultant for the company she founded -- Ashburn, Va.-based Clarity Communications LLC -- in 2004 and previously as vice president of public relations for the U.S. Apple Association, McLean, Va., where she served for 11 years, Stewart said.
The PMA position, which she started in January, was luring for Stewart because it provides an opportunity to deal with a variety of matters that are vital to the industry, she said.
"My consulting experience over the last four years was incredible, so it was really going to take something special to make me change," Stewart said. "For communications professionals in the produce industry, there aren't positions that are much more meaty. I have a chance to work on a broad range of issues that are critical to the industry and with an organization and people that I respect."
PMA public relations coordinator Theresa Zuroick remains on the association's staff.



me: Okay - thanks for taking part in the Fresh Talk chat. My starter question - where did you grow up?

9:29 AM

stewartjuliaa: I spent most of my early years in Charlottesville, Va. -- people often get C'ville confused with Charlotte, N.C., so let's be clear I'm a Virginia girl.

9:30 AM

Went to college there, at UVA, then moved to northern Virginia where I've been ever since.

9:31 AM

me: Never checked out Kansas - too bad...As you attended UVA, did you ever change majors - and what was the eventual degree that you received?

9:34 AM

stewartjuliaa: My degree is in economics, though my heart was always in communications. As it has turned out, my wonk econ background has served me well as a communicator -- I can crunch the numbers and then spin them, too.

9:35 AM

me: Ha..you are right. Don't we all? Tell me about your first job after college and what eventually connected you to the world of fresh produce...

9:37 AM

stewartjuliaa: I was an economic researcher for what used to be the National Forest Products Association, now part of the American Forest & Paper Association. I'd never heard of an association before coming to D.C., it turns out the world is full of them. I tracked and reported on housing starts (a sore subject these days) and stuff like that, and producing an econ newsletter. I quickly figured out I liked communications much more than number crunching. After several years learning PR and crisis management from some of the best in D.C., I hooked a job with what is now U.S. Apple Association, and the rest as they say is history.

9:38 AM

me: That's right - 11 years at U.S. Apple, correct? What did you enjoy about that time and that industry?

9:44 AM

stewartjuliaa: That's right, 11 years -- hard to believe, they flew by. It was wonderful, because of the people and products I got to work for, and the broad range of work we did while I was there -- we literally put apples back on the map as a health food, while fighting fires like food safety and antidumping, and pushing our agenda on Capitol Hill. The professional experience was extraordinary. And the personal experience was too, I had my two children and grew my family while I was there.

9:46 AM

me: After U.S. Apple, you started your own communications/consulting company. Was that intimidating and did you enjoy that challenge?

9:49 AM

stewartjuliaa: It has been both the most terrifying and invigorating thing I've ever done in my life. I'd gotten very comfortable at USApple, and I am not a risk taker by nature. Starting Clarity Communications taught me that taking some risk now and again can be a good and empowering thing. I learned a great deal in a short amount of time, both about being running a business and about myself.

9:52 AM

me: That's really an accomplishment - congrats to you on that. Tell us a little about the scope of your responsiblities for PMA...

9 minutes

10:01 AM

stewartjuliaa: Clarity was going great, but PMA offered another tremendous learning and growing opportunity as their PR director. I'm still getting my head around the full scope of the job somewhat, but in a nutshell I help drive how PMA communicates with its world so that everyone can get the most out of their relationship with PMA, AND help respond to industry crisis situations. That's quite a job description! And I get to work with some of the best brains in the business, including Kathy Means and Bob Whitaker, and PMA's great education team (the folks who come up with the ideas for Fresh Summit and other conferences). I love working with smart people, and PMA is loaded with them.

10:03 AM

me: Yes - you have quite a roster there. I know my time is short, but thanks for making time for this chat - I've got more questions to ask, but that may have to wait for next time. Thanks Julia.

10:04 AM

stewartjuliaa: Enjoyed it, I'm so glad to be working with you and the whole team at The Packer again.

Jim Allen checking in

Got an email from the always engaged and enthusiastic Jim Allen today. Besides a coming trip to Cuba - the New York Department of Ag is sponsoring an official trade mission (30 plus New Yorkers) the week of April 21-24 - Jim also noted an upcoming visit to Russia. From Jim's email:

I am enjoying the Russian coverage in the Packer. Since the Berlin show NY has shipped close to 10,000 cartons to Russia. Our USEAC (Export Council) is planning a trade mission to St. Petersburg in May. I will be attending along with shippers from CA, PA, MI, NE and NY. We are excited about the potential business in Russia. . I am sending you a copy of the editorial that I had in our Core Report about the Russian market. Thought you might be interested, that other states besides Washington are looking to Russia. Obviously WA dwarfs our shipments, but this is good new business for us.

Jim Allen
President
New York Apple Association, Inc


TK: Below is Jim's column about Russia from the Core Report. And yes, they really do love big apple sizes in Russia:


The Russians are Coming! The Russians are Coming!
The last place you would expect to hear this phrase would be in Berlin, Germany, but that certainly was one of the most heard comments at this year’s Fruit Logistica Show. If it wasn’t the Russians, then it was the Indians that were storming the different booths in search of fresh apples. When one realizes that today Russia imports more apples than any other country and that India is one of the fastest growing new markets, requests from both of those countries should not have surprised anyone. Maybe overwhelmed would be a better description, because it was amazing to have so many very interested parties seek out the USAEC booth to specifically talk about USA apples. Our booth was conveniently located adjacent to the Washington Apple Commission booth, and at first one might think that would not be good for us, but on the contrary, many interested apple importers are looking for East coast sources for apples. Apparently the Western arrivals tend to jam up the ports, and Eastern arrivals would take a different path of entry. Let’s face it, when you export over 20 million cartons a year, you draw a lot of attention, and most of that attention had an opportunity to also sample a crispy, white Empire apple from New York. Both India and Russia prefer large, red fruit, which is not exactly our strong suit, but taste is also a factor, and that is our strength. Last year at the October PMA show in Houston, a Russian importer visited our booth inquiring about wanting many container loads of big red apples. Big to me is 88 and 80 count, and I was explaining to her that we would prefer to ship 100 and 88 size. I was taken back when she interrupted, in her Russian/English dialect (and rather forcefully), “NO. NO, I said big, as in 72 and 56 count and yes 48 count size.” I, with my flat Western New York twang, asked her to let me know how that all worked out for her this year. Guess who came to the booth in Berlin, and she politely told me that her desires for large fruit did not work out at all, not from the East. Helenia, as I now know her, could become an important key to shipments of Eastern apples into Russia and her tone, as well as mine, has both taken a new direction. The reality of our apple industry, compared to the Western U.S. industry is now better understood, and those that need to know are better informed about what each are capable of producing. Being in Berlin helped move this process forward. Ward Dobbins of HH Dobbins in Western New York and Chuck Andola of United Apple Sales, along with Kaari Standard of New York Apple Sales all had the chance to communicate with prospective apple importers from around the world. Ward commented, “It is hard to imagine a world glut of apples based on the amount of demand here at this show, when you talk to some importers that talk in thousands of metric tons, not just a few loads.” Clearly, one factor in the demand for more apples was this year’s small European crop, specifically Poland, which was hurt by spring freeze. Even with a Polish crop, the demand for apples in these countries continues to exceed the production and the weak U.S. Dollar continues to drive the demand as well. Checkpoint Charley was the gate between East and West Berlin from 1961-1989, where armed soldiers from the U.S. and Russia stood, separating capitalism and democracy from socialism and totalitarianism. Today, the gate for new business and expansion into emerging markets is open and unguarded.


TK: I extended Jim the opportunity to be a "guest blogger" as he travels to Cuba and Russia and that offer goes out to all association and industry leaders who think they would like to try it out. Let me know and I'll set you up.

Shattered

I see the Pundit has some coverage today of the grape shatter issue. Big Apple of the Fresh Produce Industry Discussion Group aptly wrote this headline about this issue in a post dated Feb. 26:

ACTION: Proposed rule. Standards for Grades of Table Grapes; AMS is proposing an additional 5 percent allowance for shattered grapes. Wholesalers prick up your ears.


TK: The comment period closes March 28, and it doesn't appear consensus is at hand. Here is the long and somewhat tortured background of this issue, lifted from the proposed rule:

In November of 2005, AMS received two petitions requesting a revision to the United States Standards for Grades of Table Grapes (European or Vinifera Type). These petitions were received from the CGTFL on November 9, 2005 and Western Growers on November 23, 2005
(European or Vinifera Type), which included a 10 percent allowance for shattered berries en route or at destination only in consumer units; the comment period ended on March 27, 2006. AMS received fourteen comments in response to this notice. Twelve comments supported the proposal; one from a regional agriculture trade association, one from a table grape association, and ten from members of the table grape association. Each of these comments indicated that new improvements to consumer packaging resulted in less shrinkage and a more sellable product to consumers, and with this These two trade associations represent more than 85 percent of the European or Vinifera type table grape production in the United States. They requested an additional 10 percent allowance for shattered berries en route or at destination for grapes in consumer containers. The petitioners stated that they feel change, specific to consumer containers, is warranted as the majority of table grapes are now being sold in consumer containers which allows shattered berries to be fully utilized/sold. On January 24, 2006, AMS published in the Federal Register (71 FR 3818) an Advanced Notice of Proposed Rulemaking (ANPR) soliciting comments on the proposed revision to the United States Standards for Grades of Tabe Grapesimprovement, a revision of how shatter is scored was needed. One comment opposing the proposal was received from a national trade association representing wholesale produce receivers. The receivers' association stated that an additional allowance for shattered berries would be unfairly damaging to receivers and consumers. Finally, one comment was received from a trade association of shippers of table grapes from the State of Sonora, Mexico. The shippers' association supported the idea of revisiting the standards for table grapes, however, it wanted to investigate the potential effects of an added ten percent allowance during the upcoming season before supporting this revision. The association indicated that the 10 percent allowance seemed high. As a result of the comments received from the ANPR, AMS published in the Federal Register (71 FR 55367) a proposed rule on September 22, 2006. Taking into account the comments received, AMS believed that it would be more beneficial to the overall industry to fully utilize shattered berries that are not otherwise defective, in consumer containers. The majority of table grapes are now sold in consumer containers. A 60-day comment period was allowed for interested parties to comment on the proposed revision. The comment period ended on November 21, 2006. In response to the proposed rule, AMS received fourteen comments. Twelve comments supported the proposal. Two comments were from regional agricultural trade associations; one comment was from a national table grape association; and nine comments were from members of an agricultural trade association representing growers, packers, shippers and exporters of table grapes. These comments were almost identical to the majority of comments received from the ANPR regarding current packaging and marketing procedures. The comments indicated that because of changes in packaging and marketing practices, a revision of how shatter is scored was warranted. Two comments opposed the proposal. One comment was received from a national trade association representing wholesale produce receivers, and one from a grower and shipper of table grapes. The receivers' association stated that they saw no reason to provide a special allowance for shattered berries in consumer containers. The comment stated that the proposed allowance would enable more lower-quality product to qualify for the U.S. No. 1 grade. The comment also argued that the proposal actually allows 22 percent shatter at destination. The commentor also noted that the percentage would be higher if the Perishable Agricultural Commodities Act(PACA) Good Delivery tolerances were taken into account. PACA tolerances may be taken into account when AMS resolves contract disputes under the PACA. The comment received from the grower and shipper of table grapes opposing the revision stated that it was not appropriate to change the current grade standards and thereby downgrade the industry's and consumers' perception of table grapes in general. The comment also proposed a new grade, ``U.S. No. 1 High Shatter'' as an alternative. However, the original proposal was for an additional allowance for en route or destination inspections only. Developing a new grade would have resulted in that grade needing to be applied at shipping point in order for it to be applied en route or at destination. Therefore, developing an additional grade was and is not being considered at this time. One request for a reopening of the comment period was received from a receiver/wholesaler after the comment period ended. At that time, AMS believed that reopening the comment period would not facilitate resolution and would only prolong the then current state of uncertainty, with regard to whether a 10 percent allowance for shattered berries would be allowed. However, due to the lack of industry consensus concerning the proposed rule, AMS published in the Federal Register (72 FR 35668) a notice to withdraw the proposed rule on June 29, 2007. AMS subsequently met with CGTFL and several of its members. CGTFL stated its continued interest in an additional allowance of 10 percent for shattered berries en route or at destination for grapes in consumer containers because the majority of table grapes are now sold in these, which allows shattered berries to be utilized. AMS also met with the North American Perishable Agricultural Receivers (NAPAR), several of its members and other wholesale produce receivers. Generally, the receivers stated their opposition to an additional allowance for shattered berries based on their belief that such an allowance would be detrimental to the grape industry and consumers. On October 5, 2007, AMS received a second petition from the CGTFL requesting a revision to the United States Standards for Grades of Table Grapes (European or Vinifera Type). Its petition revision repeated the original request for an additional 10 percent allowance for shattered grapes en route or at destination for grapes in consumer containers. The requested change of the petitioners for a 10 percent allowance for shattered berries in addition to the 12% tolerance for total defects could potentially allow for 22 percent defects in a lot and still grade U.S. No. 1 Table. We believe that such a possible percentage is too high and would not appropriately reflect what is expected by industry and consumers in a U.S. No. 1 Table grade. Accordingly, AMS is not proposing this requested 10 percent allowance because AMS believes it would weaken the standard and reduce consumer confidence in the grade. However, AMS recognizes that a change in packaging and marketing has occurred in the Table Grape (European or Vinifera Type) industry. Additionally, AMS believes that due to improvements in packaging, marketing, and shipping that a revision to the current U.S. Standards would be beneficial to both the industry and consumers. Therefore, AMS is proposing a 5 percent allowance for shattered grapes be added to the United States Standards for Grades of Table Grapes (European or Vinifera Type). The proposed allowance is specific to table grapes en route or at destination in consumer sized packages. The standards currently provide in section 51.886, Table II Tolerances En Route or at Destination, a 12 percent total tolerance for bunches and berries failing to meet the requirements of grade for en route or at destination. Revising section 51.886, Table II, by adding a 5 percent allowance for shattered berries would mean that shattered berries would not be scored as a defect against the 12 percent total tolerance until the amount of shattered berries exceeds the 5 percent allowance. For example, if a lot has 17 percent shattered berries, 12 percent would be reported as a defect and the lot would meet the requirements of the U.S. No. 1 Table grade provided no other defects were present; however, if a lot of berries has 18 percent shattered berries 13 percent would be reported as a defect, which would cause the lot to fail to meet the requirements of the U.S. No. 1 Table grade by one percentage point. To enable utilization of this revision in the 2008 season, this action provides a 30-day comment period for interested parties to comment on the proposed revision. Also, AMS is particularly interested in comments and factual data that would demonstrate that this proposed revision would either positively or negatively impact financially interested parties. Specifically, data that shows expected financial losses due to adjustments made by shippers or conversely, expected additional expenses that would be incurred by receivers due to shattered berries in amounts of five percent or greater.

Something has got to give

The National Restaurant Association predicts 4.4% growth for 2008, while other economists are calling a recession likely next year. I don't think both scenarios are possible, so it will be interesting to see which prognostication is closer to the mark. Talking yesterday to Bob Young, economist with the American Farm Bureau Federation, he said agriculture broadly benefits from the weak dollar. For example, combined U.S. apple, pear and stone fruit exports have been up about 15% from January though October this year. Grain commodities benefits from several factors aside from the weak U.S. dollar. Improving economic conditions in Asia are creating a rare period of "demand pull" for U.S. agricultural products, and fund managers are hedging inflationary pressures on the stock market by speculating in the futures markets for corn, wheat and soybeans. Biofuel adds to the pitched demand for corn. All in all, it is an intoxicating brew for U.S. agriculture now, but it certainly appears the broader economy is walking on eggshells as we head into 2008.

South Africa - U.S.losing lustre

If it so tough to sell to the U.S. market, why does everyone want to do it? That's conundrum is worth considering in view of the fact that intelligence from South Africa indicates exporters there think the exchange rate and phytosanitary requirements make the U.S. market less than lucrative. The latest South African deciduous fruit report and outlook from the USDA's Foreign Agricultural Service is available here.

From the report:

The South African Ministry of Agriculture continues to support farmers with policies and to establish trade agreements with other governments to enable growers access to new markets. Statutory measures were updated to improve technical support through compulsory levies from growers. The recent statutory measure requiring all growers, exporters and traders to supply information on the quantity and price for deciduous fruit will enable the industry and all stakeholders to have concise information about the local supply chain. After deregulation of the state controlled markets through the Agricultural Product Marketing Act of 1996, it took some years to acquire close to accurate information because of fragmentation within the industry. By December this year, Chinese Fuji apples may be available in the local retailers and fruit markets because of a signed agreement between China and South Africa early this year. South Africa’s statistics for area planted are improving for apples, pears and table grapes, and updates are reflected at the PS&D tables appearing in this report below. The improvement is mainly because of newly established specific commodity forums that employs technical staff for annual tree census. The new statutory measure implemented this year that regulate records and returns relating to trees and production and marketing for both pomefruit and stonefruit through the Marketing Act of 1996, will also ensure accuracy for future statistics. The South African table grape industry (SATI) is now in its third year of operation as an independent industry after its separation from the Deciduous Fruit Producers Trust (DFPT). The industry, which is funded by its members, are setting up structures and programs to handle knowledge management, generic promotion, and market access for table grapes. The industry aims to develop into a competitive brand similar to the California tablegrapes Industry. The 2006/07 harvest for both apples and pears started on time, during the first week of December, and should end around November 30th. By week ending November 11, 2007 the apples and pear industry was in week 45 of both harvesting and exporting. The South African Pomefruit (apples and pears) Association expects the area planted to increase in 2008 because more wine grape farmers experienced losses and therefore may uproot the vines again to replant the fruit trees. Since 2004, the area planted for these fruit trees were uprooted and replaced with the vines for wine. South African farmers are doubtful that the United States is a lucrative market because of the costs involved in selling to that market such as: exchange rates, transportation costs, as well as the export sanitary and phytosanitary protocol that are considered difficult to comply with.

On trade.....

Total apple, pear, and tablegrape exports in MY 2006/07 are expected to increase by 3.9 percent to 697,600 MT, due to improved total production. Post forecasts MY 2008 apple and pear exports to remain the same as a year earlier at 280,000 MT and 132,000. Post forecast MY 2008 forecasts for tablegrape exports are at 287,500 MT, a 0.7 percent increase from MY 2007 because of expected increased demand. Post estimates MY 2007 apple exports at 280,000 MT, a 4.5-percent increase from the previous year. In 2005/06, apple exports totaled 267,863 MT. Major export destinations were the U.K. (38.8 percent), Malaysia (9.7 percent), and the Netherlands (6.1 percent). Post estimates MY 2007 pear exports at 132,000 MT, a 11.8-percent increase from the previous year. In MY 2006, pear exports totaled 118,107 MT. Major export destinations were the U.K. (20.3 percent), the Netherlands (20.1 percent), and Belgium (12.4 percent). Post estimates MY 2007 tablegrape exports at 285,600 MT, a 0.2-percent increase from the previous year. In MY 2006, tablegrape exports totaled 284,903 MT. Major export destinations were the Netherlands (27 percent), Canada (24 percent), and the U.K.(16.6 percent).

Produce Traceability Initiative

Here are the just-released facts about the Produce Traceability Initiative. From a news release this morning. Developing....

Representatives of more than 30 companies from a broad cross section of the produce supply chain including retailers, foodservice buyers and produce suppliers have been appointed to serve on the steering committee of the Produce Traceability Initiative, an industry-led effort to enhance traceability throughout the supply chain. The initiative’s sponsor associations also announced today that the steering committee will be chaired by Cathy Green, chief operating officer of Food Lion, LLC.
The initiative was launched in October by Produce Marketing Association (PMA), Canadian Produce Marketing Association (CPMA), and United Fresh Produce Association (United Fresh).
The three trade associations came together earlier this year when the boards of directors of each organization recognized the need for greater progress in implementing a consistent whole-chain traceability solution. The steering committee will develop an action plan to help the industry meet this challenge, which may include promotion of industrywide traceability best practices, establishing timelines and goals for adoption, and a creating a validation process for accountability.

Participating companies currently confirmed to serve on the steering committee include:
* seven foodservice buyers: Amerifresh, Applebee’s International, Markon Cooperative, Inc., McDonald’s, Pro*Act, Sysco Corporation, U.S. Foodservice;
* nine retail buyers: Food Lion, H-E-B, W. Newell & Co. (Supervalu), The Kroger Co., Loblaws, Safeway Stores, Inc., Schnuck Markets, Inc., Wal-Mart Stores, Inc., Wegmans Food Markets; and
* 17 produce suppliers: AEPQ (Quebec Apple Packers), B.C. Tree Fruits Limited, Ballantine Produce Co., Inc., C.H. Robinson Worldwide, Inc., Dole Food Company, Inc., Domex Superfresh Growers, Driscoll’s, Duda Farm Fresh Foods, Inc., Fresh Express, Inc., Fresh Innovations, LLC., Frontera Produce, Ltd., Naturipe Farms, LLC., The Oppenheimer Group, Pandol Brothers, Inc., Ready Pac Produce, River Ranch Fresh Foods, LLC., and Tanimura & Antle.

The initiative’s sponsoring organizations have also invited other stakeholder associations representing key business segments of the North American food industry to participate, including Food Marketing Institute, Canadian Council of Grocery Distributors, Canadian Horticultural Council, International Foodservice Distributors Association, and National Restaurant Association.
The first meeting of the steering committee will be held Jan. 9, 2008, in Atlanta, Ga. The Perishables Group will act as the facilitator for the group’s meeting.

A common response

At 4:42 PM CST yesterday, from the email address of Amy Philpott of the United Fresh Produce Association, came this note addressed to the produce industry trade press:

“We want to provide you with a copy of a letter that is being sent this afternoon to the Food Safety Leadership Council on behalf of a wide cross-section of produce industry associations. This letter expresses the shared concerns of our organizations about recent communications received by many industry members requiring compliance with a new set of on-farm standards apparently developed by this group. While we are clear in stating our concerns, we are also committed to a positive dialogue with these industry partners. Food safety is a shared commitment and a shared responsibility across our total supply chain, and we look forward to working with all of our partners to ensure that together we are putting consumer safety first based on the best science and expert judgment available.”


Here is the letter:

November 14, 2007
Mr. Larry Kohl
Walt Disney World Co.
Food Safety & Health
PO Box 10000
Lake Buena Vista FL 32830-1000
Dear Mr. Kohl,
We understand that you help coordinate a group of company representatives that has prepared the attached Food Safety Leadership Council On-Farm Produce Standards. On behalf of the organizations shown below representing a wide cross section of the produce industry, we write to express our strongest concern about this document and its potential implementation, and ask that you share these concerns with all relevant parties. In recent days, many produce suppliers have received letters from Publix, Avendra LLC, and possibly others which state that their companies are members of the Food Safety Leadership Council FSLC) and go on to require suppliers to comply with the set of practices outlined in this ocument. It is unclear from this document exactly which companies are part of this effort, what legal and/or organizational structure exists for the FSLC, and what specific expectations may exist for your produce supply networks. The demands outlined in these individual companies’ letters and the content of the FSLC document present neither a scientific approach to enhance food safety nor a respect for the produce, retail and foodservice industries’ mutual commitment to deliver the safest possible fresh fruits and vegetables to our consumers everyday. As you know, we all share a commitment to providing consumers the safest possible foods, and we ask that you step back from this unilateral and unfounded direction to engage in a real scientific and professional dialogue with your produce suppliers, technical representatives from our industry’s trade associations, academia and government. Together, we should be engaged in mutual efforts to ensure an approach to food safety that can truly make a difference for our consumers, rather than focusing more concern on liability placement than actual sound,scientific and achievable food safety practices. Let us list several specific concerns with the FSLC document and approach.
1. Produce food safety demands a commodity-specific approach. While broad principles of risk prevention apply and are embodied in FDA’s Good Agricultural Practices (GAPs) for on-farm production, the specific standards and practices that should be employed for different commodities vary greatly. The FDA has directed industry to pursue commodity-specific GAPs as the best way to enhance produce safety overall, and huge strides have been made in addressing best practices for those commodities which have had recent linksto foodborne disease outbreaks. The FSLC document’s “one-size-fits-all” approach contains specifications that clearly should not apply to many commodities, and in fact, could be counter-productive in requiring growers to focus on the wrong things.
2. It appears that the FSLC document is based largely upon the approach industry has taken in preparation of Commodity Specific Food Safety Guidelines for the Production and Harvest of Lettuce and Leafy Greens, which were subsequently adopted as the metrics for compliance measurement under the California Leafy Greens Marketing Agreement. These standards have been developed and revised over several years with intense analysis of scientific issues, current research understanding, and production practices; and vetted extensively with industry, academic and government scientists. We believe this represents the current best practice standard for production of leafy greens. Both the National Restaurant Association and the Food Marketing Institute recognize the validity of these leafy greens food safety guidelines and support producers complying with these standards. Also,the Food and Drug Administration has reviewed these metrics, and never advised of any areas where they believe these are inadequate. Given that wide state of support for these best practices, FSLC members must be careful not to imply in any way that your approach would provide any higher level of safety than compliance with these industry standards. Our industry is committed to continuous improvement in food safety, and certainly expects to frequently revise best practices to incorporate the latest science and understanding of risk prevention strategies. We would be xtremely interested in discussing with you both the current best practice standards for leafy greens and the suggestions for production and testing that you have outlined in the FSLC document. But this must be a scientific discussion committed to mutual industry efforts to develop and agree on best practices to serve our consumers, not to create a bifurcated food safety system with different groups setting separate and unilateral
requirements.
3. On a practical level, you must know that some standards such as the water requirements outlined in the FSLC document cannot physically be achieved in many cases, even by world class producers. Perhaps you were thinking of a target for producers to strive for, but wthout further discussion, our best scientists just don’t understand what you have in mind. Similarly, some of the recommendations in your document are inherently based on opinion and judgment where science is insufficient, such as distance of production from animal grazing. Science today cannot tell us an exact distance, and we would therefore argue that expert consensus among industry, academia and government is the best way to address such unknown scientific questions until research can provide better evidence for risk-based decision-making. Otherwise, we are faced with an escalating, unscientific approach – if a 100-foot buffer is good; a 1,000-foot buffer must be better. Or why not 1,000 yards; or perhaps a mile, or two, or three. This is indeed a slippery slope without real science to guide these judgments. In conclusion, we respectfully urge FSLC members to reconsider your approach seeking to enforce the practices outlined in your document. We believe enforcing these practices would be inappropriate for many commodities, add unscientific and needless requirements to already existing best practice standards widely endorsed in the scientific community; could be counterproductive to produce safety in diverting attention from real issues; and would create an “us-against-them” food safety split in the produce supply chain. Perhaps that last point is our greatest risk, but one we should be able to avoid by working together. We know your companies well as industry leaders, and respect the fact that you want to do the very best for your customers in providing safe foods. Your produce suppliers share that unequivocal goal, and believe that we must work together as a total supply chain in order to fulfill our mutual objective of the safest possible produce. This issue cannot descend into an “us-against-them” fight or we all lose – we simply must work together to
bring wise, consistent, scientific and industrywide best practices to on-farm production, post-harvest handling and processing, distribution, retail and foodservice operations. No sector is exempt, and no one sector has all the answers. Mr. Kohl, please convey to your group our strong desire to engage in the earliest possible meeting to discuss these issues and ways we can work together for food safety. We will bring together scientific, technical and business representatives of our organizations and your produce suppliers to engage in dialogue to hopefully find a better course ahead that meets our shared goals for food safety. Please respond to Dr. David Gombas, senior vice president for food safety and technology, United Fresh Produce Association, as your primary contact in setting up a meeting and moving forward. Please also let David know if you have any questions or comments in the meantime. Thank you.
Sincerely,
American Mushroom Institute
California Avocado Commission
California Citrus Mutual
California Grape & Tree Fruit League
California Strawberry Commission
California Table Grape Commission
California Tomato Farmers
California Tree Fruit Agreement
Florida Fruit & Vegetable Association
Florida Tomato Exchange
Georgia Fruit and Vegetable Growers Association
Grower Shipper Association of Central California
National Potato Council
National Watermelon Association
New York Apple Association, Inc
Northwest Horticultural Council
Produce Marketing Association
Texas Citrus Mutual
Texas Produce Association
Texas Vegetable Association
United Fresh Produce Association
U.S. Apple Association
Western Growers


TK: One of the questions I submitted to Dwaine Stevens, the public relations contact at Publix, is whether Publix heard any direct response from individual suppliers on this issue. It wouldn't surprise me if they haven't. Certainly, Western Growers was helpful to their members and to the entire trade with its very public handling of supplier concerns about the FSLC on-farm standards. I don't think this follow up letter happens if WG hadn't started the ball rolling.

Meanwhile, we wonder who will be the voice of the FSLC. Will it be Publix, Disney, Wal-Mart or no one? Certainly it is disappointing to have the deafening silence from the group on these industry issues so far. How can the FSLC produce a document so strong without mounting a spirited defense?

More than the on-farm standards themselves - and there are very real technical concerns with those standards pointed out in the joint association letter - suppliers may feel put out about the FSLC "taking that tone" with them. For example, if I was writing the FSLC letter, I would have started it something like this:

Dear valued produce supplier,

We trust that produce safety and the well-being of consumers is your number one concern and we share that passion with you. As you know, we place great value on appropriate food safety standards at the farm level. We ask every supplier to detail their on farm food safety procedures they have in place. We conduct independent audits to check on compliance with stated standards.

In addition, now we are seeking your input on risk-based on farm food safety standards we have developed in conjunction with a group called the Food Safety Leadership Council.....

The Publix letter to suppliers can be seen here. Below are excerpts from the text of that letter. From the letter:

Please review these standards, together with the food safety procedures used by your firm, to ensure that you meet the standards required by Publix.

TK: As if that is as easy as a walk in the park....,Back to the letter:

It is our intention to utilize these FSLC On-Farm Produce Standards to evaluate vendor farms that provide produce to Publix. As a vendor, you agree by signing below to adhere to the standards.

TK: "And as a buyer, we agree to purchase only from FSLC approved farms". No, just kidding, those are my words. But if those words were in the letter, there may be no controversy here. Asking suppliers to conform to these "enhanced" standards without any reciprocal obligation by FSLC members may be galling to some suppliers. Again, back to the letter:

To assist us in maintaining the FSLC On-Farm Produce Standards, we request our supplier’s farms be inspected and audited for conformance to these standards by representatives of member companies of the FSLC, or designated inspection agencies that have been certified by the FSLC to conduct food safety audits. As a supplier to Publix, this standard will be verified through Primus and their good agricultural practice auditing program. This is not a new audit, but rather a standard to be verified by the auditing company.
By signing below, you acknowledge and agree to conduct and pay for an audit by an FSLC
certified auditor at least once per growing season. The results of any such inspection or audit will be shared among all members of the FSLC as a means to enhance consistent safety standards.

TK: By what authority do members of the FSLC share the results of any inspection or audit with all members of the FSLC? It is authority they appropriate themselves or does it exist in a formal organizational bond between members of the FSLC?

You further acknowledge that, regardless of the results of any audit, each FSLC member company will make its own independent purchasing decisions based on multiple factors which may be important to each such company in its sole discretion. Participation in the auditing process does not commit any FSLC member company to purchase products from your firm, and no such purchases may in fact occur.

TK: "Regardless of the results of any audit." Truly, "regardless"? What's the point of standards if they can be ignored for whatever reason? In fact, suppliers who are indeed committed to food safety will have on farm standards in place, "regardless" of the FSLC. The FSLC should be credited for appreciating the value of on farm food safety standards, but their blunt, if not heavy handed, approach has not been helpful. Perhaps the long term solution is a federal requirement for risk-based GAP standards at the farm level or common industry use of the GlobalGAP standard for suppliers.

A push to get AQI back to USDA

The Senate will probably get a chance to consider an amendment during the farm bill debate that would move AQI functions back to USDA. The drumbeat of support for the move is heard in this letter passed on by an industry lobbyist today:

November 5, 2007

The Honorable Tom Harkin
The Honorable Saxby Chambliss
United States Senate
Washington, DC 20510

Dear Chairman Harkin and Senator Chambliss:

The undersigned organizations write in strong support of restoring the Quarantine and Inspection functions now at the U.S. Department of Homeland Security (DHS) to the U.S. Department of Agriculture.

The 2003 transfer of inspectors previously dedicated to agricultural threats has proven to be unsuccessful. A May 2006 U.S. Government Accountability Office (GAO) report documented that detections at ports of entry have dropped dramatically while the threats have increased. Moreover, the GAO report found that only 21 percent of agricultural inspectors at DHS consistently received timely inspection alerts. In addition, a 2007 report from the Offices of Inspectors General for both DHS and USDA along with a recent investigation by the House Agriculture Committee and additional GAO reviews in 2006 and 2005 all found persistent problems.

Despite many assurances that performance will improve, the problems continue and lead us to conclude that improvement is not possible in the current structure. The threat of pests and disease is too great for us to continue to wait, particularly since the USDA program had an excellent track record. A 2004 Cornell study showed that invasive species cost U.S. agriculture $120 billion annually and continued delay in addressing this issue will only increase these costs.

We resolutely support the DHS’ statutory mission to protect us from terrorist attack and reduce our vulnerability to such threats. Restoring agricultural functions to USDA will simultaneously improve the detection of agricultural risks while permitting those charged with our overall security to focus on their mission that is of the greatest importance.

To protect American agriculture and our natural environment, we urge you to support the transfer of the Agricultural Quarantine and Inspection functions and restore our confidence in this important safeguard.

Sincerely,

American Beekeeping Federation
American Farm Bureau Federation
American Feed Industry Association
American Mushroom Institute
American Nursery and Landscape Association
American Sheep Industry Association
American Society for Horticultural Science
Association of Floriculture Professionals
Cherry Marketing Institute
National Association of State Departments of Agriculture
National Association of Wheat Growers
National Chicken Council
National Council of Farmer Cooperatives
National Farmers Union
National Milk Producers Federation
National Pork Producers Council
National Potato Council
National Watermelon Association
Nectarine Administrative Committee
Peach Commodity Committee
Produce Marketing Association
Society of American Florists
United Egg Producers
United Fresh Produce Association
U.S. Apple Association
Winegrape Growers of America
Blue Diamond Growers
CalCot Ltd.
California Association of Nurseries and Garden Centers
California Association of Wheat Growers
California Association of Winegrape Growers
California Avocado Commission
California Citrus Mutual
California Fresh Fig Growers Association
California Grape and Tree Fruit League
California Plum Marketing Board
California Strawberry Commission
California Table Grape Commission
California Tree Fruit Agreements
California Tree Fruit Marketing Board
Empire State Potato Growers, Inc.
Florida Citrus Mutual
Florida Citrus Packers Association
Florida Department of Agriculture and Consumer Services
Florida Fruit and Vegetable Association
Florida Strawberry Growers Association
Georgia Fruit and Vegetable Growers Association
Hawaii Farm Bureau Federation
Holly Tree Farm
Idaho Grower-Shipper Association
Idaho Potato Commission
Indian River Citrus League
Maine Potato Board
Miami-Dade County
Michigan Apple Committee
Michigan Agri-Business Association
Michigan Bean Shippers Association
Muddy Lake Cattle Company
New York Wine & Grape Foundation
North Carolina Wine & Grape Council
Northern Plains Potato Growers Association
Northwest Horticultural Council
Ohio Apple Growers
Ohio Wine Producers Association
Oregon Potato Commission
Pennsylvania Chapter of the National Farmers Organization
Pennsylvania Department of Agriculture
Pennsylvania Farm Bureau
Pennsylvania Farmers Union
Pennsylvania Landscape and Nursery Association
Pennsylvania Vegetable Growers Association
Peace River Valley Citrus Growers Association
Potato Growers of Idaho
South East Dairy Farmers Association
Sunkist Growers
Sun-Maid Growers of California
Texas Citrus Mutual
Texas Produce Association
Texas Wine and Grape Growers Association
Virginia Apple Growers Association
Washington Apple Commission
Washington State Potato Commission
Western Growers Association
Western United Dairymen
WineAmerica
Wine Association of Georgia
Winegrowers Association of Georgia

Apple fries

David Mitchell of The Packer passes on this interesting link about BK's new Apple Fries.

From the story in Ad Age:

Are America's kids ready for apple fries? As Burger King becomes the latest fast feeder to join the Better Business Bureau's Children's Food and Beverage Advertising Initiative, it's introducing a new product: raw apples cut to look like french fries and served in a box that it calls the Frypod. The catch is, they aren't fried and there's no sugar added.

We think kids will flock to it," said Burger King spokesman Keva Silversmith. To devise the product, Burger King developed a proprietary cutting process that makes apple slices look like fries. Then they're washed in water with lemon, to keep from turning brown. In addition to the new product, the chain agreed to limit its advertising to children under 12. The company will push to young kids only meals that have fewer than 560 calories and only meals that derive less than 30% of their calories from fat. The marketer spent $285 million in advertising last year. Also on the way are new kids' meals. This fall, Burger King will begin testing a kids' meal that swaps fried, crown-shaped chicken tenders for flame-broiled ones, and Mott's apple sauce with the organic, no-sugar-added variety. It will also include Hershey's 1% fat chocolate milk instead of a soda. The new products are expected to be in Burger King locations nationwide by late 2008. Burger King becomes the 12th company in recent months to pledge restrictions on advertising to children, focusing on better-for-you foods. Cadbury Adams, Campbell, Coca-Cola, General Mills, Hershey, Kellogg's, Kraft, Mars, McDonald's, Pepsi and Unilever have already signed on. Kids' meal face liftThe Burger King announcement may signal the end for the traditional kids' meal, which has long been comprised of a burger or nuggets, fries and a soda. While Wendy's hasn't joined the advertising initiative, its kids' meal is a turkey-and-cheese sandwich, yogurt with granola, and low-fat milk. McDonald's will be the only of the three to offer fried food in a kids' meal, by way of its chicken McNuggets. Elaine Kolish, director of the Initiative, praised Burger King's pledge. "As one of the major restaurant chains in the country, they're a noted children's advertiser, so having them is a great addition," she said. "Previously, we only had one children's quick-serve restaurant, McDonald's, so we're delighted to have Burger King join us."

TK: Another piece of good news for the apple industry. I wonder how the apple slices will be packaged before they are put in the "frypod." In bulk bags, most likely, so it might entail a little more labor and possibility for mishandling than a consumer poly bag. On the subject of the gains in fresh apple slices, here is an audio link to a speech by Tony Freytag, the director of marketing for Cashmere, Wash.-based Crunch Pak, at the August U.S. Apple Association Outlook and Marketing Conference.

Reds down but not out

The US Apple Association reports that gala variety apple production will narrowly edge golden delicious for the second straight year as the No. 2 apple variety. Of course, goldens have owned the runner up spot to red delicious for many years. U.S.red delicious production for this year is forecast at almost double gala - 53 million cartons compared with 28 million cartons - but reds are down a whopping 10 million cartons from a year ago.

Halo of local v. organic

Local produce or organic produce - which has the stronger pull on the consumer? Don Harris, vice president of produce and floral for Wild Oats Markets Inc., Boulder, Colo. addressed the Aug. 24 session of the U.S. Apple Association in Chicago. After his presentation on organics at retail (covered separately for The Packer), Harris entertained a few questions from the crowd.

One the questions addressed the appeal of local versus organic produce. Particularly, how does Wild Oats weigh the appeal of organic produce from another state compared with locally grown conventional produce?

Interestingly, Harris said the stronger "halo" effect is often all about local produce.
"We would stay with the local (deal) till it is done and go to the other; we find local conventional produce has a better halo effect than organic from another area," Harris said. "The magic is to have organic and local."

I asked Don if Wild Oats uses loyalty cards.

As an aside, I have mixed feelings about loyalty cards. I enjoy not having to use a loyalty card, but of course if you comparison shop at some supermarkets you are compelled to pick up shopper or loyalty cards or feel the pain in your wallet. Thus, I have three "loyalty" cards.

Back to Don. He said Wild Oats issued loyalty cards to their shoppers about three years ago, and 58% of those who received them mailed them back. "It was an invasion of privacy to some of them," he said. Perhaps it relates to the old "hippie" ways of anti-establishment, but for whatever reason, Wild Oats shoppers have generally not been receptive to the idea.

"Some sent the cards back whole, some in pieces and some with colorful phrases and metaphors," Harris said with a smile. He noted Whole Food also reportedly found only spotty acceptance when they have attempted loyalty cards.

Don had a meaty, statistic-filled presentation to the U.S. Apple Outlook conference, and provided the kind of buyer to supplier input that every grower meeting should strive to secure.