May 24, 2007
TO: PTNPA Active and Associate MembersFROM: Russell E. Barker, President & CEOSUBJECT: Watching for Iffy Imports
Skimpy U.S. Inspection Resources Are Raising Concerns
Tainted food imports from China have stirred anxiety among U.S. consumers, but how safe is the food sent here by other countries?
It's a complicated picture, made even more so because the amount of food we get from outside the United States is increasing rapidly. From 2002 to 2006, the value of China's food exports to the United States -- agricultural products plus seafood -- more than doubled, from $2.7 billion to $6.1 billion, according to the U.S. Department of Agriculture. During that same period, total food imports to this country rose from $42 billion to $65 billion.
In a perfect world, exporting countries would carefully watch for hazards, and the United States would have a good system of safety backups.
As a rule, more-developed countries such as Japan, Canada and the 27 members of the European Union have strict inspection procedures akin to those in the United States, as does Mexico, a North American Free Trade Agreement partner, a USDA spokesman said.
But countries in Asia and Latin America were accused of importing potentially risky farm-raised seafood in a report last month by the consumer advocacy group Food and Water Watch. Titled "Import Alert," the report stated that many fish farms in those regions control fish disease and parasites with antibiotics and chemicals that leave residues and are banned in the United States. The group said the Food and Drug Administration's inspections of imported fish are lax.
No one has a country-by-country scorecard. In interviews, experts suggested that imported-food safety is a crapshoot because no country can examine every batch of every product. What's more, when bacteria contaminate a crop or production lot -- as with California spinach last year -- only part of the output is affected. Then, too, many people can eat bad food and not get sick.
The USDA maintains strict controls over imports of meat, poultry and eggs, requiring that all importing countries have inspection systems equivalent to ours. That equivalency is determined through a lengthy process of reports, overseas inspections and audits, said Karen Stuck, an assistant administrator in the USDA Food Safety and Inspection Service's Office of International Affairs.
"Next, the country has to tell us which individual plants are operating at an equivalent level to the U.S.," she said. After those plants are certified, the USDA "will certify each individual shipment as eligible to enter the U.S."
The USDA also has inspectors at ports of entry examining shipments and documents, Stuck said, and agency workers visit foreign countries for annual on-site audits. For fruits and other commodities prone to insect infestation, the USDA requires shippers in all countries or their American importers to obtain permits that force compliance with certain conditions -- for example, the use of methods such as irradiation to eliminate weevils in mangoes grown in India.
Foods other than meat, poultry and eggs fall under the FDA's purview. When one of those items arrives at a U.S. port or border, it must come from a facility registered with the agency. The sender must provide details about the type of product, origin, destination and more. On the basis of that data, the FDA decides whether to allow or refuse the merchandise. Reasons for refusal can include mislabeling, filth, pesticide residues and harmful bacteria. At present, any plant-related food originating in China is being detained until the agency receives test results from an independent laboratory showing that the product meets U.S. standards.
The FDA inspects very few of the shipments subject to its review: fewer than 1 percent in 2006, and that level is shrinking. It was 1.5 percent in 1997 and is predicted to fall to 0.7 percent this year. That's because while import volume is growing, the staff of inspectors is not, a spokesman explained.
The agency rarely visits other countries to inspect plants or products. David Acheson, the FDA's newly appointed assistant commissioner for food protection, said the agency "dispatches teams to foreign countries when there is a problem." To illustrate, he said: "We sent inspectors to China. We had three people there for a couple of weeks. We have had teams in Mexico dealing with cantaloupes and salmonella. We have had teams in Italy because of botulinum toxin in olives."
Acheson said that in his new job, created in response to the recent incidents of contaminated domestic and foreign food, he is developing an "integrated" food safety plan that would consolidate work now scattered among different offices and put strong emphasis on prevention.
The FDA cannot emulate the USDA's equivalency requirements, Acheson said. "It is difficult to demonstrate what is equivalent for all the products FDA regulates. Often in foreign countries, products may be under different agencies, so we have to work with different agencies in any given country."
The FDA's skimpy resources for its food inspection duties have spurred industry and consumer advocates to press Congress to give the agency more money. Given the China situation, "maybe Congress will believe us," said Jenny Scott, a vice president for the Food Products Association trade group.

Commodity Watch Monday, June 25, 2007 -->
Cashews Update

Strong Re worries cashew exportersCommodities BureauKochi, Jun 24 Cashew exporters with huge inventory of raw cashew kernel are worried over the strengthening rupee as export realisation drops. The exporters who imported raw cashew for a higher price are now pinning their hopes on the strong domestic appetite for premium cashew to square off their account books, traders said.
India imports raw cashew kernel from African countries and re-exports it after processing, with the process taking about three months. “The appreciation of the rupee by 10-12% in just about a month has taken its toll on some importers who are now wary of entering into contracts,” said Pratap Nair, an exporter, Vijayalakshmi Cashews.
“Exporters with firm commitment have to ship facing losses,” he added. India’s export earning from cashew slipped by 5.73% in April-May compared with same period a year ago while quantity of exports rose slightly to 28,574 tonne as against 28,543 tonne in same period.
Average export earning slipping to Rs 193 per kg compared with Rs 208.50 in the same period a year ago is a key factor for fall in export value, a trader said. Traders are now hoping that the industry will achieve parity with price of raw cashew kernel falling due to the appreciating rupee and increased supply in the African nations. Import of raw cashew nuts for processing and re-export rose to 124,155 tonne from 120,179 tonne and the average price of raw cashew nut has fallen to Rs 27.19 from Rs 31.42. Demand from the US market is likely to firm up in the coming days, as the buyers are in short position, a trader said. The demand is firm but competition from Vietnam and other tree nuts such as almonds restrain the price, he added. India exported 1,18,540 tonne of cashew valued at Rs 2455.15 crore in FY06-07 while it managed to get Rs 2514.86 crore in 2005-06 for exporting 1,14,143 tonne.


URL: http://www.financialexpress.com/fe_full_story.php?content_id=168092

Court sides with Pistachio Commission, reverses injunction
SAN FRANCISCO June 8, 2007 11:01am
• Says Paramount Farms unconvincing in its arguments
• Paramount’s ire centers around commission’s marketing The California Pistachio Commission got a new lease on life Friday when the 9th U.S. Circuit Court of Appeals reversed a temporary injunction stopping it from collecting fees from growers.
A group of pistachio growers, led by the largest pistachio company in the nation, Paramount Land Company and its related units, challenged the marketing and promotional activities of the Pistachio Commission. Paramount argued that the annual subsidies mandated by the California Pistachio Act of 1980 constitute compelled speech in violation of the First Amendment.
“Although Paramount has raised the specter of irreparable injury by bringing a colorable First Amendment claim, its showing with respect to the merits is insufficient to sustain an injunction. We reverse the judgment of the district court and vacate the injunction,” the appeals court says in its ruling.
The Pistachio Commission has been under a lower court preliminary injunction forbidding it from collecting and using the challenged assessments until the litigation is resolved.
Paramount and its various affiliated entities together pay between 25 percent and 30 percent of the Pistachio Commission’s total assessments.
But the farming giant says the commission’s marketing has not specifically benefited its brand of nuts.
“The expressive activity that has attracted Paramount’s ire centers around generic print and public relations advertising campaigns for California pistachios,” the court notes. “Paramount maintains that these campaigns are ‘ineffective in augmenting pistachio sales,’ ‘do not adequately feature the nuts themselves,’ and are ‘antithetical to Paramount’s interests,’ which are to ‘increase sales by differentiating its products from competitor’s products,’” the court says.
Paramount also finds fault with the Pistachio Commission’s government relations activities, which are coordinated by a political consultant who hires lawyers to represent the industry before the International Trade Commission and the Commerce Department, and to lobby government entities on behalf of the pistachio industry. Paramount complains that the commission has “not done enough to protect the domestic pistachio industry from foreign pistachios,” the judges note in their review of the arguments.
In reversing the district court’s action, the appeals court says it applied its long-standing requirements that a preliminary injunction is warranted where plaintiffs demonstrate either a likelihood of success on the merits and the possibility of irreparable injury; or serious questions going to the merits and a balance of hardships strongly favoring the plaintiffs – things Paramount did not do, the court says.
Growers in the Central Valley produce virtually all of the domestically-grown pistachios in the nation.

Dear Friends:

Almond prices have drifted down .30/lb for both 2006 and 2007 crops in the past 2 months, most of it since the subjective crop estimate of 1.31 billion lbs a month ago. Market has been quiet so prices are not well defined even today. 2007 crops came down to about a level of USD 1.70 for Std -- what Calif suppliers have been willing to offer. There were occasional trades lower than that but most suppliers refused to sell below that level and sales mostly came to a stop. Buyers continue to bid and request new crop contracts, but sellers seem to be .05 to .10/lb apart. In the case of 2006 crop, sales continued but at steadily lower levels because of the motivation of sellers to reduce inventories before the lower priced 2007 crop is harvested. In fact, 2006 prices are coming closer to 2007 prices than they were 2 months ago—the differential has gone from .40 to .50 range down to the .25 to .30 range.

May shipments were 77 mil—3 mil off from last year’s record 80 mil. 2006 crop shipments to date are still at a record level and will finish at about 1.05 billion lbs and leave a carry out of about 150 mil—similar to recent years. For next year, however, we expect a 10% increase in shipments, leaving over 250 million carry out for July 31, 2008. I have been saying for years that the industry needs this level to maintain supply continuity to buyers during the crop year transitions, AND to moderate price fluctuations that have hurt suppliers as well as users in the past years. The extra carry over will be a challenge to the 60+ commercial sized processors and their growers to be patient and willing to carry a 12 month inventory.


USA, Canada & Mexico almond buyers need to decide if they want to become a “DV User” and certify that they do their own pasteurizing. It is not worth the trouble unless you pasteurize a large volume by blanching, oil roasting, moist heat treatment or PPO fumigation. You may also need to keep separate inventories of pasteurized and unpasteurized almonds. First step is to identify a “process authority” or microbiologist that can validate your process. He or she can be approved by the Almond Board quickly. Next you will need to appoint a process auditor to check documentation of pasteurization & product flow. Again, this person or organization will need to be approved by the ABC. All starts Sept 1. If you want to keep it simple, buy pasteurized almonds at an extra cost of .05 to .07 negotiated with your supplier. Call me if you have questions about the program and visit http://www.almondboard.com/ . Other advice: If you order LTL quantities, plan on more lead time so your supplier can have pasteurized product available.

California Almond Handlers need to get on the VASP for aflatoxin sampling. Yes, it’s a bit of a mess and we don’t know yet how uniformly the new EU procedures will be applied, but we may as well get it started and figure it out—that’s what we Californians are good at! Be sure to sign up and attend the annual FQS Symposium in Modesto on June 20.

Best regards, Ned

Ned T. Ryan

Current Peanut Situation
How did we get here.......Firstly we have an ethanol erection in the USA which convinced us to plant more SE corn acres on good, irrigated peanut land and we put more peanut land into dryland acres. Then we decreased peanut plantings to plant more corn and cotton and now, we have delayed planting our dryland acres hoping for enough rain to soften soil and allow balance of crop plantings. Here we are at the end of May and farmers must plant NOW in order to qualify for crop insurance....and still no rain. A further worry is that some farmers will plant strictly for insurance only and thus instead of planting 160LBS of seed per acre may plant just 50 or 60 LBS and decrease input costs in order to limit expenses and not throw good money after bad. Obviously this would severely cut dryland acre yields and even if the rains do come later, yields are adversely affected in the SE. Wow, what a mess.Condition of the USA crop is mixed. SW and V-C is OK, but the SE is the real problem. The drought conditions in Georgia are the worst in 50 years. Of 159 counties in the state, last week 74 were rated in extreme drought and 79 in severe drought. Our irrigated crop in the SE is planted and getting at least 13$ per acre costings of water every week and concerns are that irrigation ponds are being drained and we still have all Summer to water. One farmer last week mentioned he had already watered 5 times this year (5 X 13$ per inch of water=65$ per acre extra cost) so far as opposed to none this time last year. Farmers are not interested in contracting 2007 crop with the sheller so the market is at a standstill with no sellers. Lets look at numbers and make a very conservative estimate.....................if we look at dryland acres in Ga(65%), Fla(70%) and Ala(95%) and calculate vrs. planted acres 2007 crop estimate in these states we are at 780,000 planted with 553,000 dry and 227,000 irrigated. Plug in 2006 yield on irrigated acres for these 3 states(2874LBS per acre) and lets just conservatively deduct 25% yields on dryland this year we come up with 922,198,075 tons SE short tons produced. Add balance of States at 2007 projected acres and last year yield comes to 528,816 ST for total USA crop of 1.451 short tons vrs. 1.737 last year( decrease of 16.5% from last years crop which was the smallest since 1930.) Now you see why we have no sellers and I think my numbers could be high. Dont forget with seed needs, the USA needs 1.7 just for domestic usage, so we leave nothing for Europe to buy and possibly open up the USA to imports from other origins.We are in a new era in World supply vrs. demand for peanuts. In 2 years we have gone from surplus to deficit for world needs. Argentina will supply Europe because the USA cannot and China will grow a huge crop, but use most of it internally. I look for firm markets to continue for at least 18 months or more.
Hope this does not confuse you even more.
Stewart Parnell

Ocean Spray May Have More To Lose Than Lawsuit
Jim Prevor's Perishable Pundit, June 8, 2007
The Chicago Tribune picked up on the Pundit’s coverage of the Ocean Spray controversy and mentioned the lawsuit between the Nolans and Ocean Spray in a piece discussing the Robinson-Patman Act, entitled Why it’s all in the packaging.
The question of the efficacy of the Robinson-Patman Act in producing lower prices for consumers is an interesting one, but we suspect this reporter’s claim that the reason warehouse clubs carry larger package sizes is to avoid Robinson-Patman isn’t often true. The nature of the warehouse club business model, where margins are so low, favors selling products in larger volumes and thus generating fewer expenses per unit handled.
The interesting thing about this case, though, is that though nominally a Robinson-Patman case, it really speaks to different issues. The Chicago Tribune article explains:
Chris Phillips, a spokesman for Lakeville-Middleboro, Mass.-based Ocean Spray, said: “This case has nothing to do with our competitive practices which abide with all laws and standards. It is a case of a disappointed former employee whose contract was not renewed,” he said
He was unwilling, however, to discuss the company’s marketing practices outlined in the case
Prevor said he was fascinated by the suit’s depiction of the cutthroat nature of competition and what it means for business ethics.
“You just can’t favor one customer over another when you are selling the same item and maintain any customer loyalty,” he said.
Mr. Phillips is correct that the proximate cause of the lawsuit is a disappointed former employee and a disappointed former contractor to Ocean Spray electing to file the lawsuit. This is both true and obvious. This is also why all business operators who do business in our litigious society know that it is a good idea to do all you can to have employees who leave your organization leave on good terms.
The bigger issue, though, is whether the allegations made by the Nolans are true. If they are true, we can’t imagine one person or organization that Ocean Spray does business with that would care less if the Robinson-Patman Act was violated or not.
Here are the big produce-relevant issues:
Did Ocean Spray provide a better price to Costco than to Sam’s Club or BJs?
Did Ocean Spray provide H.E. Butt better prices than competitive retailers in Texas, such as Wal-Mart, Kroger, Safeway, etc.
Did Ocean Spray treat its growers unfairly and violate the PACA? For example, how did Ocean Spray decide who got credit for a high priced sale to Sam’s Club and a low priced sale to Costco? Did Ocean Spray urge and allow C&S to claim “bad quality” on fruit Ocean Spray knew was in good condition — and did this impact grower returns? Did Ocean Spray offer deals to Costco and H.E. Butt on fresh product to assist with the marketing of processed product — and did this impact grower returns?
Did Ocean Spray publish official price lists and then not follow them, thus deceiving its best and most loyal customers into believing that everyone was paying the same price?
Did Ocean Spray expect employees to lie or to fail to disclose to customers that competitors were receiving special treatment?
Even if it turned out that the Nolans were dismissed in accordance with the law, it strikes us that the industry would still demand answers to these five questions and Mr. Phillips’ unwillingness to “discuss the company’s marketing practices” will not stand.
There is a quick way that might resolve all this without a trial. When this situation started to heat up, Ocean Spray commissioned a special investigation conducted by a big-time law firm.
If Ocean Spray had retained a management consulting firm to do the investigation, the results of the report would already be public record through the lawsuit. But because Ocean Spray had a law firm write the report, it can claim attorney-client privilege and refuse to reveal the findings.
Yet, clearly, in an issue that has caused such controversy it would behoove Ocean Spray to clear its name by waiving attorney-client privilege and making public the results of the report.
It seems doubtful that growers and retailers alike, all of whom are being denied access to this document, are going to conclude that it exonerates Ocean Spray. That may be unfair but, by simply publishing the report, Ocean Spray could reassure the industry that it is being upfront about this entire matter.
You can find a continuously updated “hot topic” summary of our writings on this lawsuit right here.

Looking forward to A 1.3 billion crop
Record almond crop expected in California
By OLIVIA MUNOZ Associated Press WriterNews Fuze
Article Launched:05/31/2007 02:25:35 PM PDT
LIVINGSTON, Calif.- They may have started as a few pet trees planted by Spanish missionaries, but almonds are now a big, big crop in California, where ideal climate and irrigation have let the nuts bloom into a $2 billion a year business.
On Scott Hunter's farm in the hot, fertile San Joaquin Valley, the limbs on some of the younger trees are having a hard time holding up what he predicts will be part of "a once-in-a-lifetime type of crop" when the harvest begins in mid-August.
"Like any ag commodity, we've been faced with a lot of ups and downs," said Hunter, 37, who farms 1,200 acres of almonds in Livingston. "This year is definitely an up."
The record harvest, along with more growers dedicating acreage to almonds, is expected to solidify California's position as the world's leading producer of a crop that once grew wild in Mediterranean countries. The state already produces 80 percent of the almonds sold worldwide.
The U.S. Department of Agriculture predicts growers will harvest more than 1.3 billion pounds this year, a 17 percent jump from the 1.12 billion pounds harvested last year. Just a decade ago, the state's almond trees yielded 759 million pounds.
The predicted almond boom is due to a mix of auspicious conditions: a strong market, a spring bloom that went well despite a mysterious illness that killed bees used during pollination, and favorable weather for the crop, which thrives in Central Valley soil from Bakersfield to Chico.
"There aren't a lot of places in the world where you can grow almonds. We have a unique situation here in that the climate is good and we have the water system that has made it possible," said Bruce Lampinen, a nut specialist with the University of California's Cooperative Extension in Davis.
As almonds have become more popular with health-conscious consumers, growers have banded together under the Almond Board of California, a marketing group made up of most of the state's 6,000 almond farmers.
The board has sponsored health research for many years and in 2002 successfully petitioned the U.S. Food and Drug Administration for the right to promote the claim that almonds help with long-term weight loss.
It's become a powerful agency that has helped make the almond the "it" nut by publishing glossy advertisements in women's magazines and pushing hard into foreign markets, said Marsha Venable, spokeswoman for the board. Export targets include countries like India and China where the nuts already are a familiar food.
In the United States, companies already offer prepackaged almonds flavored, seasoned, roasted and raw to appeal to a variety of tastes.
"They're no longer just considered for desserts and pastries. They're on menus, they're a snack," Venable said.
The nuts' popularity has some growers worried about a saturated market that could drive prices down—but not Hunter, who said he sees the almond market as ever-expanding.
"Even though we're producing more, we're also shipping more. The market is there," Hunter said. "We once feared having a billion-pound crop, but now look at us."
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On the Net:
Almond Board of California: http://www.almondboard.com