|Issue of the Day Archive for the ‘Food Supply’ Category|
The impact of the A(H1N1) influenza or “swine flu” has not been as negative as some analysts had predicted, according to the analysis of the US Department of Agriculture statistics by the US Meat Export Federation. After the announcement of the presence of H1N1’s vector/host — swine — some countries either fully or partially closed to U.S. pork during May, and a few markets like China remain closed today. This is in part only due to the diligent work to dispel misinformation that attempted to connect pork consumption with A(H1N1) influenza and ensure trade policies remained science-based.
The analysis of USDA data by USMEF states that US beef exports between January – May of 2009 remain on par with 2008, yet pork is down substantially at 24% in value and 27% in volume compared to 2008. The global recession has had a varied impact on the meat market, yet the beef export market is holding steady at 1% increase in volume and 3% decline in value compared to the same period in 2008. Individual markets have varied as much as an increase of 86% in volume and 124% in value for Vietnam and a decrease of 38% in volume and 32% in value for the Philippines.
USDA Announces Initiative to Increase Organic Farmland, Reduce Pesticides
Published Wednesday, July 22nd, 2009 by Lacey Loftin
The Agriculture Deputy Secretary Kathleen Merrigan announced in May a $50 million initiative from the American Recovery and Reinvestment Act 2009 — a part of the Environmental Quality Incentives Program (EQIP) — to encourage more organic agriculture production. The aim is to make organic producers eligible to compete for EQIP financial assistance. Under the organic initiative, the required minimum core conservation practices including conservation crop rotation, cover crop, nutrient management, pest management, prescribed grazing, and forage harvest management. Applications will be accepted from producers and those in transition from non-organic production. To help with eligibility, there are two separate national screening tools for applicants — one for certified and one for newcomers. The 2009 organic initiative will be administered by the Natural Resources Conservation Service.
Organic farmland has grown very quickly to acquire a market of $46 billion, encompassing 30 million hectares, which is 0.8% of the world’s farmland. The agriculture methods employed by organic farmers include minimizing pesticides, nutrient runoff, excessive water usage, and assorted other problems. A major concern is the use of pesticides; the US uses over one billion tons of pesticide products each year. EPA, in its efforts to make agriculture safer, is promoting safer pesticides and reducing risks through the re-registration process. Plus, EPA is expediting approval of safer pesticides with special protections for infants and children.
Despite the increasing trend of organic and green living, the growth of organic food consumption has slowed after years of explosive annual growth, especially for dairy organic farms. Many farms are seeing a 50% drop in organic milk sales this year from 12.7% in 2008 to about 6% this year according to the Organic Trade Association. According to the US Department of Agriculture, sales of organic whole milk were down 2.5% in February from last February; organic reduced-fat milk is worse at 15% below last year. This makes it more difficult for farmers to recoup the investment from the conversion cost of going organic from conventional farming, which can run into the $500,000 range per farm. State governments responding to the drop in sales have passed bills to increase the amount of raw milk a farmer can sell to the public versus the conventional processors in an effort to ease the financial loses. This comes just after the USDA awarded $50 million in funding for organic food production.
Overall farmland use has been reducing from 9 to 20% annually since 2000. Organic foods have experienced a remarkable upswing in sales over the last decade from near 60 million pounds of organic milk to 150 million pounds at the end of last year. This fed the growing number of organic farmland, especially after 2003 where in 2 years the number of organic pastureland and rangeland tripled from 745,000 acres to 2,331,000 acres in 2005.
According to the Bureau of Labor Statistics, Americans spend on average 12.5% of their budgets on food each year, yet still many find their access to food is shrinking. The price of food is closely related to the initial cost of that food’s ingredients, the energy to create the food, and the fuel to transport the product to market. The nonpartisan Congressional Budget Office stated that increased use of ethanol accounted for about 10% to 15% of the rise in food prices between April 2007 and April 2008. According to the Consumer Price Index, the average cost of food rose 5.9% last year as food companies wanted to protect their profit margins. Accordingly, overall food prices rose by 0.3% in April compared with the previous month yet they are still 3.7% lower than they were a year earlier.
Prices for fruits and vegetables also reacted to production costs as vegetables rose 1.4%, yet fruit higher demand offset energy costs, causing prices to fall 3%. Products that rely on biofuels products like corn and wheat rose 7.4%. Meat products, such as beef and pork, chickens and eggs have increased in price; where as dairy products, such as milk, as a whole have decreased 3.1% over last year’s prices. Much of this can be explained by the farm acreage that is utilized by biofuels production and the lower numbers of livestock operations. Another added expense to the prices of food stuffs is the ever increasing price for farm foods packaging.
Governor Schwarzenegger’s Low Carbon Fuel Standard, which calls for a 10% reduction of greenhouse gas emissions by 2020, has been adopted by California’s Air Resources Board. According to the Board, the regulation aims to increase the market for alternative-fuel vehicles and achieve 16 million metric tons of greenhouse gas emission reductions by 2020. This is a regulation under California’s Global Warming Solutions Act. The regulation means that fuel providers must prove that their California fuels meet an average declining standard of “Carbon Intensity.” Intensity is a figure related to the sum of greenhouse gas emissions associated with the production, transportation and consumption of a specific fuel. California’s regulation efforts have come under fire from those who claim the new regulation will indirectly affect land use changes that further inflate grain prices and reduce forests. This move comes ahead of the Major Economies Forum on Energy and Climate, to which President Obama has invited the 16 states with the highest emissions of greenhouse gases.
The total summary of on-road alternative fuel and hybrid vehicles has Ethanol (E85) far surpassing all other fuels, which have remained flat (Compressed Natural Gas, Liquefied Natural Gas, and Hydrogen) or have reduced (Liquefied Petroleum Gas). The price of a bushel of wheat, a growing Alternative Fuel ingredient, has skyrocketed from $3.42 in 2005 to $6.65 in 2007. A bushel of corn, the main ingredient in ethanol, has also doubled from $2.00 in 2005 to $4.00 in 2007.
The 2010 Federal Budget has caused some concern over its $3.6 trillion price tag and some of its reforms. The new budget has called for some farm reforms that have spurred debate on both sides of the Hill. One of the main contentions is that the budget “supports the implementation of a $250,000 commodity program payment limit. The payment limit will help ensure that payments are made to those who most need them.” This program targets farm programs to family farmers and provides the stability and predictability against market disruptions and weather disasters. Moreover, the President wants to transition large farms from direct payments to increased income from revenue derived from emerging environmental services. The President will phase out direct payments over 3 years to farmers with sales revenue over $500,000.
Currently, direct payments of farm subsidies are made to even large producers regardless of crop prices, losses, or whether the land is still under production. The total cost of farm subsidies in current dollars over the last 40 years is somewhere in the neighborhood of $140 billion. This current reform has stemmed from the fact that 10% of all who received farm subsidies received 72 % of all payments made between 1996-present. Accordingly, only 13 states are awarded Farm Subsidies between $5 and $14.9 billion out of the $140 billion total.
President Obama announced new leadership and other changes to focus on improving the safety of the United States food supply. In his weekly address to the nation, President Obama designated the former New York City health chief Margret Hamburg to be the new Food and Drug Administration Commissioner and stated that he planed on creating a “Food Safety Group” to recommend ways to “upgrade our food safety laws for the 21st Century.” In accordance, the Agriculture Department stated that it is moving ahead with the rule to ban all diseased cattle from entering the food supply. This ban was stalled under the Bush administration. These changes come after a series of high-profile and fatal outbreaks, including salmonella that led to nine deaths in recent months.
According to the Centers for Disease Control’s new Foodnet, outbreaks from contaminated food cause approximately 76 million illnesses, 325,000 hospitalizations, and 5,000 deaths in the United States each year. President Obama added that 95% of the nation’s 150,000 food processing plants go without inspection. To shore up much of the lack of attention, the President’s budget is proposing an extra $1 billion for more manpower, improved labs, and other inprovements at the FDA.
According to the Commerce Department’s Bureau of Economic Analysis, consumer spending on food fell an inflation-adjusted 3.7% from the third quarter of 2008. This is the steepest decline in 62 years of analysis based on receipts from a variety of food-oriented businesses across the country. Consumers are trading down from specialty foods to lower priced items, rooting through pantries for staples, and forgoing restaurants; all are adding to the decline. According to the Private label Manufactures Association, the U.S. sales of private-label food rose 10% in 2008 from 2007; concurrently, branded food products saw sales rise 2.8%.
Also on the rise is the use of fast food restaurants, who absorbed much of the higher ingredient costs to keep much of its menu items near $1. With prices for supermarket food surging higher, the fast food industry has made its products more of a bargain than before, attracting ever more people to their table. For example, McDonald’s has reported that same-store sales rose 7.1% in January, 5.4% in the U.S. Both the increase in fast food and the decrease in consumer spending for food are contributing to the percentage of food expenditures spent on farm foods (fruits, vegtables, grains and meats) to slow down its steady increase from 1% change to mere 0.01% to 0.02% per year starting in 2000.
As of last week, the US Department of Agriculture cut its estimate of 2008-09 U.S. cotton production. This move come is due to the adverse planting and harvest conditions that West Texas—the largest state producer—has experienced. These unfavorable conditions have lowered yields—649 pounds per acre down from 731 pounds last month—and decreased quality. This would also drop the overall US cotton production from 116.59 million bales to 115.25 million bales. In light of this, the department has also pared its projections for the US cotton exports—12 million bales from 12.25 million bales in December—due to continued drop in worldwide consumption. The average cotton production for the whole of the US is 13.59 million bales.
Global textile demand for cotton has lowered in China—the largest importer of US cotton— India, Pakistan and the US, which reflects the slowed demand for textiles worldwide. The price of cotton has not been very steady as it rises and falls with planting and growing conditions; recently the cotton futures price has risen to $0.50 from a two year drop. The slowed demand for cotton as well as other produces has the overall US agricultural trade balance reaching a 36 year low.
In the news, the U.S. Department of Agriculture (USDA) has issued a warning concerning uncooked chicken entrees that, if not cooked correctly, harbor Salmonella. This warning came after 32 people in 12 states got food poisoning. There is more than one Salmonella strain, such as Salmonella Saintpaul (outbreak Aug 2008), Agona (May 2008), Litchfield (March 2008), Schwarzengrund (Aug 2007), and Wandsworth (July 2007). According to the CDC, a strain has been found recently in peppers from Mexico, which sickened 1442 people in 43 states, Washington D.C., and Canada. Also, the pet industry saw a possible salmonella outbreak in Mars Petcare, in which it issued a volunteer recall.
Over the last 8 years, the rate of food borne illnesses has remained steady except for the brief rise in Salmonella in 2003 to 2005. According to the CDC, “an estimated 76 million cases of food borne disease occur each year in the United States. The great majority of these cases is mild and cause symptoms for only a day or two. Some cases are more serious, and CDC estimates that there are 325,000 hospitalizations and 5,000 deaths related to food borne diseases each year.”