Inside this Food Report


March 1, 2015

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Hello Everyone,

Finally it seems we are making some progress on the west coast port slowdown. A tentative agreement has been made between the PMA and ILWU and we have seen the ports on the west coast operating at full capacity since February 23rd. However it is expected to take approximately 3 months before the backlog of shipments can be cleared. As an example last week there were 27 container ships waiting out in Long Beach harbor to be berthed. The economic impact, especially for agricultural will be felt for many months. Oranges, apples and other perishable foods sat on docks and rotted. Asia looked to other markets to supply their goods and this has resulted in lost sales for U.S companies. The agreement made is for 5 years so we could be faced with a similar situation when this agreement ends but lets hope next time our government will step in sooner to help.

On a more positive note it was wonderful to see everyone at the AFFI 2015 convention last week in Anaheim, California. As always it was a fast paced and informative forum.

Green peas in the United States are now being planted. Contracts are underway with farmers for corn acreage. It is expected that corn prices will remain stable or we could see some possible price decreases this season. Vegetables are changing colors as we learned one supplier is beginning to grow purple corn, which will contain enhanced nutritional value, and another is growing a rainbow of carrot colors!

This week we are off to Japan to attend the Foodex Exhibition in Tokyo and look forward to seeing our clients there.

Oh, and Happy Spring which by the way is on March 20th! I am sure it cannot come soon enough for all of our friends on the East Coast who were bombarded with snow this season!

Betty and the Noon International Team


United States: Green pea and potato plantings now underway in the Northwest. Corn contracts with growers are being negotiated. Grower price for corn is expected to remain the same or slightly decrease for the 2015 season.

Inventories of frozen vegetables (corn, peas, potatoes) remain high due to the slow down of the West Coast Ports. Fryers in the Colombia Basin have slowed down processing in order to help with the back up of inventories and fewer potato’s have been used then previous years. We expect the situation to begin to improve with a tentative agreement between the PMA and the ILWU finally reached, however it could take up to 3 to 4 months to clear out the backlog of shipments and inventories.

The Drought Monitor reported 28% of the contiguous United States is in drought, up nearly 2 points since the start of the year. Conditions are worst in California and the southern Plains. Snowpack in the Cascades and the Sierra Nevada’s is very low due to a dry January and February. It is expected that the Pacific Northwest could have lower water availability this summer. Water will be an issue all along the west coast of the United States.

Cherry farmers in California are struggling due to the higher temperatures this year. Cherry trees do best if they have at least 850 hours of temperatures below 45 degrees F. This season in California they have only seen 400 hours . The warmer weather has slowed down the cherry’s growth.

The country’s 2 largest orange growing states, California and Florida, will suffer large losses this year. Due to the west coast dock slowdown, huge volumes of oranges have been rotting on the docks. In turn Florida’s orange crop continues to suffer with citrus greening disease while they try to find a cure. Florida is also expecting a cold snap, which will affect the current orange crop, as well as next year’s crop which is now in the flower stage.

Mexico: Brussels Spouts season has commenced in Mexico. Broccoli and Cauliflower are now in its peak season in Mexico with excellent quality and volumes at peak levels. Temperatures in March are expected to be warmer which will speed up the growing cycle.

Guatemala: Still recovering from the very dry conditions in August and September the broccoli harvest in Guatemala is still a bit low and this coupled with the usual winding down of broccoli for the off season has reduced volumes going to the freezers. Processors are trying to get as many orders shipped before the spring.

Edamame is now being harvested in Guatemala with very good quality results.
Ecuador: Supply situation of conventional broccoli is still tight for spot sales or new business. Harvesting and growing of organic broccoli is increasing due to large demand from the United States market.

Costa Rica: Raw material prices for pineapple have now increased dramatically . Very high demand for the fresh market and a shortage in Thailand has put pressure on the growers to increase their prices.

Thailand : Pineapple remains short. Thailand’s water levels are the worst in 15 years reported Thailand’s Irrigation Department. It is expected that the drought will cut Thailand’s rice export by about 30%. Palm oil production has also been affected by the ongoing drought conditions. It is not known yet whether other crops such as corn will be affected as well.

Chile: Overall weather in Chile has been very warm and dry. Pea harvest and production is now completed and reports are that the season was average. Corn harvest and processing is still underway through most of March. Green bean harvest is also underway.

Peru: Due to unfavorable weather conditions Peru’s avocado crop is expected to decrease by approximately 30%. This projection will leave most processors unable to develop new programs this season for I.Q.F. avocado, however there may be some sales opportunity for frozen avocado pulp.

Europe: North American Potato Market News reported that the European Union is now the largest exporter of frozen French frys. Europe’s fry shipments surpassed those from North American exporters for the first time in year 2014 encouraged by the West Coast port slowdowns. Europe’s fry exports have been growing at a 14.9% annual rate since 2002. The North American rate has been at 5.6%.

China: With spring approaching the temperatures are rising. Quality of broccoli has declined due to warmer weather and as a result some yellow florets are occurring. Processing should continue through March. Planting acreage was reduced this year for Pea Pods and sugar snap peas. To date growth look good but yields expected to be reduced due to less acreage.

Still Struggling With Food Safety

Earlier this year, the Chinese government wrapped up the public comment period on a draft of an updated Food Safety Law (FSL), which is intended to regulate the food industry to ensure best practices. The country has been plagued by food safety scandals, from contaminated meat to unsanitary restaurant practices. Most recently there has been a recall in Australia linked to Hepatitis A concerning a fruit berry mix, which was packaged in China. The public has lost faith in China’s ability to ensure the safety of their food, and the latest draft of the FSL was open to comment to gauge public reaction to the latest round of regulations.

The FSL was first introduced in 2009, after extensive debate and review in the National People’s Congress (NPC), China’s legislative body. The draft currently being reviewed has already gone through several rounds of debate with stakeholders and officials, but it’s unclear when the law could be finalized.

As written now, the FSL will strengthen key regulations designed to ensure food safety in China. The seven main points of the draft are:

  • Restrictions ensuring food is not contaminated during storage, transport and loading.
  • Stronger mechanisms to hold non-government organizations accountable, which is intended to cut down on the spread of false information, and increased fines for spreading false stories about food scandals. The draft also includes a streamlined method for reporting possible food safety issues.
  • Although already a law in China, the FSL draft reiterates the requirement for genetically modified foods (GMO) to be labeled.
  • Modified and shortened registration processes for health foods made with existing foods and imports.
  • Inspections of foreign businesses importing food to China.
  • Significantly higher penalties for those who violate any provision of the FSL.
  • Exemptions from liability for manufacturers and businesses that, in the event of a food safety incident, are found to have complied fully with FSL.

There is still no firm date set for when the FSL will be finalized.

Colored Cauliflower!

Over the past few years, something special has been popping up at farmer’s markets and in the produce aisle of stores. Fans of cauliflower may have noticed that white isn’t the only color on the fresh market shelves these days. Purple and orange heads of the versatile vegetable have been creeping their way into the market. It may take a little getting used to, but we have everything you need to know about colored cauliflower.

These vibrant heads of cauliflower aren’t a trick of the eye or the product of dyes. Purple cauliflower gets it’s violet shade from the presence of antioxidants, the same ones that cause red cabbage to have a similar hue. Orange cauliflower is colored by a gene mutation, which occurs naturally but has been crossbred for mass consumption. Both of these conditions occur in nature, and have been encouraged by farmers as demand has grown over the past ten years.

Differing colors of cauliflower do offer distinct health benefits. Purple cauliflower includes the antioxidant anthocyanin, which can help lower blood lipids and sugar levels, as well as body weight. Orange cauliflower contains more beta-carotene due to its orange hue, as well as 25% more Vitamin A compared to white cauliflower. Both colors also contain the vitamins, minerals, and other nutritional benefits that traditional white cauliflower offers!

Trying these brightly colored veggies is easy. Just cook them as you would any other cauliflower! The florets cook the same way white cauliflower does, and the color will stick around for a burst of unexpected purple or orange. Try roasting a few colors together to add a little fun and improved nutritional value to your meal!

TPP Is An Agreement Close?

Last month, talks on the Trans-Pacific Partnership continued between the United States and Japan. The 12-nation Trans-Pacific Partnership, or TPP, is a trade deal designed to lower barriers to export and import between member countries. But a two-way deal between the United States and Japan has held up the agreement, with no signs of a solution on the horizon.

The TPP was first organized in 2011, with nine original members. The agreement is meant to increase trade between member countries by cutting tariffs, easing regulations for export-import, and encourage regional business relations. The TPP is a large-scale “free” trade agreement, and transactions that would fall under it make up about one third of all world trade. Japan, Canada, and Mexico have joined the originally founding member countries Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the United States.

The deal has been controversial, and poses some difficult challenges to agriculture in all member countries. While lowering or removing tariffs will make it easier to trade between countries, it could also drive down prices as members flood foreign markets with excess product. There are many other components to the TPP besides lowering or removing tariffs which makes for a complicated agreement. Opposition in the United States and other member countries has grown since the agreement was introduced, as many see local and small-scale operations under threat. If history is any judge 21 years after NAFTA and 4 years after President Obama’s 2011 U.S. South Korea Free Trade Agreement there is much data that shows this trade model has not been good for most U.S. businesses, farmers and workers. Trade deficits are up with free trade partners and down with countries that are not free trade partners. The United States now has an annual $177 billion trade deficit in goods with its 20 free trade partners.

For Japan and the United States, agricultural tariffs lay in the center of ongoing negotiations. While Prime Minister Shinzo Abe hopes the deal with bolster the Japanese economy, he has refused to allow cuts to tariffs on protected food items, such as beef and sugar. In response, the United States refused to cut tariffs on imported car parts, which significantly lowers the economic advantages of the intended agreement for Japan. Although reports initially suggested a compromise would be worked out that allowed Japan and the U.S. to keep some tariffs on these goods, neither side has been able to reach a conclusion.

Talks between the United States and Japan were intended to clear up all outstanding issues last year, but negotiations suddenly collapsed in November. Since then, talks have resumed, but the Japanese government recently commented that they fear a decision will not be reached by early spring. Chief TPP negotiators are set to meet in Hawaii from March 9 to March 15th and the United States and Japan (the two countries seen holding the key to the success of the talks) are hoping to hold a bilateral meeting ahead of that. However in the meantime the United States and Japan are showing no signs of concessions over some tricky issues. At this moment it is unclear when the TPP will be in effect or what the consequences will be for global agriculture.

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