A few weeks ago here at PMA we received an update from U.S. Department of Agriculture Economic Research Service (ERS) Administrator Mary Bohman describing how funding reductions would affect the services ERS provides our industry for the rest of this year. In that update, she stated “many of these products rely on National Agricultural Statistics Service products that have been suspended because of budget reductions. In addition, reductions in the ERS budget limit our ability to quickly identify whether alternative information sources or approaches can be developed in time to meet the scheduled deadlines.”

For our industry, this means that the quarterly Vegetable and Pulses Outlook and Fruit and Tree Nuts Outlook reports have been suspended and the Vegetable and Pulses Data and Fruit and Tree Nuts Data (both July-September) are not scheduled for update at this time. The fresh produce industry isn’t the only sector that will have less data from which to work; dairy, livestock, poultry, meat, aquaculture, and rice are also on the receiving end of research cuts.

I’m sharing this news with you in case you regularly use of one or more of ERS’s outlook reports that provide market analysis and statistics on fresh produce, or if you use ERS research as part of your business operations. ERS reports are one of many information sources I turn to when researching responses to PMA members’ questions and I’m disappointed that these reports won’t be available this year. I am hopeful that the data points provided by these reports can be obtained through other sources.

We’ll keep an eye on this issue and let you know if any new developments, or alternatives, arise.

As the United States looks toward two new multi-national free trade agreements (Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership), USDA has issued information on trade opportunities for horticulture. An Amber Waves article, “Free-Trade Agreements: New Trade Opportunities for Horticulture,” looks at a variety of statistics on horticultural trade in recent years and offers insight into what new FTAs might mean.

The article notes that the United Nations ComTrade database shows fruit and vegetable trade up from more than $90 billion in 2000 to nearly $218 billion in 2010, accounting for almost 21% of global food and animal product trade. Looking at the U.S. share of that, “fruit and vegetable imports and exports more than doubled in value, reaching 22.9 billion and $15.7 billion, respectively, or about 26% of U.S. food and agricultural imports and 13% of exports.”

The authors cite four long-term factors in the increase in fruit and vegetable trade:

• Growing middle class in emerging market countries that wants healthful, convenient fruits and vegetables
• Technology, especially communication and transportation technology, lower transaction costs
• Global retail consolidation improves supply chain efficiencies, which benefits highly perishable foods
• Barriers to horticultural trade have been cut through the World Trade Organization Agreement on Agriculture and other trade agreements

The article has charts, maps, and data on trade, particularly trade that involves the United States, detailing top fruit/vegetable export and import items. And it projects some of the bigger winners should the TPP and TTIP come to fruition.

Check it out and let’s talk about the implications of these agreements and about growing global produce trade in the Global Trade Community on PMA Xchange.

Recently PMA held a Fresh Connections event (as well as a Global Development Committee) in Shanghai, China, that focused on fresh fruit and vegetable opportunities, supply chain logistics, consumer demographics and trends, regulatory issues, and other key topics. One of the key educational components of this successful event was a new report on the Chinese produce market prepared for PMA members by our in-country consultant Mabel Zhuang. This report is now online via the PMA website; below are some key highlights:

• There are currently three main farm structures for fruit and vegetable producers: individual farms, cooperatives, and corporate farms.
• Wholesale markets serve as the main trade hubs through which 70 percent of China’s fresh produce is distributed. Wholesale market managers typically function similarly to landlords while wholesale distributors rent space in the markets to conduct transactions.
• Wet markets are the traditional, and still most popular, retail outlet for fresh agricultural goods such as vegetables, fruits, meat, and seafood. Modern supermarket chains began operating in China in the early 1990s and began selling fresh produce in the late 1990s. Since then, they have become one of the most popular and successful retail models in China. However, they often lack the expertise to maintain produce quality.
• Multiple factors including the emergence of large-scale growing operations and supermarket demands to improve produce offerings have led to a new supply chain model in which retailers source fresh produce directly from producers.
• Even though China is the world’s largest fresh fruit producer, it is also a major fruit importer. Imported fruit first arrives at one of China’s largest wholesale markets in Guangzhou, Shanghai, or Beijing, after which it is transported to smaller wholesale markets throughout the country.

You can get additional information resources from Fresh Connections: China by visiting the PMA website. We welcome your thoughts on these tools in the Global Trade Community on PMA Xchange.

Joe Glauber, USDA’s chief economist, said the U.S. agricultural economy is strong, despite drought, and 2013 will also be strong. Speaking at the USDA’s Ag Outlook Forum recently, Glauber mainly detailed program crops; there were few (OK only one piece of one data slide) mentions of specialty crops. However, his broader points about U.S. agriculture are an important backdrop for our industry.

He said ag exports are forecast at $142 billion for fiscal year 2013, with imports projected at $112.5 billion, yielding a net trade balance of $29.5 billion. Export values will be up in FY 2013, including for fresh fruits and vegetables. China is projected to be the top destination for U.S. ag exports for the second year in the road (though mainly soybeans and cotton). Canada will come in second again.

On the U.S. demand side, Glauber said the food consumer price index (CPI) will rise in 2013, but not as high as the top levels in 2008 and 2011. He said the Economic Research Service pegs food inflation at 3-4% for this year.

Though some of the breakout sessions included information on fresh produce, the overview sessions and keynotes focused on program crops. I spoke with some industry representatives at the forum, and though they were pleased to see some produce information, they were disappointed that our economic situation still is left out of those overviews.

One mentioned that, with produce responsible for 50 percent of farm gate value, our industry should figure prominently in these types of events.

Today the U.S. Food and Drug Administration released its international capacity building plan to expand the technical, scientific, and regulatory food safety capacity of non-U.S. governments and their respective food industries in countries that export foods to the U.S. FDA was required to create this plan under Section 305 of the Food Safety Modernization Act (FSMA).

The plan, available on the FDA website, incorporates FSMA’s principles of comprehensive prevention, risk-based resource allocation, and partnering. It provides a strategic framework for FDA’s international food safety capacity-building activities by outlining goals, objectives, and key actions that will provide a framework for the FDA in setting priorities and managing international food safety capacity building programs.

One of the items (on page 11) I found interesting in the plan FDA’s “building a risk-based decision-making tool that will incorporate country-specific data to assist the agency in determining the specific facility, food products, processes, and hazards that merit inspection. This tool will mine validated publicly available information from the Internet and other open web sources. This tool, coupled with results from previous foreign inspections, will enhance FDA’s ability to identify specific areas of concern in a country’s food safety system.”

This sounds somewhat similar to how the PREDICT system FDA currently uses functions, so I’m curious to see how (and if) this new tool integrates with PREDICT.

What do you think of FDA’s plan? Share your thoughts in the FSMA Community on PMA Xchange. Also, don’t forget to check out our FSMA resource center for the latest FSMA news and information.

Earlier this week, the U.S. Food and Drug Administration announced its final rule amending the criteria for administrative detention to prevent potentially unsafe food from reaching the marketplace. In doing so, the criteria are now consistent with changes to the Federal Food, Drug, and Cosmetic Act under the Food Safety Modernization Act (FSMA).

The final rule adopts the interim final rule (which was published in May 2011) without change. Under the new criteria, FDA can order an administrative detention if there is reason to believe that an article of food is adulterated or misbranded.

In the final rule, FDA responded to a comment concerning potential confusion between the term “administrative detention” under the FD&C Act and the term “detention” as used during the importation process. FDA explained that: “Given the procedural and substantive differences between administrative detention and detention that occurs during import admissibility review, confusion between the two is unlikely.” The agency also stated that when it gives written notice in either circumstance, it will make clear which type of detention is involved.

You can learn more about administrative detention by visiting the FDA website.

In mid-January, U.S. Customs and Border Protection (CBP) and Mexico’s Tax Administration Service (SAT) signed a Joint Work Plan setting the foundation to mutually recognize the two countries’ Authorized Economic Operator programs: CBP’s Customs-Trade Partnership Against Terrorism (C-TPAT) and the SAT’s New Certified Companies Scheme (NEEC).

Expected to be implemented in two years, the Joint Work Plan lays out the path forward to mutual recognition – which will allow companies enrolled in one program to receive reciprocal benefits from the other with the result of both further securing the international supply chain and facilitating trade between the United States and Mexico. You can learn more about what mutual recognition is, and is not, via this fact sheet.

Administered by U.S. Customs and Border Protection and according to CBP’s website, “C-TPAT is a voluntary government-business initiative to build cooperative relationships that strengthen and improve overall international supply chain and U.S. border security. C-TPAT recognized that U.S. Customs and Border Protection can provide the highest level of cargo security only through close cooperation with the ultimate owners of the international supply chain such as importers, carriers, consolidators, licensed customs brokers, and manufacturers.”

Like the C-TPAT program, the NEEC is a voluntary program designed to increase security in the supply chain. Companies that meet the program’s standards are granted benefits such as access to FAST lanes, expedited release of cargo, dedicated inspection areas, and more.

For more details on C-TPAT, visit the CBP website. To learn more about the NEEC scheme, visit the SAT website (note: this site is in Spanish).

If you’ve ever wanted to know more about the Perishable Agricultural Act’s (PACA) Trust provision, you have an opportunity to hear from USDA experts next week. From 2:00-3:30 p.m. Eastern on January 24, USDA’s Agricultural Marketing Service will hold a free webcast on the PACA Trust.

The PACA Trust provision gives sellers of fresh and frozen fruits and vegetables priority status in recovering funds owed by buyers who become insolvent or file for bankruptcy protection. Through the trust, produce suppliers have received hundreds of millions of dollars that they were owed. Webinar speakers will provide information on three specific areas:

• Josephine Jenkins, Chief of the Investigative Enforcement Branch, AMS PACA Division, will explain the statutory foundations and basic steps you must take to protect your business.
• Jason Klinowski, agricultural and food law attorney, will discuss the PACA Trust from the private practitioner’s viewpoint and share current case law. He represents PACA Trust claimants in civil and bankruptcy courts.
• Karla Whalen, AMS PACA Division director, will provide an update on the U.S.’ efforts to gain financial protection for U.S. produce shippers selling into the Canadian market under the Regulatory Cooperation Council (RCC).

While the USDA PACA Trust webcast is free, space is limited. To register, go here.

USDA says more webcasts will be scheduled throughout 2013. Here at PMA, I often use USDA’s information services as I research members’ questions. Members can also use our navigating regulatory agencies page to learn more about USDA, FDA, and Customs.

Building off of yesterday’s post on FDA’s relationship with Chinese regulatory officials, I’d like to mention some new resources for those PMA members who are seeking insight and data on the Chinese market for fresh fruits and vegetables. Over the past month or so, PMA has added a number of new resources to its website to meet these information needs. Thanks to our consultant in China Mabel Zhuang, members can receive a market overview, including demographic and retail trends, production statistics, and information about import protocols.

For example, fresh produce production, consumption, and trade have all grown substantially in China in recent years. According to the latest China Statistics Yearbook, domestic production tripled between 2000 and 2009, rising from 62.6 million tons to 203 million tons over the period. Over roughly the same period (2009 data is not yet available), fruit and vegetable consumption among urban households rose 8 percent, reaching 177.6 kg per household. That figure does not, however, include fresh produce consumed outside the home, which could add another 30% if factored into total consumption, according to some studies.

The value of fresh fruit imports into China reached USD 2.5 billion in 2011, an increase of 59.6 percent over 2010 (1.6 billion). Thailand remained the number 1 fruit exporter to China in 2011 with a market share of 26.2 percent. Chile, Philippines, Vietnam, and the United States also ranked among the top five fruit exporters along with Thailand, all maintaining market shares above 10 percent. Among the top five exporters, Chile and the Philippines increased their market shares while the market shares of Thailand, Vietnam, and the United States fell slightly due to slower growth.

Also, a recent training seminar in Guangzhou, China, held in conjunction with the Global Cold Chain Alliance (GCCA) and SIAM Professionals LLC explored fresh produce handling in China. PMA’s Vice President of Supply Chain Efficiencies Ed Treacy presented “Handling Fresh Produce in China” and “Protocols for Handling Export/Import Perishables in China.” These sessions were recorded and are now available to members.

To learn more about these resources and PMA’s activities in China, visit the PMA website.

Last week the U.S. Food and Drug Administration (FDA) announced it has renewed an agreement with the General Administration of Quality Supervision, Inspection, and Quarantine of China (AQSIQ) to enhance cooperation between the U.S. and China on food and feed safety. The two countries entered into the original agreement in 2007, and today’s announcement extends the agreement for an additional five years.

The agreement includes enhancement of FDA’s ability to identify high-risk food products entering the United States from China; collaboration to facilitate inspections of facilities that process and produce food; a focus on high-risk foods frequently exported from China to the United States; and the creation of processes for FDA to accept relevant, verified information from AQSIQ regarding registration and certification.

In a statement, FDA noted that since enactment of the Food Safety Modernization Act (FSMA) in 2011, the agency has worked with AQSIQ to conduct multiple outreach events for Chinese food safety officials and regulated industry on the impact the FSMA will have on Chinese food exports to the United States. FDA also stated it has developed key relationships with Chinese regulators and frequently holds joint workshops with Chinese food regulators to provide training and build regulatory capacity, and specify FDA standards and requirements for industry.

In reading this announcement, I was reminded of the June meeting I attended that focused on FDA’s international capacity-building plan, which is part of the FDA’s mandate to implement Title III of the Food Safety Modernization Act. A report on this plan is due to Congress on January 4, 2013. We’ll continue to monitor this topic and update you as we learn more about FDA’s plan (and other FSMA proposals) as information becomes available.

In the meantime, we welcome you to join the FSMA Community on PMA Xchange. Tomorrow I’ll have an update on some new resources available from PMA that are focused on China’s marketplace.