From Field to Fork

Taking in a professional convention has consequences. The attendee gets a break, brings home new ideas, builds new relationships, etc. The folks back home may dread the attendee’s return because it’s likely to mean some new scheme to “do things better.”

I attended the American Society of Association Executives convention in late August. (You knew there had to be an association for association people, right?) It is great to get out of the office and learn from fellow association execs that are facing the same issues we face and are willing to share solutions. Speaker Robert B. Tucker focused on innovative thinking. He talked about making innovation a systematic process, implementing idea management systems, collaborating with customers and suppliers, creating metrics and rewards, and involving everyone in the enterprise.

Tucker noted that there’s no such thing as a commodity (an undistinguished item in a sea of like items), just tired marketers. He stressed looking for new markets and new distribution channels. He challenged listeners to look outside their industry to find value and impact.

He also used a twist on a phrase that I liked. Tucker said we should ask ourselves “different” questions as we seek to innovate. That rang true with me – more so than the admonition to ask “better” questions, which makes a negative value judgment about the questions we’re already asking. Not only does this eliminate the value judgment, it also encourages us to open new lines of questioning that may lead to different paths, hence to innovation. So the next time you’re tempted to scour your brain for a “better” question, just let your mind wander to a “different” question and see where that gets you.

I enjoy getting out with my colleagues, examining common (or not-so-common) issues, and finding new ways to improve how I do my job. You’ve got that opportunity coming up as well. Come to Fresh Summit, October 15 to 18 in Orlando. Get out from behind your desk, engage on issues, and build relationships (new and established). Give yourself the mental and physical space to discover and develop the great idea that’s going to take your business to the next level.

PMA is working to strengthen the global marketplace for your products. The fresh produce and floral industries certainly are part of a global, integrated business system that is essential for year-round availability for consumers and business/distribution options for businesses. Recently several PMA staff met with U.S. Commerce Department officials to look for ways we can work together for mutual benefit. We also wanted to explore the resources our members can use to help their businesses.

As with the USDA and other federal agencies, a lot of work goes into these resources, and the Internet makes them more readily and easily available than when we all pored over print materials. You’ve heard of the National Export Initiative (NEI) that seeks to double U.S. exports over five years. Poking around in the department’s export resources you’ll find information on the NEI, basics about exporting, market research, trade leads and more. Whether you’re new to exporting or looking for broader markets, you’ll find resources that can expand your company’s horizons.

You’ll also find opportunities to network with buyers from around the world at Fresh Summit in Orlando, October 15 to 18, so be sure you’re there. Whether we’re talking about global business or local foods, fresh produce is at the heart of most food discussions. We’re part of health solutions, trade solutions, and business solutions. It’s not always easy to operate in such a complex environment.

You already take advantage of some of PMA’s resources (or you wouldn’t be reading this blog). Be sure you capitalize on all of them, and be sure you’re tapping the array of resources the U.S. government has to offer. After all, you helped pay for them.

What do sweet corn, pistachios, oranges, grapefruit, and apples have in common? They’re the latest fresh produce additions to the Mexican tariff retaliation efforts. As you know, the U.S. Congress stopped a cross-border trucking safety pilot project run by the U.S. Department of Transportation by eliminating funding for the project in early 2009. This prompted Mexico to announce retaliatory tariffs on U.S. manufactured and agricultural exports to Mexico, including several produce crops. In mid-August, Mexico added new items, including these five produce commodities, to the list in an effort to pressure the United States to take action.

This has been going on for about 18 months now, and the products involved are either not moving into Mexico or are moving at significantly reduced levels. That’s enough of a problem, but the longer the stalemate lasts, the more other trading partners are filling the supply gaps in Mexico left by a lack of U.S. product. Those trading relationships continue to strengthen and may replace the U.S. supplier – Mexican buyer relationships for the long haul. We continue to urge the Obama administration to resolve this.

In addition, the Alliance to Keep U.S. Jobs (of which PMA is a member) continues to urge the Administration to do what it takes to solve this problem. Beyond the trade issues, this issue has resulted in more than 25,000 jobs being threatened or lost.

Recently PMA staffers Nancy Tucker and Richard Owen attended FRESH, a European fresh fruit and vegetable conference in St. Petersburg, Russia, April 13-15, organized by our friends at Freshfel, in cooperation with Eurofruit Magazine. Nancy offers the following information about the produce industry in Russia:

• Russia´s economic recovery is under way, imports are getting cheaper thanks to a stronger ruble, and the government predicts retail sales to grow by 3.3% this year. However, domestic demand has remained “unstable”, unemployment is still a concern, and the country´s economy is not expected to return to pre-crisis levels until 2012.
• With inflation declining, imports are getting cheaper for consumers thanks to the stronger ruble.
  Russian consumers are expected to see health as increasingly important (a benefit for our market), but the issue of minimum pesticide residue levels looms large. The Russian government is increasing its involvement in this area.

• Approximately 15% of the fruit sold in Russia is domestically grown (85% is imported), but only 2-3% of the fruit in supermarkets is domestic, with the rest going to street markets.
• Fresh-cut items are starting to make an appearance in Russian hypermarkets and upper end supermarkets, but cold chain challenges hamper expansion efforts.
• Organic items are just starting to appear at retail. Canned and dried products will be on the shelves initially. The price differential and cold chain challenges hamper fresh organic sales.

Nancy and Richard barely made it out of Russia due to the volcano-induced airline problems. After hours in line and the help of two Russian travelers, Nancy was able to fly to the U.S. on Friday while Richard flew south on Saturday to South Africa on the only international airline that was leaving the airport. A couple of key learnings from this trip are that the Russian market may offer opportunities for produce marketers, and travelling with a carry-on may be your best bet in uncertain geologic times.

As PMA staff visit places of interest, we’ll continue to offer you their insights!

Last week it was announced that the United States and Mexico may moving closer to resolving the issue of cross-border trucking when U.S. Transportation Secretary Ray LaHood and Mexican Transportation Secretary Juan Francisco Molinar reviewed the status of motor carrier issues of mutual importance to both nations. The officials confirmed their intent to resolve these issues as a highest priority and announced they will establish a working group to consider next steps of the cross-border trucking program. While the next meeting between President Obama and President Calderon of Mexico will be in mid May at the White House, it is likely that any progress made on the issue this year will be slow and incremental.

In the meantime, the Alliance to Keep U.S. Jobs (of which PMA is a member) continues to urge the Administration to work with Congress and our trade partners in Mexico to solve this problem, which has resulted in more than 25,000 jobs being threatened or lost as a result of the retaliatory tariffs imposed by Mexico when the cross-border trucking pilot program was terminated by Congress a year ago. The alliance continues to work to resolve this issue.

In today’s Federal Register, the USDA announced proposed fee increases associated with the administration of the Perishable Agricultural Commodities Act. Among them: branch location fees would increase from $200 for branch locations in excess of nine to $600 for each branch location. The maximum amount a licensee would pay per year would increase from $4,000 to $8,000. Additionally, the regulations would be amended to remove the provisions to phase out license fees by retailers and grocery wholesalers and the provisions to phase in triennial license renewal for retailers and grocery wholesalers as these processes have already occurred. USDA is proposing to eliminate the multi-year license renewal option for commission merchants, brokers, and dealers.

Comments on this proposal are due to USDA by May 10. It’s important to note that PACA fees have not increased in 15 years. However in the current economic climate, the increases may create a financial challenge for some businesses. Since its inception, PACA has been a highly valued and trusted regulatory mechanism for protecting buyer-seller transactions.

We will be commenting on the USDA proposal and we encourage all members of the supply chain to do so as well, lending your real-world produce experience to USDA as the agency considers the proposed fee increases.

Hats off to Reps. Dennis Cardoza (D-CA) and Rick Larsen (D-WA) for their efforts to solve the Mexican trucking stalemate. As you know, the U.S. Congress stopped a cross-border trucking safety pilot project run by the U.S. Department of Transportation by eliminating funding for the project. This prompted Mexico to announce retaliatory tariffs on about $2.4 billion of U.S. manufactured and agricultural exports to Mexico, including several produce crops.

Reps. Cardoza and Larsen sent a letter (endorsed by 54 co-signers in the U.S. House of Representatives – thanks, PMA GROW members for your help in this effort) to Transportation Secretary Ray LaHood and U.S. Trade Representative Ron Kirk, calling for information on the Obama administration’s efforts to resolve the issue.

In part, the letter said: “Over the past 11 months, Administration officials have repeatedly expressed confidence that a resolution to the current dispute could be found that would fulfill our obligations to Mexico under the North American Free Trade Agreement. President Obama expressed his commitment to resolving the issue to (Mexican) President Calderon during their meeting in Guadalajara, Mexico in August, 2009. However, to date, the Administration has not shared any of the principles or the parameters of a proposed plan. Finally, in the FY2010 Consolidated Appropriations Bill, Congress chose not to continue the funding limitation for the pilot program.

“The current situation is unsustainable and untenable. Our constituents need help immediately and we implore you to work quickly to implement a solution that ensures safety and normalizes trade between the U.S. and Mexico. Please communicate your plans for a solution so that we are better able to understand the Administration’s strategy to address this matter and resolve this situation permanently. Our constituents need to move forward.”

For more information on the issue, visit the Alliance to Keep U.S. Jobs (of which PMA is a member). We continue to work to resolve this issue.

Recently, the Alliance to Keep U.S. Jobs (of which PMA is a member) urged President Obama to resolve a longstanding dispute with Mexico on cross-border trucking – a chronically overlooked issue that is contributing to American job losses. You may recall that, in March, prompted by political claims of safety concerns, Congress effectively eliminated a cross-border trucking safety demonstration project run by the Department of Transportation.

That action put the United States in violation of the North American Free Trade Agreement. It also prompted the Government of Mexico to announce retaliatory tariffs on about $2.4 billion of U.S. manufactured and agricultural exports to Mexico, including several produce crops. Mexico’s actions were deemed permissible by an international panel of trade experts, including representatives from the United States.

The Alliance estimates that more than 25,000 jobs are either threatened or have been lost as a result of the imposition of the retaliatory tariffs and believes that the ongoing dispute is undermining the U.S. relationship with Mexico and eliminating a valuable market for U.S. manufactured goods and agricultural products. For more information, visit the Alliance to Keep U.S. Jobs’ Web site. We continue to work to resolve this issue.

According to a global study released by Synovate, some six in 10 grocery shoppers across 10 international markets, including the U.S., would go out of their way to shop “green.” This drive-to-green trend is being led by 86% of Russian respondents and 85% of Malaysians. Interestingly, Dutch consumers weren’t that interested in “green” retail trends because environmentally friendly products and policies (e.g. fewer plastic bags) have been in place for ten to twenty years in small stores and around five years in chain stores in the Netherlands.

Also, across the 10 markets surveyed, 79% of respondents found the idea of recycling facilities in supermarkets and grocery stores interesting. Ninety percent in Brazil agreed it was a good idea, followed by 89% in Serbia, and 88% in Malaysia.

As U.S. supermarket operators continue to look at how sustainability fits into their business models, there are a number of ways to go “green” – whether it’s through asking shoppers to reuse or recycle their plastic bags, reducing energy costs through changes in lighting fixtures and properly loading refrigerated cases to maximize airflow in and on product, or through working with supply chain partners on new packaging or buy local campaigns.

If you’ve undertaken sustainability in your business and have a success story to share, please let us know. We’re always looking for new sustainability success stories for the PMA Web site.

Thanks to our friends at Freshfel, the European Fresh Produce Association, we offer a few updates on produce marketing in Europe.

Marketing in Europe? Get the FAQs on new rules: The European Commission’s Directorate-General for Agriculture and Rural Development published a set of frequently asked questions (FAQ) along with answers regarding the new marketing standard regime. The new standards, including marketing standards, were effective July 1. This document explains the changes.

Produce program for school kids: September 4 marked the opening of the school year and the European School Fruit Scheme in several European countries. The program is designed to get more fruits and vegetables to school children, a laudable goal worth pursuing. Freshfel continues to work to improve the program. The organization seeks a clear overview of each country’s implementation program and a comparison across countries, an annual networking event to share information and best practices, and a Web site to share information and materials. Freshfel would also like the Directorate-General to establish working groups (scientific-technical group for evaluation and monitoring and a stakeholders group for sharing best practices). The association shared its concerns that German may not take up the program and that some countries may limit eligible items, calling on the Directorate-General to insist that participating countries include a broad range of fruits and vegetables.

Hope for nutrition labeling harmonization dims: In early September, the new European Parliament held its first meeting of the Committee on the Environment, Public Health and Food Safety in Brussels, including a discussion on the Commission proposal on nutrition labeling. It appears there are still many different views on food labeling among member states and it might be difficult to reach agreement this fall.

In addition to providing great information on the European marketplace, Freshfel also educates its members in Europe about the U.S. marketplace. Thanks to Freshfel for including PMA’s consumer research in its updates!