Agri-Mark, the largest dairy cooperative in the Northeast, has asked
the federal government to intervene and stop dairy prices from
continuing their downward trend. Last month, cheese prices on the
National Cheese Exchange fell about 20%. The cheese exchange price
sets the Minnesota-Wisconsin milk price, a benchmark for milk
prices in other regions of the country. Agri-Mark economist Robert
Wellington said if the price slide is not stopped, the price paid to
dairy farmers in the Northeast could drop $1 per hundredweight this
summer and as much as $2 per hundredweight this fall. "It could be
a crushing blow for most farmers," Wellington said.
Officials with this particular cooperative said they did not believe the
price drop could be attributed to the use of recombinant bovine
growth hormone (rBGH or BST), but rather to an increase in
production in the West. Agri-Mark has asked the USDA to ease the
price slide by making advanced purchases of cheese and other dairy
products for the school lunch program and other recipients of
government surplus.
Lower prices paid to farmers will probably not translate into lower
prices for consumers. "It's far more typical for a retailer in a period
of declining wholesale prices just to hold the retail price steady, or
maybe run a special," said Andrew Novakovic of Cornell University.
He said government intervention would help, but only for awhile. "I
think the basic fundamentals of the marketplace ... suggest we're in a
period where prices are going to be at best stable and more likely
trend downward," he said.
Late last month, European Commission President Jacques Delors let
slip that "technological developments will increase European milk
production by about 10% in the near future." This suggests that the
Commission will not extend the one-year ban currently in place on
the licensing of rBGH when it expires at the end of the year. Under
the recently-completed Uruguay Round of the General Agreement on
Tariffs and Trade (GATT), countries cannot ban substances unless
they can be scientifically proven to be unsafe. "Following the GATT
agreement, if the EU continues to deny farmers the tools to produce
safely, it will risk opening the floodgates to world competition," said
Johan Vanhemelrijk of the European Federation of Animal Health.
Legalizing the drug is expected to encounter opposition from both
consumers and the European dairy sector, which is also operating
under a milk surplus.
Source: "Agri-Mark Wants Government to Stop Decline in Dairy
Prices, TIMES ARGUS, May 24, 1994; Anne Wallace, "Farmers' Group
Blasts Hormone Use," RUTLAND DAILY HERALD, May 19, 1994; "Dairy
Product Prices Continue Downward Slide," AGWEEK, May 16, 1994;
"Farm Group Alleges Use of BGH Lowering Prices," TIMES ARGUS,
May 18, 1994; "Friday the 13th Price Drop Linked to BGH Use,"
RURAL VERMONT PRESS RELEASE, May 18, 1994; Robert Greene,
"Milk Glut," AP, June 2, 1994; "Hormone Embargo May Be Dropped,"
THE HERALD, May 28, 1994.
CALGENE CELEBRATES, GROUP PROMISES BOYCOTT
Calgene is celebrating the approval of its Flavr Savr tomato by the
Food and Drug Administration (FDA) last month. Limited quantities
will soon be available in the Midwest and parts of California, said a
Calgene spokesperson. The Flavr Savr, genetically engineered to
ripen slower than traditionally bred tomatoes, will be sold under the
brand name MacGregor.
The Pure Food Campaign (PFC) is beginning a boycott of Calgene's
Flavr Savr tomato. "The FDA approval of the Calgene tomato is
grossly negligent and represents a threat to both consumers and
farmers," said Jeremy Rifkin of the PFC. The Union of Concerned
Scientists recommended the FDA require safety reviews and labeling
for genetically engineered foods. The Grocery Manufacturers
Association, on the other hand, celebrated the approval, saying about
50 more biotech food products will be on the market in the next six
years.
Source: "Calgene Rolling with New Tomato; Consumer Boycott,
Lawsuit Vowed," FOOD INSTITUTE REPORT, May 23, 1994; "FDA
Approves Genetically Engineered Tomato," NUTRITION WEEK, May
20, 1994.
SENATE PASSES REAUTHORIZATION OF SDWA
Last month, the Senate voted overwhelmingly in favor of a bill to
reauthorize the 1974 Safe Drinking Water Act. The bill, authored by
Max Baucus (D-MT), eases standards for smaller water systems,
which serve about 20% of the country. Systems that serve fewer than
10,000 persons would be subject to less stringent safety standards
through the use of cheaper technologies and less frequent testing.
Some carcinogens would also be allowed in water "if it achieves
substantial cost savings and does not result in a significant increase
in individual lifetime cancer risks," according to a summary of the
bill. An amendment by Barbara Boxer (D-CA) requires the
Environmental Protection Agency (EPA) to account for the
vulnerabilities of unique population such as children and the elderly.
Environment and health groups are working to strengthen the House
version of the bill.
Source: "Senate Approves Safe Drinking Water Legislation,"
NUTRITION WEEK, May 27, 1994.
EU AGREES TO TIGHTER BEEF CONTROLS
The European Union (EU) agreed to tighter controls over bovine
spongiform encephalopathy (BSE), otherwise known as mad cow
disease. Meeting in Brussels, agriculture ministers of EU member
nations agreed to extend the ban on the use of meat and bone meal
in cattle feed to all members. Currently, only the U.K. has such a ban
in place. German Health Minister Horst Seehofer has been
threatening to ban imports of British beef for the past couple of
months out of concern over the effects of BSE on humans. "It should
be enough to dispel any fears the German farm [sic] minister might
have had," said EU Agriculture Commissioner Rene Steichen. Other
measures accepted were a proposal to increase the temperature used
in the rendering process, restrictions on the use of meat by-products
in cosmetics and a requirement that all member states be routinely
checked for BSE outbreaks.
In other meat news, one food executive recently predicted that meat
blends would be the way of the future. Frank Sanderson, CEO of
Sanderson Farms in Mississippi, told food magazine editors at a
gathering in April that a fifty-fifty burger containing beef and
poultry will be the most common meat patty after the year 2000. He
predicted that chicken consumption would increase 16% by the turn
of the century and that the majority of food we eat will be prepared
outside the home by industry. He also said the beef and poultry
industries would have to work hard and stick together.
At a recent congressional hearing, the General Accounting Office
(GAO) said that the nation's meat inspection system is only
"marginally better" than it was a year ago in the aftermath of a
massive food poisoning outbreak in the Pacific Northwest linked to
consumption of fast food hamburgers. Jeff Harmon of the GAO
criticized the USDA's zero-tolerance requirement -- that all visible
contaminants be trimmed away from carcasses -- as "a stopgap" step.
He said zero-tolerance cannot guarantee cleaner beef because the
government has not set up guidelines governing the presence of
pathogens in packing houses.
The meat industry, on the other hand, criticized zero-tolerance.
Carcasses are being handled too frequently, thereby increasing the
chance for plant workers and inspectors to spread dangerous
pathogens. "This strategy, in effect, is failing to deliver consumers
safer beef and asking them to pay more for it," said J. Patrick Boyle
of the American Meat Institute. Patricia Jensen, acting assistant
secretary for marketing and inspections said the USDA is involved in
a pilot program seeking to measure the presence of bacteria in
packing plants and on carcasses. She also said her department has
commissioned a study to look at washes, which are used in poultry
plants.
Source: "EU Tightens Beef Controls," FINANCIAL TIMES, June 1, 1994;
"Minister Says Bonn Might Still Ban British Beef," REUTER, May 31,
1994; Robert Brown, "Meat Blends Will Be Standard in the Future,"
FEEDSTUFFS, May 23, 1994; "U.S. Meat System 'Only Marginally
Better,'" REUTER, May 24, 1994; Robert Greene, "Clean Beef," AP, May
24, 1994.
NEW STANDARDS FOR SCHOOL LUNCHES DUE OUT SOON
The Clinton administration is expected to announce new standards
for the school lunch program soon. Under the proposal, new limits
would be set for fat, sodium and cholesterol and require more fruits,
vegetables and grains. Local schools would be required to ensure
that the meals meet federal standards for fat content and nutrients
such as Vitamin A, Vitamin C, iron and calcium. Four public hearings
held throughout the country last fall revealed that school lunch
program participants are served hot dogs, french fries and chicken
nuggets with large amounts of salt on a routine basis. A draft of the
proposal said 38% of all calories in school lunches came from fat
while 15% came from saturated fat. The rules lower that percentage
to 30%, with no more than 10% coming from saturated fat. The rules,
proposed by the USDA, are expected to appear in the Federal Register
this week. The public will have 90 days to comment.
Robert Pear, "U.S. Proposes Healthier Food at All Schools," NEW YORK
TIMES, June 7, 1994.
CORPORATE NEWS
The second largest food wholesaler in the U.S. will buy the country's
third biggest for $1 billion. The Fleming company announced its
intention to buy Scrivener from its German parent company Franz
Haniel. The move will push SuperValu, formerly the country's
largest food wholesaler, into the number two spot. The purchase of
Scrivener is expected to bring Fleming a combined annual sales total
of $19 billion.
The chemical and pharmaceutical company Sandoz announced
recently its intention to acquire the Gerber Products Company for
$3.7 billion. Gerber is a producer of baby food products and holds
70% of the U.S. market share, worth $1.2 billion in annual sales.
Neogen, a Michigan-based company, which develops products it
markets as having the ability to control residues for the food and
agriculture industries, is expected to announce a buyout of the New
Jersey-based Ampcor company. Ampcor makes a test for detecting
the presence of food borne pathogens. "Our interest is this
technology and getting diagnostic tests that can be used in food
safety," said Neogen spokesperson Lon Bohannon. He said consumer
fears over food safety drove the company to purchase Ampcor.
Source: Richard Tomkins, "U.S. Food deal Creates Leader,"
FINANCIAL TIMES, June 2, 1994; "Sandoz to Buy Gerber for $3.7
Billion," Farming Today, UPI, May 24, 1994; "Neogen to Buy N.J. Food-
Testing Firm," UPI, June 2, 1994.
_____________________________________________
RESOURCES
_____________________________________________
The USDA's Economic Research Service publishes FOODREVIEW three
times a year. The publication examines issues related to food and
nutrition such as dietary guidelines, the benefits of fiber and the
food industry. Subscriptions are $17/year. Fore more information,
contact FoodReview, Room 228 USDA, 1301 New York Avenue NW,
Washington, D.C. 20005.
Another USDA publication, AGRICULTURAL OUTLOOK, examines the
issue of seafood safety in the May 1994 edition. Subscriptions are
$42/year. To order, contact ERS-NASS, 341 Victory Drive, Herndon,
VA 22070.
_____________________________________________
CALENDAR OF EVENTS
_____________________________________________
CUISINE, AGRICULTURE AND SOCIAL CHANGE, June 9-12, 1994,
Tucson, AZ. FFI, contact: Gerry Walter, 59 Mumford, 1301 West
Gregory Drive, Urbana, IL 61801, Tel: (217) 333-9429, Fax: (217)
244-7503, email: walter@cc-mail.agcomed.uiuc.edu.
CONSUMER FEDERATION OF AMERICA'S 24TH ANNUAL AWARDS
DINNER, June 21, 1994, Washington, D.C. FFI, contact: CFA, 1424
16th Street NW, Suite 604, Washington, D.C. 20036.
WOMEN, FOOD AND AGRICULTURE, June 24, 1994, Loveland, OH. FFI,
contact: Audrey Sorrento, 932 O'Bannonville Road, Loveland, OH
45140, Tel: (513) 683-2340.
_____________________________________________
Produced by: Michelle Thom, Institute for Agriculture and Trade
Policy, 1313 5th Street SE Suite 303, Minneapolis, MN 55414, Tel:
(612) 379-5980 Fax: (612) 379-5982 EMail: mthom@igc.apc.org or
mmthom@alex.stkate.edu. In addition to this news bulletin, the
Institute publishes a variety of news bulletins on agriculture, the
environment and international trade. All bulletins may be
reproduced and distributed freely without prior permission as long
as proper attribution is included. A copy of any publication in which
an IATP bulletin is cited would be appreciated.