Thursday, December 17, 2015
National Public Radio
Follow The Money: Congress Uses Budget Bill To Rewrite Food Policies
By Allison Aubrey and Dan Charles
When lawmakers — and lobbyists — use the budget bill as a vehicle to slip in new policies or upend regulations, it reminds me of my kids at the grocery store.
They ask for Nutella. I say “No.” But when I’m not looking, they slip it into the cart. And it’s only the next day I see it slathered on toast.
So, here are some examples of food and agriculture provisions that have been slipped into the omnibus budget bill just unveiled by congressional leaders. So far, this is just a draft. But the bill appears likely to pass in both chambers of Congress, and President Obama has indicated he’s inclined to sign it into law.
One provision would give grocery stores and other food retailers more time to comply with regulations that will require them to post calorie information on menus. This provision could benefit pizza chains that have joined together to lobby for flexibility. The industry has argued that it would be too tough to comply, because a pizza has millions of possible topping — and calorie — combinations, and few customers actually order in-store anywhere. (The industry spells out its case in this video.)
Another example: a provision to change FDA policy on “partially hydrogenated oils so that the baking industries and small businesses are not subject to frivolous lawsuits.” As we reported in June, the Grocery Manufacturers Association has said it would ask the FDA to allow some low-level uses of trans fats in certain products.
Another issue: school lunch regulations. One provision gives schools flexibility in how they implement nutrition standards aimed at putting more whole grains on kids’ plates, as spelled out in the Healthy, Hungry-Free, Kids Act. Another provision could halt further reductions in the sodium content of school lunches.
It’s not uncommon for the spending bill to include a grab bag of nonbudgetary items thrown in at the last minute. And depending on what side of an issue you’re on, it’s either a highly effective process or an unfair way to assert influence and undermine laws.
Take the whole grain issue. The School Nutrition Association, which represents school food administrators and has been lobbying for these changes, views this as a win. In its view, the changes provide schools with the flexibility needed to keep their cafeterias operating in the black.
“By maintaining menu planning flexibility in the Omnibus Appropriations Bill, Congress is helping schools manage some of the challenges they have encountered under updated regulations,” Diane Pratt-Heavner, a spokeswoman for the SNA, told us by email.
But public-health advocates have criticized the SNA’s requests as a rollback of the Healthy, Hungry-Free Kids Act.
“Given the good progress that schools are making to improve school foods, the rider is unnecessary,” says Margo Wootan of the Center for Science in the Public Interest. “Less than 10 percent of schools are asking for waivers to the whole grain requirements, and over 95 percent have reduced the sodium content of school lunches.”
Dietary advice is only the start of this spending bill’s impact on food policy.
The bill also will abolish the requirement that meat labels disclose where an animal was raised and slaughtered. Big meat packers have been pushing for this change, as have foreign countries. The World Trade Organization has ruled that these labels hurt farmers in Canada and Mexico, and those countries were set to impose up to $1 billion in retaliatory tariffs on U.S. goods. Repealing the law should end this trade dispute.
The Food and Drug Administration is also happy. It just finished drawing up new rules for farms and food processors, but it needs money to enforce those rules. This bill would give the agency close to what it requested — an increase of $104.5 million — to beef up its food-safety operations.
Supporters of Vermont’s GMO labeling law, which is set to go into effect next year, breathed a sigh of relief. Some big food companies have been pushing Congress to pass a law that would block state attempts, like Vermont’s, to require labeling of food made from genetically modified crops. There were rumors that the spending package would contain such language, but it does not.
The spending bill may also delay the arrival of genetically engineered salmon, which just got a green light from the Food and Drug Administration. There’s a provision in the bill that blocks any commercial sale of those salmon until the FDA finalizes its guidelines for labeling GMOs. Finalizing those guidelines could take months — or even years.
2015 now USA’s costliest wildfire season on record
By Doyle Rice
The 2015 wildfire season is now the costliest on record, with $1.71 billion spent to fight the blazes, the U.S. Forest Service said Wednesday.
The previous record of $1.67 billion, adjusted for inflation, was set in fiscal year 2002, U.S. Department of Agriculture communications director Matt Herrick said. (The Forest Service is part of the U.S.D.A.)
With the season nearly over, 9.8 million acres burned in 2015, the second-highest total since records began in 1960, according to the National Interagency Fire Center in Boise, Idaho. Only 2006, with 9.87 acres charred, had a higher total.
In addition, seven forest service firefighters died this year battling wildfires. Since 2000, on average, 18 firefighters have died each year fighting flames, the fire center reports.
Most of the fires hit the West and Alaska, which is typical. The size of the area burned this year is roughly equivalent to the states of Massachusetts and Connecticut combined.
Over the past 10 years, the Forest Service has spent $1.13 billion on average each year to fight wildfires. That amount does not include local or state costs to fight fires.
Nor does it include other federal agency firefighting costs. Agencies such as the Bureau of Indian Affairs, the Bureau of Land Management, the National Park Service and the U.S. Fish and Wildlife Service also chip in, though the Forest Service contributes the most.
Because of the cost of fighting fires, the Forest Service has been forced to tap other funds, such as forest-thinning projects, in order to keep up with the massive blazes, according to a report released by the agency in August.
The Wildfire Disaster Funding Act — a bipartisan effort that would have treated wildfires more like other natural disasters and ended the transfer of money from other programs to battle the blazes — did not make it into the federal budget released this week, though there are hopes it can be revived next year, Herrick said.
“The future trend will be hotter, longer, and more severe and ultimately more costly fire seasons, which directly impacts the Forest Service’s ability to fund other critical work such as restoration that can reduce wildfire threat, drinking water area protection and recreation investments,” Herrick said.
Fresno Business Journal
Ag Secretary Ross visits Fresno to promote food bank program
By George Lurie
California Department of Food and Agriculture Secretary Karen Ross visited Fresno Wednesday to support the California Association of Food Banks’ Farm to Family program, which donates millions of pounds of food annually to needy Californians.
“This program matters so much,” said Ross, speaking at a Wednesday morning press conference held at the Fresno Community Food Bank.
A Nebraska native, Ross has been the state’s secretary of food and agriculture since 2011. Prior to joining CDFA, she served as chief of staff for U.S. Agriculture Secretary Tom Vilsack and also was president of the California Association of Winegrape Growers and vice-president of the Agricultural Council of California.
Speaking in the cavernous Fresno Community Food Bank warehouse, which contained thousands of tons of recently donated produce, Ross said, “The state’s farmers and ranchers are incredibly generous. In the middle of the drought, they still increased their contributions to community food banks this year.”
Andy Souza, CEO of Fresno’s Community Food Bank, noted that more than 5 million Californians — and more than half a million Valley residents — “suffer from hunger during some part of the month. Hunger is an epidemic throughout our Valley,” Souza said. “We see it in every neighborhood we serve.”
Souza said the California Department of Food and Agriculture, along with California Grown, Ag Against Hunger and the Young Farmers and Ranchers Committee, have joined with the California Association of Food Banks to increase the amount of Farm to Family program contributions to food banks around the state to 200 million pounds annually.
“This partnership is making a huge difference in our fight against hunger,” Souza said.
Lundberg Farms, Harris Ranch, Fowler Packing, the California Olive Commission and TD Produce Sales were among the local companies credited for their generous donations to the Farm to Family program.
Ryan Jacobsen, CEO of the Fresno County Farm Bureau, also spoke briefly during the event. “This is an issue we can solve,” he said. “It’s absolutely amazing how many area farmers and ranchers have stepped up” to participate in the Farm to Family program.
Souza noted that when the Fresno Community Food Bank was founded in 2010, the organization donated 3 million pounds of food to needy residents the first year it was in operation.
“We’re now at 17 million pounds of fresh produce a year and our goal is to get to 40 million pounds,” Souza said.
Jim Bates, CFO at Fowler Packing, helped start the Farm to Family program. “I’m very proud and honored to be part of this,” he said. “We need to get more farmers on board.”
Calling Secretary Ross “a champion of food access issues” for Californians, Sue Sigler, executive director of the California Association of Food Banks, added, “People that we serve are working hard every day just to make ends meet. Doing the right thing isn’t always easy.”
Secretary Ross agreed and said, “It’s incredibly important that we take this moment to say thank you and honor the people that grow it, pick it, pack it and deliver it to these needy families.”
Los Angeles Times
After drought and warmer weather, local farmers are taking time off
By Gillian Ferguson
Four years of drought and unusually warm weather have exhausted the patience and the resources of many local farmers, and the result is empty farm stands at Southern California farmers markets. For the first time in 30 years, farmers Jerry Rutiz of Rutiz Family Farms in Arroyo Grande and Chris Caldwell of Tutti Frutti Farms in Lompoc are taking time off.
Last December, Tutti Frutti hauled eight tables’ worth of winter crops to the Wednesday Santa Monica and Sunday Hollywood farmers markets. This year, its broccoli, cauliflower, leeks and spinach were decimated before they could be harvested. Saturday’s Santa Barbara market will be the farm’s last market until April; Wednesday sees the last trip to the Santa Monica market.
“It was bugs,” said Barbara Whyman, who has been selling produce for Tutti Frutti for three decades. “They just cleaned us out.” Whyman said warm temperatures and a lack of rain allowed pests to flourish.
The bagrada bug, a pest that was discovered in California in 2008, has been a particular nuisance, devouring acres of brassicas such as broccoli, kale and Brussels sprouts. In years past, the bagrada population was kept at bay thanks to cool summer evenings and hillsides of wild mustard that distracted the bugs from row crops. But this year, warmer evening temperatures and bone dry hillsides left farmers exposed.
“There are no natural predators, and so far there is no organic solution,” Whyman said. “I know one farmer who is just walking through the field with a blow torch. I guess that’s an organic solution, but he’s a small farmer. We couldn’t do that.”
Rutiz agreed that this fall was worse than previous years’. “We saw the bagrada bug starting in springtime and it was really bothering us up until a month ago,” he said. He said that rather than fighting the pests, he converted 15 of his 28 acres to cover crops and plans to reevaluate his plantings for spring.
In addition to bugs, water shortages continue to be an enormous hurdle for farmers. When Goleta water rates tripled in August, Tim Heuer at Fairview Gardens decided to take an extended leave of absence from the Wednesday Santa Monica market. Frog Hollow Farm in Brentwood, Calif., (not to be confused with Brentwood in Los Angeles) reduced its market visits to every other week when the water bill jumped from $20 per acre-foot to $650 per acre-foot.
Produce buyers lament that it has been substantially more difficult to find product this year. FreshPoint’s Karen Beverlin visits the Wednesday Santa Monica market every week, looking for specialty items for high-end restaurants such as Per Se in New York and Providence in Los Angeles. She said that this year she has to explain to chef clients that all bets were off; she simply didn’t know what she’d find.
“It’s frustrating for us, but it’s devastating for the farmers,” Beverlin said. “We’re just going to find something else, but for farmers it’s a serious situation. They can’t just go put something different on the menu.”
Citrus growers escape damage from hard freeze
By Elizabeth Sanchez
Despite the harsh weather predictions, Central Valley citrus growers are thanking Mother Nature for her gift of manageable weather.
On Tuesday, the National Weather Service issued a hard freeze warning for late Tuesday night and early Wednesday morning, which worried the trade group California Citrus Mutual.
But, to their benefit, “a decent cloud cover created a strong inversion layer in most citrus producing areas, helping to keep grove temperatures in a manageable range,” reported California Citrus Mutual in a news release.
Growers ran wind machines the night of the warning to disperse the inversion layer. The machines increased the temperatures into the upper 20s to low 30s, an ideal temperature during this time of year, wrote the trade group.
The rain from earlier this week also helped the citrus fruit. The moist soil holds heat, which came in handy just before the cold night on Tuesday, reported California Citrus Mutual in the news release.
Unlike previous years, when the cold damaged millions of dollars in produce, the trade group doesn’t expect harm from the cold night on Tuesday.
The 2014 Kern County Agriculture Crop Report said citrus was the fourth-best selling commodity in the area, generating about $893 million.
Wall Street Journal
U.S. Businesses Worry Stronger Dollar May Weigh on Growth and Exports
Fed officials cite improving U.S. economy as they raise rates, but some don’t see it
American businesses fretted that the first interest rate increase in seven years came at a time when a strong U.S. dollaralready is sapping demand for exports and low energy and commodity prices are weighing on growth in the industrial economy.
The Federal Reserve’s move Wednesday to raise short-term rates by a quarter percentage point was hardly a surprise to U.S. executives, but it comes as industrial manufacturers such as 3M Co. and Honeywell International Inc. offer cautious sales forecasts, as agriculture commodities are in their third year of declining prices, as transportation firms contend with sagging freight volumes, and as food and beverage companies struggle with the strong dollar sapping sales growth.
In making its move to raise rates, the Fed pointed to a strengthening U.S. labor market, more robust household spending and increasing business investment, while noting that exports have been soft. The Fed officials said they expect more gradual rate increases in the coming years.
That assessment, however, didn’t jibe with what some businesses are experiencing.
“We’re worried because we’re seeing leading indicators showing the economy is not in great shape,” said Glenn Riggs, senior vice president at Odyssey Logistics & Transportation, which books freight transportation for businesses and operates a fleet of about 300 trucks. “If they raise interest rates and things further slow down, that would be a bigger worry.”
Freight volumes sagged this fall, as manufacturing activity slowed and retailers cut back on imports. Further interest rate hikes also could increase the cost of borrowing to upgrade trucking fleets, Mr. Riggs said.
Major businesses from AT&T Inc. to Johnson & Johnson to International Flavors & Fragrances Inc. played down the immediate impact of Wednesday’s rate increase on business prospects.
“I think to a certain extent, having 10 years with no interest rate increases is unnatural,” said General Electric Co. Chief Executive Jeff Immelt. “And I think what’s difficult is there’s just nothing inflationary. And I think that makes it harder for the regulators to figure out what to do.”
Longer term, however, further interest rate hikes could add to businesses’ borrowing costs, cool capital spending, and prompt a reassessment of inventory levels.
Jane Morreau, chief financial officer at Jack Daniel’s maker Brown-Forman Corp., said the real effect will be further strengthening the U.S. dollar—an issue that already is weighing on results at beverage alcohol companies.
Earlier this month, Brown-Forman said that it expects weakening foreign currencies in markets such as Russia and Australia to negatively affect results by 5 cents per share during its current fiscal year.
But Ms. Morreau said she trusts that the rate increase signals “an improving U.S. economy, which could benefit our business.” The U.S. accounts for about 40% of the company’s sales.
General Motors Co. and home improvement retailer Lowe’s Cos. said the Fed’s decision reflects the strength in the U.S. economy that the auto and housing industries have been experiencing.
“Auto sales are at a new peak,” a GM spokesman said. “We don’t expect the rate hike to have any measurable impact on new vehicles sales given the underlying strength of the U.S. economy.”
Lowe’s Cos. Chief Financial Officer Bob Hull said the prospect of higher mortgage and borrowing rates could prompt prospective home buyers to act sooner, and jolt some homeowners to splurge on major renovations.
Mr. Hull expects the housing market to only slow after the 30-year fixed mortgage rates exceed 6% from their current level of about 4%.
Still, many companies have been citing weak economic growth around the globe.
Honeywell forecast sales growth in its core businesses, excluding acquisitions, of just 1% to 2% next year largely due to the troubles in the oil and gas sector. “We’re exiting 2015 at a slower growth rates than we had anticipated at this time last year,” Chief Financial Officer Tom Szlosek said Wednesday before the Fed’s announcement.
U.S. farmers already struggling with lower prices of major crops such as corn and soybeans for the third consecutive year could be further hurt.
Rising global crop stockpiles and the strengthening of the dollar have weighed on U.S. grain exports. And a string of benchmark rate increases at a time when central bankers in Japan and Europe are easing monetary policy would further fuel the dollar’s rise, analysts said.
“If we see a rate increase, it just reinforces the economic health of the U.S. and reinforces the backing of a strong dollar, which is overall a negative for the farm segment,” said Joe Lardy, research manager for the brokerage unit of CHS Inc., the biggest U.S. farm cooperative.
Ron DeFeo, executive chairman of Terex Corp., a maker of cranes and other heavy machinery, said the Fed’s move was positive in that it “takes some uncertainty away.”
For now, weak commodity and oil prices have plunged parts of industry into “recession-like conditions,” Mr. DeFeo said, but consumers are doing better and their spending eventually should boost manufacturing.
Meanwhile, Ryan Lance, chief executive of ConocoPhillips, said that the interest rate increase, which the Federal Reserve hopes will spur inflation, is at odds with the current reality for energy companies, which are in the midst of aggressive cost cutting.
In “our business that’s a concept that is completely out of the radar screen right now,” Mr. Lance told an audience in New York at the Council on Foreign Relations. “I review every week what our deflation capture numbers are.”
—Brian Baskin, Tripp Mickle, Jacob Bunge, Ruth Simon, Joann S. Lublin, Bob Tita, Ted Mann, Ryan Knutson, Julie Jargon, Peter Loftus, Mike Esterl, Gautham Nagesh and James R. Haggerty contributed to this article.