No-Bull Food News

 

Download Food, Health and Community - UCCS February 15 2010 blog

Patrick Orr testimonial

 

The Promise of Sustainability, By Brian Snyder

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U.S. Cattle Industry Under Siege, By Bill Bullard

 

 
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The time has come to rein in agribusiness

 

by George Naylor

Opinion | Vernon Broadcaster

January 13, 2010

 

You might be shocked to learn that our dairy foods are controlled by three companies, corn seeds by two companies, and 90 percent of our beef by three companies.

 

On Dec, 31, 2009, I submitted comments to the Department of Justice and the U.S. Department of Agriculture regarding market concentration in agriculture. After 33 years of family-farm activism, I’ve grown cynical about prospects for the government putting the interests of family farmers and our environment ahead of agribusiness’ blind appetite for profit.

 

Some lawmakers have assured their vote-gathering among farmers by railing against Big Ag, saying that antitrust laws should be enforced and large corporations divided. Only hearings and studies resulted from this political engineering. Nary a word of the real concerns or proposals was delivered outside home districts, and token legislation moved not one inch through the hoops of Congress.

 

Also, if the federal farm bill and international trade policy continue to provide cheap feedstuffs like corn and soybeans for livestock, won’t giant feedlots and factory farms that buy all their feed continue to replace responsible, self-contained family farms with humane practices and crop rotation? At the same time, this policy leaves crop production to increasingly huge, industrial grain and oilseed plantations around the world. One example of plantation farming without farmers is currently being conducted in Brazil by a U.S. farmer cooperative!

 

According to my regional co-op’s slick newsletter, they formed a joint venture with companies in Japan and Brazil to buy 400,000 acres in Brazil (including virgin land) to grow corn, soybeans and cotton for export. No farmers will be involved, just 600 employees. No doubt this model is already sprouting here in the Midwest.

 

U.S. citizens have a choice: Accept an economic future dictated by the selfish interests of corporate managers and stockholders, encouraging extreme disparities of wealth and power with our environment destroyed around the world, or demand a strong democratic government dedicated more to the common good.

 

I would also like to challenge the rhetoric of some groups that blame all of our farm and food problems on concentration, because I believe it’s based on faulty economic thinking and unproductive solutions. First of all, if current concentration is today’s problem, how do you explain all the raw deals farmers received when there was much more competition in meatpacking, retailing and food processing? If the government solicited proposals for breaking up the monopolies, what level of competition would be ideal? Even if market returns to farmers improved somewhat, would that be enough?

 

Secondly, while it’s obvious that big corporations scheme to eliminate competition and short-change both producers and consumers, concentration can be the result of other forces. More transparency in corporate behavior and regulation enforcement by a powerful and democratic government is required. Otherwise, even after a breakup, the most ruthless, irresponsible corporations will pursue industrial processes that put all their competitors — particularly ethical individual businesspeople — at a disadvantage.

 

Likewise, if our agricultural policy results in an unpopulated rural landscape with all economic opportunities moved to giant metro areas, mass marketing will overpower small regional companies. This kind of lopsided economic development has already extinguished local and regional markets, clearing the way for a resumption of irresponsible corporate consolidation.

 

We may have the first chance in decades for every level of our government to seriously address the grievous effects agribusiness monopolization has on consumers, farmers and our environment. The efforts by Department of Justice and USDA to collect input and hold workshops, including the March 2010 one in Iowa, suggest that the government is listening. Nevertheless, we can settle for nothing less than comprehensive reform to restore our food sovereignty and democratic control of our farm and food system.

 

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In reading George Naylor’s insightful commentary this morning I find myself thinking about how vulnerable Haiti is to the devastation of last night’s earthquake. News reports speak of the terrible destruction and death loss in the poorly constructed Port-au-Prince. Meanwhile there is little damage or injury reported in the countryside.

 

Like many vulnerable under developed countries, Haiti has long been a victim of resource extraction and exploitation by multinational corporations. The land has been used up and abandoned through the same industrial export oriented agriculture that George describes. The people, having been forced from their rural homes, are living in severely overcrowded and unhealthy conditions, unable to grow the food necessary to feed themselves.

 

The same pillage of land and people has been occurring in the U.S. for at least the last thirty years. We are now a net importer of food, unable to feed ourselves. Our farm families, having been forced from their land with low prices, are living in overcrowded cities. We must breakup big agribusiness and retail food corporations. We must adopt government policy that ensures we will always have the ability to feed ourselves good food from our own communities and family farms.

 

Years ago, I asked USDA Ag Secretary Dan Glickman why he didn’t enforce the Packers and Stockyards Act, preventing the meat packer cartel we have today. He responded that we need big companies to do business globally. He was speaking for big agribusiness then. Hopefully this administration will respond differently today.

 

Thanks to George for his words of wisdom.

 

Mike Callicrate

 

Gilles Stockton offers input to USDA/DOJ Public Workshops on Competition in Agriculture

Gilles Stockton at Tri National Trade Conference 

 

December 21, 2009

 

USDA/DOJ Public Workshops on Competition in Agriculture

Comments by Gilles Stockton

Dear Sir;

I suspect that many of the comments received outline the regulatory and antitrust actions that the Departments of Justice and Agriculture should pursue. So, in that respect there is probably nothing new that I can contribute. I will instead explore why it is important that competition in agricultural markets be protected and enhanced.

There are two competing visions as to how U.S. production agriculture should be structured. The vision that has been in the ascendency for the past half century is one that claims, for reasons of efficiency, that agricultural markets should be dominated by a small number of large corporations. Individual farms, under this centralized corporate vision, should be vertically aligned with one of these controlling corporations and the only market that matters is at the retail level. The alternative vision is that the U.S. food system should be diverse and de-centralized. Farms, under this vision, would market their produce in competitive markets and each commercial entity in the chain, from farm to plate, should be responsive to competitive market forces.

If you, as the reader of this comment, and presumably a decision maker for regulatory and anti-trust actions, are not open to the de-centralized vision of agricultural production, then there really is no point to this exercise. Admittedly, it is difficult to ascribe to the de-centralized model because so little of the current structure of U.S. agriculture meets that criteria. Since the end of World War II, a period which incidentally encompasses my lifetime, U.S. agriculture transitioned from one where multitudes of family farms sold into competitive regional markets to one controlled by a small number of globally dominate corporations.

Adherents of the neo-liberal economic ideology applauded this transition at every stage of its de-evolution. Under the centralized corporate vision system, all consolidations in agricultural markets have been rational because the dominate firms are presumed to be exploiting economies of scale. The proof that this is true is that the retail consumer pays less for food.  Changes in the structure of agriculture and the disappearance of competitive markets at the production level were never a concern.  In the neo-liberal dogma, - because it happened means that it should have happened,  because the invisible hand of the market always results in the proper outcome.

However, the transition from de-centralized agriculture to one controlled by what has been described as a chain oligopoly/oligopsony did not happen without considerable influence seeking on the part of the multi-national corporations in question, coupled by active neglect and connivance on the part of Congress, government regulators, and federal judges. As a reluctant participant of this de-evolution, I can attest to the unremitting propaganda. “Get bigger or get out” was the very clear message to all family farmers. In the neo-liberal propaganda story line, corporate control of agriculture is modern and efficient while family farmers are part of folklore. Old MacDonald may have had a cow, pig, horse, and chickens and was a grandfatherly friendly guy but he was not up to the rigors of the market and the science of modern agriculture.

The Future and Climate Change

But conditions are changing and you, as reader and as a consumer of food, must ask yourself if you want to continue to put your future in the hands of a small number of multi-national corporations. Past US farm policy was predicated on the fact that farmers were growing more food than the market could absorb. The various iterations of the farm bill kept food cheap but provided enough production controls and subsidies to prevent the rural economy from going into free fall.

That was the past. The United States is now a net importer of food. Worldwide demand by an ever increasing human population is not being matched by increases in land under cultivation or increases in crop yields. In addition, changes in the world’s climate are already negatively affecting agricultural production. It is certain that the future will not have the same food security as did the past. So, we need to ask ourselves whether society will be properly served by an agricultural system controlled by a few dominate firms because one thing is for certain - multi-national agribusiness corporations will exploit food scarcities to their utmost benefit.

If the negative perception of family based agriculture was ever true we would not have an alternative structure to consider. The facts are, as measured by USDA itself, that agricultural efficiency in terms of both yields per acre and return on investment is the same over a large range of farm sizes with the largest farms tending to be least efficient. Throughout the 20^th Century and well before horizontal and vertical integration dominated agricultural markets, agriculture had the largest productivity increases of all of the major U.S. industries. Farmers do not need to be coerced by vertical integration to adopt new technologies. 

Farm size has increased because farm policy, banking policy, taxation policy, and anti-trust policy encouraged this transition. But the transition did not happen easily because farmers have historically been willing to exploit themselves in order to keep their land and independence. This country now has fewer than one million full time farmers, too few for the Census Bureau to bother counting. The absurdity is that most of these one million farmers own assets worth more than a million dollars, yet many still need to subsidize their farms with off farm employment. When I took over the ranch from my father in 1975, the farmer’s share was around 33 cents. Today the farmer’s share of the food dollar is down to 20 cents. The implication is clear. Food is cheap for the consumer, not because of efficiencies on the part of the controlling agri-business corporations, but because these corporations are able to keep the costs of the raw materials cheap by forcing farmers to exploit their own labor, mine their equity, and abuse their soil.

The big danger in this centralized agricultural system is that the decisions of what is to be planted are up to a board of directors with no particular interest in the problems that might result to the farmers or society. Their main interest is procuring food’s raw materials from farmers at the cheapest price possible and selling the finished product to consumers at the highest price they can manage. Farmers have little say in the matter because they must accept the prices and production contracts offered or they will not get the financing needed to put the next crop in the ground. This is a system that forces specialization and the planting of mono-cultures over vast territories. Precisely the opposite of what we need in a climatic situation that is changing in unpredictable ways. The food consumer of the future would be better served by an agricultural system where the decision maker is knowledgeable about local conditions and flexible enough to experiment with alternative crops and farming systems.

Electronic Markets

Now that just a few firms control the marketing systems for all major food crops it is not necessarily easy to re-impose competition. However, over the last 25 years the development of the worldwide web provides a technological methodology that could be transformative to agricultural markets. Internet based auction and market exchange have the potential of being very inexpensive and efficient price discovery systems for agriculture. One of the beauties of a blind bid market is that it is size neutral. Government regulators and the political system do not have to make a judgment whether a particular size or technology represents the best economies of scale. If the marketplace is truly competitive and the bidding system is blind - small farms, small firms, and small retailers can participate on an equal footing with larger counterparts. The market will, in this case, decide what are appropriate economies of scale and technological innovations.

Unfortunately, you, as an anti-trust regulator, do not have the authority to impose open competitive web based market systems on the agriculture industry – except in one case. The Packers and Stockyards Act (P&SA) states that:  

It shall be unlawful for any packer or swine contractor …or for any live poultry dealer:   

• Engage in or use any unfair, unjustly     discriminatory, or deceptive practice
• Make or give any undue or unreasonable preference or advantage …or unreasonable prejudice
• Sell … or buy … for the purpose or effect of manipulating or controlling prices, or of creating a monopoly
• Engage in any business… for the purpose or   with the effect of manipulating or controlling prices.

USDA will soon be publishing proposed rules as to what constitutes undue preference under the Packers and Stockyards Act. Presumably this will consist of a long list of practices that the monopoly packers cannot do. However, to my mind, what is more important is what they can do that does not constitute undue preference. Packers can bid for live cattle and for forward contacts for the delivery of cattle in an open competitive market. Understandably, they are reluctant to do so because packers prefer the vertically integrated model pioneered by the poultry industry.

Cattle Ranching

The cow-calf segment of the cattle industry has a number of unique aspects not shared by the rest of agriculture. To begin with it utilizes the “left over” land – the land not otherwise suitable for tillage. In the plains adjacent to the Rocky Mountains this gives cow-calf production an extensive rather than intensive character. Cow-calf production can be said to be the only environmentally sustainable aspect of mainstream agriculture. Those involved in organic and natural farming are finding sustainable technologies for what is still a niche aspect of agriculture, but cow-calf operators have been sustainably raising cows, nurturing the growth of range grasses, and protecting watersheds for the better part of the 20^th century.

The extensive nature of cow-calf production makes it resistant to the forces that would vertically integrate it as in the case of poultry, hogs, dairy, or cattle feeding.  One cannot economically raise beef cows in a “factory farm.” The packers probably do not want to assume the high capital costs of owning and operating their own cow-calf system. In that respect they would just as soon have independent ranchers foolish enough to supply them will feeder calves – as long as the ranchers are not too independent.

Another aspect that makes cow-calf ranchers unique is the reliance on auctions for the marketing of the feeder calves and cull cows. Grain farmers were never that tied to a public competitive market because the floor price and loan rates imposed by the government programs determined the prices received. Produce farmers often market through production contracts, not auction markets. Poultry and hog producers are, of course, now vertically integrated and don’t have access to any kind of public price discovery system. Only cow-calf producers continue to sell through public organized markets. Besides the physical auction barns that sell for immediate delivery and payment, many feeder calves are sold through satellite/internet video auction markets where contracts for the future delivery are negotiated through a virtual auction.

The problem cow-calf producers face is that the prices we receive are less and less competitively derived.  Three packers effectively control the market. The feedlots from which packers procure fat cattle are, for the most part, vertically aligned with one of the three packers. The packers, in turn, sell to a retail grocery system almost as concentrated as they are themselves. Everyone, therefore, calculates from the retail price for beef, adds their margins and profits, and what is left is what is offered for the feeder calves. However, because of the Illinois Brick Decision, cow-calf ranchers do not have standing to complain on an anti-trust basis because theoretically, feedlot operators sit between cow-calf ranchers and the beef packers.

Captive Supplies

Cow-calf ranchers have focused on “captive supply” as the major problem to be fixed in the cattle market. The term “captive supply” encompasses a number of procurement practices but the practical result is that they all amount to formal and informal vertical integration on the part of the feedlots supplying the packers. In 1999 USDA released the “Economic Analysis of Fed Cattle Procurement in the Texas Panhandle” study which found that for each 8.8% increase in “captive supply” there was a $0.69 decrease per hundred weight (cwt) in prices. In a famous admission during one legal complaint brought by cattle producers, the CEO of IBP (the dominant packer at the time – since sold to Tyson) admitted that during some weeks his company had up to 118% of cattle committed through one form of “captive supply” or another.   

Clearly “captive supply” harms the market for the feeder calves I sell. Sixty nine cents per cwt may not sound like much, but if one calculates the situation where “captive supplies” are at 88 percent, a 1,250 pound steer at slaughter will have been priced $86.25 less than it should have under a competitive market situation. Historically feedlot operators were generally happy with a $86 profit per head. Selling at a net loss can’t go on for too many years before the independent feedlot owners see that there is little in the business of feeding cattle that benefits them and they either close their feedlot or start feeding exclusively for one packer. Of course, during the process, feedlot operators are very careful about what they are willing to pay me for feeder calves.

The Texas Procurement Study (as it was called) clearly showed harm to the industry but nothing was ever done about it. The harm it showed was in the narrow range of prices in which cattle were selling. The study, however, did not determine whether that selling range was lower than it should have been if the cattle market was not so non-competitive.

In 2003 we had a test of that phenomenon when cattle from Canada were banned from entering the United States because of Mad Cow Disease (Bovine Spongiform Encephalopathy). Once the import ban was imposed there was an immediate 27% jump in fat cattle prices (from $67 to $85 cwt). The standard assumption on the part of livestock economists is that for every 1% increase or decrease in cattle supply, the market will move 1.5 to 2%. Since the Canadian cattle amounted to around 3% of the supply, we expected prices to increase by around 6%. So how can we account for the other 21% increase other than the overall effect of captive supplies on the market—given that all of the Canadian cattle were “captive.” For once something happened in the market that benefited me. What looks to have happened is that with the sudden loss of Canadian captive supply, the packers temporarily lost control of the market. Six years later they have recovered control and cattle prices are again down by 25 to 30%.

Last year we experienced what happens when banks get “too big to fail”. One lesson is that apparently they also become “too big to regulate” because they own the government. It is pretty clear that beef packers have been “owning” their part of the government for the last three decades. The question before us is when will this stop? The tools are clearly in place to restore competition to the cattle markets and it will not require a big, complicated anti-trust case designed to break them up. USDA is already working on proposed rules to define undue preference under the Packers and Stockyards Act. I hope that these proposed rules are comprehensive. All that will be needed in addition is adoption of the petition for rulemaking submitted by the Western Organization of Resource Councils in 1996. This petition is still pending a ruling by the Secretary of Agriculture and basically would require that packers competitively bid for cattle supplies in a public open and competitive electronic market. The WORC rule would amend the Packers and Stockyards Act to:

1)    prohibit packers from procuring cattle for slaughter through the use of a forward contract, unless the contract contains a firm base price that can be equated to a fixed dollar amount on the day the contract is signed and the forward contract is offered or bid in an open, public manner and;

2)    prohibit packers from owning and feeding cattle, unless the cattle are sold for slaughter in an open, public market.

 

The beauty of these two proposed rules to amend the Packers and Stockyards Act is that they are purely competition enhancing measures and clarify an already existing law.

 

Sincerely yours,

Gilles Stockton

Stockton Ranch

Grass Range, Montana 59032

406 428-2183

gillesstockton@gmail.com

 

Gilles speaking at Tri National Trade Conference

“LOCAL” – A word worth saving!

By Mike Callicrate

In the newly released food film, Fresh, Russ Kremer proudly proclaims, “They [consumers] want my pigs…they want my product!” Russ is a long time hog farmer who decided that doing what is best for the hogs, as well as the people who eat his pork, is what matters, even though it’s more work and more costly.  The day that someone discovers the difference between the pork Russ produces from his family farm in Missouri, considered to be the ultimate in hog heaven, and the industrial factory farms of Smithfield, is a day to celebrate. It has been a long time coming. Since 1980, the struggles have been enormous with more than 90% of our hog farmers and more than 40% of our cattle operations being stomped out of business under the heavy foot of big factory farm conglomerates like Smithfield, Cargill and Tyson and their retail partners.

These global corporations externalize enormous costs onto the public. With their abusive market power they buy livestock far below the cost of production. They don’t pay a living wage to their workers. They use our land and water as an industrial sewer. Farmers and ranchers who care about the land, animals, food quality and the communities they live in can’t compete on price because they pay the true cost of production.

Today, thanks to valuable books like Fast Food Nation and Omnivore’s Dilemma along with compelling and inspirational films such as Food Inc. and Fresh, many more people are making the discovery that good food from real farmers, who they actually know, can make a huge difference in their lives and communities.

More and more people are voting with their forks to support a better food system, and even though the food they are eating costs more than the factory food, it is also more valuable. The food tastes better, is more satisfying and healthier.  Also, they can know and trust the farmers and ranchers who grew it.

Of course, the professional marketers for the industrial food companies are working to co-opt the new terms and messages. The multinationals have already stolen, misused and redefined words and phrases like natural, sustainable, organic, family farm and humanely-raised.  Attempts to bring better food to the table have been frustrated and bankrupted by the power of big agribusiness, big food service and big retail. From the clean Colorado beef of Mel Coleman to the high quality, humanely raised pork of Bill Niman, to the independent produce growers of Colorado’s Arkansas Valley, all such attempts to differentiate the better quality local food are attacked with false and misleading marketing. The only thing that remains of the once authentic and trustworthy brands of Coleman and Niman are their names — the conscientious and devoted ranchers who launched these companies are no longer connected in any way. These “zombie” brands are a ghost of what they once stood for.

These corporations are now trying to do the same with LOCAL. They simply repackage and dress up the same old products and sell them at cut-rate prices to deceived but excited buyers. Some of these disillusioned consumers will revert back to the same old factory food, and others will continue searching in hopes of finding food they can trust.  It is time to put an end to the dishonesty that drives the industrial food system. 

Looking Local, Buying Global

From Wendy’s “Better than Fast Food” to Chipotle’s “Food with Integrity” to Whole Foods “I’m A Local,” eaters are being played for fools and family farmers and ranchers with better and healthier food alternatives can’t find A FAIR MARKET. When the educated consumer starts demanding “local,” the corporate marketing departments change the words on the packaging, but the inflexible, ravenous supply chain continues to get its low cost industrialized food from wherever in the world it is the cheapest. Without access to a fair market, family farmers sell what they can at local farmers markets — generating far less than what is needed to make a living.

Local food is even kept out of locally owned restaurants. Francisco Chavez, who works with Ranch Foods Direct and local growers to deliver meat and produce to Colorado Springs restaurants, watches the passing stream of much bigger corporate food service trucks and observes: “Sysco delivers cheap food from somewhere else and hauls the money away.” This has always been true of chain restaurants, but national distributors like Sysco and U.S. Foods prevent local food from entering even independent restaurants.

Locally owned eateries, best positioned to accommodate local suppliers with their advantages of on-site decision making, flexible menus, portion control management and pricing, have been trained too long to only consider one thing — price. Most don’t realize how dramatically food quality has declined under the industrial food system. They, too, often hide behind the false and misleading marketing provided by their food service company. They are persuaded with complimentary trips to fancy food shows where special offers are made, if they will commit to long-term exclusive deals — a move intended to eliminate competition and the possibility that local suppliers will claim more of the market. Attractive labels, catchy family farm slogans, clean sounding names like Emerald Valley, the too-many-to-mention but essentially meaningless Angus beef brands, and local sounding, seemingly trustworthy names like Harris Ranch Beef, are misleading restaurants into buying the same old stuff in a new and prettier box. Food service companies certainly don’t reveal what they are really doing — feeding people junk while they gut the community. There is little difference in economic and social impact between a chain restaurant and a locally owned restaurant that buys everything out of the back of a Sysco or U.S. Foods truck.

Controlling the market, mixing the message and confusing the eater

The desire to buy local, know your farmer, and know where your food comes from, is the best opportunity yet to make meaningful improvements in our food system. So how does Big Food take advantage of “LOCAL” while blocking competition and the access needed by local farmers and ranchers to market to independently owned restaurants and retail food stores? One recent illustration is the actions of a major food service company doing business in Colorado. They are buying a token amount of local produce in Colorado and selling it below cost to their restaurant customers. Of course these full-line companies control the pricing of the many items they provide and are able to adjust to maximize profits. This is an unfair market-distorting practice. To some, this may look like a benevolent act, but it is purely a move to control the market. Shouldn’t people who eat decide the winners and losers in the marketplace, rather than global corporations?

Big retailers like Wal-Mart and Whole Foods know the marketing benefit of using local family farmers to enhance their image while they continue to sell cheap food and drive down prices paid to farmers. Supply and demand signals are being blocked. Consumers are unable to make good choices based on origin, quality and price. Family farmers are shut out of the local market while their picture hangs above the imported meat and produce. The new local and regional food systems we so desperately need will continue to die in their infancy unless fairness, transparency and truth in advertising are restored to the marketplace. It should be impossible for an establishment to proclaim itself “LOCAL” when serving farmed Asian seafood, Tyson chicken, beef from Brazilian corporate giant JBS, Mexican produce and Chinese garlic.

Hope may have finally arrived

A predatory marketplace, with powerful global corporations placing profits over ethics and integrity, has blocked family farmers and ranchers from connecting with local eaters for too long. This could change with U.S. Secretary of Agriculture Tom Vilsack’s launching of USDA’s new “Know Your Farmer, Know Your Food” initiative. Secretary Vilsack says that rebuilding rural America is his number one priority. A big job, considering after the last 50 years of pillage by big agribusiness, rural America in many respects resembles the Gulf Coast after Hurricane Katrina.

Perhaps Mr. Vilsack recognizes the enormous wealth-creating potential and critical food security benefits of local food from our own family farms and ranches. I know that Dudley Butler does. He is a long time independent cattleman and defender of fair and open markets. Mr. Butler was recently appointed to the potentially powerful position of administrator for GIPSA (Grain Inspection, Packers and Stockyards Administration), the agency within USDA charged with protecting competition in the marketplace – a job left unattended for decades.

Mr. Butler said recently, “Corporations are like sharks, they swim and eat. That’s what they do.” Perhaps Mr. Vilsack and Mr. Butler, in acknowledging the need to regulate the shark-infested waters of our food system, will work with other agencies in the administration, from Health and Human Services to the Justice Department and the Federal Trade Commission, to create a healthier, more sustainable food system with good food from local family farms. I hope so. We desperately need a new close-to-home food model that eaters can trust and that better serves the economic, nutritional and health interests of our communities and our nation. But, we are going to need some industrial strength shark cages! Secretary Vilsack and Butler will also need protection from the aggressive and bloodthirsty DC sharks, known as corporate lobbyists, who intend to keep things the same.

Mike Callicrate is an independent cattle producer, business entrepreneur and political activist, particularly outspoken in addressing the rural and social impacts of current economic trends.

Where's the Money? From Farming and Ranching to Retailing

 

Download Food - Farming to Retailing - 8-30-09 PDF version

It's the national security issue no one is talking about.

Warning: GMA likes the food safety bill - A bill contrary to family farm agriculture and local food alternatives

A gathering of the rich and powerful in the food business:

 

A few of the jets attending the conference:

N7100C – Cargill

N199HF – Hormel Foods

N97SJ – J.M. Smucker

N1897S – J.M. Smucker

N135FT – Albertson’s

N46E – Hunt

N604CL – Hershey

N654CM – Crossmark Corp.

N457H – Bank of America

N606RP – Nestle Purina Pet Care Co.

N102CX – Clorox

N545CS – Wells Fargo

N604MU – Dean Mfg. Group

Note: Walmart gave a speech on sustainability during the conference.

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FOR IMMEDIATE RELEASE

GMA Applauds U.S. House for Passage of Landmark Food Safety Bill~Calls on Senate to Follow Suit

Contact:
Scott Openshaw, Director, Communications, 202-295-3957
Brian Kennedy, Director, Communications, 202-639-5994

July 30, 2009

GMA president and CEO Pamela G. Bailey today commended the members of the United States House of Representatives for passing H.R. 2749, The Food Safety Enhancement Act of 2009. The bill passed the House by a vote of 283-142.

“House passage of The Food Safety Enhancement Act of 2009 marks an important milestone,” said Ms. Bailey. “This legislation will strengthen our nation’s food safety net by placing prevention as the cornerstone of our nation’s food safety strategy and providing FDA with the resources and authorities it needs to adequately fulfill its food safety mission. Combined with increased industry resources and vigilance, this legislation represents a once in a lifetime opportunity to modernize our food safety system and restore the public’s faith in the safety and security of the food supply.

“We applaud the House for its vision and leadership in tackling this tough issue and urge the Senate to swiftly follow suit and pass its food safety bill as quickly as possible.”

GMA supports many of the provisions of S. 510, the FDA Food Safety Modernization Act, authored by lead sponsors U.S. Senators Richard J. Durbin (D-IL) and Judd Gregg (R-NH) and co-sponsored by Edward M. Kennedy (D-MA), Richard Burr (R-NC), Christopher J. Dodd (D-CT), Lamar Alexander (R-TN), Amy Klobuchar (D-MN) Saxby Chambliss (R-GA), Roland Burris (D-IL), Johnny Isakson (R-GA) and Tom Udall (D-NM), and will be working with HELP Committee Chairman Kennedy, Ranking Member Enzi and the entire committee in the coming weeks to develop and enact sensible, meaningful and timely food safety reform legislation.

###

The Grocery Manufacturers Association (GMA) represents the world’s leading food, beverage and consumer products companies. The Association promotes sound public policy, champions initiatives that increase productivity and growth and helps to protect the safety and security of the food supply through scientific excellence. The GMA board of directors is comprised of chief executive officers from the Association’s member companies. The $2.1 trillion food, beverage and consumer packaged goods industry employs 14 million workers, and contributes over $1 trillion in added value to the nation’s economy. For more information, visit the GMA Web site at www.gmaonline.org

Meanwhile, back on the farm….

 

 

The corporate co-opt of 'local'

When big-box stores consider the 'L' word a winner, lots of people lose

By Stacy Mitchell

 

 

Brienne Boortz

Each Monday, Homegrown on Tejon offers small-plot produce from the area to downtown shoppers.

HSBC, one of the biggest banks on the planet, has taken to calling itself "the world's local bank." Winn-Dixie, a 500-outlet supermarket chain, recently launched a new ad campaign under the tagline, "Local flavor since 1956." The International Council of Shopping Centers, a global consortium of mall owners and developers, is pouring millions of dollars into television ads urging people to "Shop Local" — at their nearest mall. Even Walmart is getting in on the act, hanging bright green banners over its produce aisles that simply say, "Local."

Hoping to capitalize on growing public enthusiasm for all things local, some of the world's biggest corporations are brashly laying claim to the word "local."

This new variation on corporate greenwashing — local washing — is, like the buy-local movement itself, most advanced in the context of food. Hellmann's, the mayonnaise brand owned by the processed-food giant Unilever, kicked off an "Eat Real, Eat Local" initiative in Canada this summer. The ad campaign seems aimed partly at enhancing the brand by simply associating it with local food. But it also makes the claim Hellmann's is local, because it "uses Canadian eggs and canola oil from the prairies."

It's not the only industrial food company muscling in on local. Frito-Lay's new television commercials use farmers as pitchmen to position the company's potato chips as local food, while Foster Farms, one of the largest producers of poultry products in the country, is labeling packages of chicken and turkey "locally grown."

Corporate local-washing is now spreading well beyond food. Barnes & Noble, the world's top seller of books, has launched a video blog site under the banner, "All bookselling is local." The site, which features "local book news" and recommendations from employees of stores in such evocative-sounding locales as Surprise, Ariz., and Wauwatosa, Wis., seems designed to disguise what Barnes & Noble is — a highly centralized corporation where decisions about what books to stock and feature are made by a handful of buyers — and to present the chain instead as a collection of independent-minded booksellers.

Across the country, scores of shopping malls, chambers of commerce and economic development agencies are also appropriating the phrase "buy local" to urge consumers to patronize nearby malls and big-box stores. In March, leaders of a new Buy Local campaign in Fresno, Calif. assembled in front of the Fashion Fair Mall for a kick-off press conference. Flanked by storefronts bearing brand names like Anthropologie and the Cheesecake Factory, officials from the Economic Development Corp. of Fresno County explained that choosing to "buy local" helps the region's economy.

For anyone confused by this display, the campaign and its media partners, including Comcast and the McClatchy Co.-owned Fresno Bee, followed the press conference with more than $250,000 worth of radio, TV and print ads that spelled it out:

"Just so you know, buying local means any store in your community: mom-and-pop stores, national chains, big-box stores — you name it."

On the ground

In one way, all of this corporate local-washing is good news for local economy advocates: It represents the best empirical evidence yet that the grassroots movement for locally produced goods and independently owned businesses is having a measurable impact on the choices people make.

"Think of the millions of dollars these big companies spend on research and focus groups. They wouldn't be doing this on a hunch," observes Dan Cullen of the American Booksellers Association, a trade group which represents some 1,700 independent bookstores and last year launched IndieBound, an initiative that helps locally owned businesses communicate their independence and community roots.

Signs that consumer preferences are trending local abound. Locally grown food has soared in popularity. The U.S.is now home to 4,385 active farmers markets, one out of every three of which was started since 2000. Food co-ops and neighborhood greengrocers are on the rise. Driving is down, while data from several metropolitan regions show that houses located within walking distance of small neighborhood stores have held value better than those isolated in the suburbs where the nearest gallon of milk is a five-mile drive to Target.

A growing number of independent businesses are trumpeting their local ownership and community roots, and reporting a surge in customer traffic as a result. In April, even as Virgin Megastores prepared to shutter is last U.S. record store, independent music stores across the country were mobbed for the second annual Record Store Day. A celebration of local music retailers that features in-store concerts and exclusive releases, the event drew hundreds of thousands of music fans into stores, was one of the top search terms on Google, and triggered a 16-point upswing in album sales, according to Nielsen SoundScan.

In city after city, independent businesses are organizing and creating the beginnings of what could become a powerful counterweight to the big business lobbies that have long dominated public policy. Local business alliances — like Stay Local in New Orleans, the Metro Independent Business Alliance in Minneapolis-St. Paul, and Arizona Local First in Phoenix have now formed in over 130 cities and collectively count some 30,000 businesses as members.

Through grassroots "buy local" and "local first" campaigns, these alliances are calling on people to choose independent businesses and local products more often and making the case that doing so is critical to rebuilding middle-class prosperity, averting environmental collapse (see "Local buying: not the same as local shopping," on p. 18), and ensuring that our daily lives are not smothered by corporate uniformity.

Surveys and anecdotal reports from business owners suggest that these initiatives are, in fact, changing spending patterns. A survey of 1,100 independent retailers conducted in January by the Institute for Local Self-Reliance (where I work) found that, amid the worst economic downturn since the Depression, buy-local sentiment is giving local businesses an edge over their chain competitors.

While the Commerce Department reported that overall retail sales plunged almost 10 percent over the holidays, the survey found that independent retailers in cities with buy-local campaigns saw sales drop an average of just 3 percent from the previous year. Many respondents attributed this relative good fortune to the fact that more people are deliberately seeking out locally owned businesses.

In the high-rises

None of this has slipped the notice of corporate executives and the consumer research firms that advise them. Several of these firms have begun to track the localization trend. In its annual consumer survey, the New York-based branding firm BBMG found that the number of people reporting that it was "very important" to them whether a product was grown or produced locally jumped from 26 to 32 percent in the last year alone.

"It's not just a small cadre of consumers anymore," says founding partner Mitch Baranowski.

"Food is one of the biggest gateways, but we're seeing this idea of 'local' spread across other categories and sectors," says Michelle Barry, senior vice president of the Hartman Group.

A report published by Hartman last year noted, "There is a belief that you can only be local if you are a small and authentic brand. This isn't necessarily true; big brands can use the notion of local to their advantage as well."

Barry explains: "Big companies have to be much more creative in how they articulate local ... it's a different way of thinking about local that is not quite as literal."

One way corporations can be local, too, is to stock a token amount of locally grown produce, as Walmart has done in some of its supercenters. The chain's local food offerings are usually limited to a few of the main commodity crops of that particular state — peaches in Georgia or potatoes in Maine — and sit amid a sea of industrial food and other goods shipped from the far side of the planet.

Yet this modest gesture has won Walmart glowing coverage in numerous daily newspapers, few of which have asked the salient question: Does Walmart, which now captures more than one of every five dollars Americans spend on groceries, create more and better opportunities for local farmers than the grocers it replaces?

Walmart, like other chains, has learned that, with consumers increasingly motivated to support companies they perceive to be acting responsibly, tossing around the word "local" is a far less expensive way to convey civic virtue than the alternatives.

"'Local' is one of the lower-hanging fruits in terms of sustainability," explains Barry. "It's easier for companies to do than to improve how their employees are treated or adopt a specific sustainability practice around their carbon footprint, for example."

Rather than making direct claims using the word "local," some companies are pushing marketing messages that work by association. One example that caught Dan Cullen's eye was a CVS drug store television commercial that begins in a bookshop, following the owner around as she tends to her customers. The bookshop then transforms into a CVS. The bookshop owner is now the customer. The feel is still very much Main Street.

"Suddenly the kind of unique, enjoyable, grassroots bookstore experience morphs into a CVS experience," says Cullen. "There's a Potemkin façade that a lot of chains are trying to put up because consumers now want something other than a cookie-cutter experience."

Redefining 'local'

Still another corporate strategy is to redefine the term "local" to mean, not locally owned or locally produced, but just nearby.

"With the term 'local' being so nebulous, it seems ripe for manipulation," notes Mintel, another consumer research firm that counsels companies on how to "craft marketing messages that appeal to locally conscious consumers" and how to avoid "charges of 'local washing.'" The key, Mintel says, is for companies to decide what they mean by "local" and to disclose that clearly so as not to be accused of trying to misappropriate the term.

Corporate-oriented, buy-local campaigns that define "local" as the nearest Lowe's or Gap store are now being rolled out in cities nationwide. Some represent bids by shopping malls to survive the recession and fend off online competition. Others are the work of chambers of commerce trying to remain relevant. Still others are the half-baked plans of municipal officials casting about for some way to stop the steep drop in sales tax revenue.

Many of these AstroTurf campaigns are modeled directly on grassroots initiatives.

"They copy our language and tactics," says Michelle Long, executive director of Sustainable Connections, a seven-year-old coalition of 600 independent businesses in northwest Washington state that runs a very visible, and according to market research, very successful "local first" program. "I get calls from chambers and other groups who say, 'We want to do what you are doing.' It took me a while to realize that what they had in mind was not what we do. Once I realized, I started asking them, what do you mean by 'local'?"

Examples abound. In northern California,the Arcata Chamber of Commerce is producing "Shop Local" ads that look similar to the Humboldt County Independent Business Alliance's "Go Local" ads, except they feature both independents and chains. Spokane's Buy Local program, started by the local chamber, is open to any business in town, including big-box stores. Log-on to the Buy Local Web site created by the chamber in Chapel Hilland you will find Walmart among the listings.

When billboards proclaiming "Buy Local Orlando" first appeared in Orlando Fla., Julie Norris, a café owner who last year co-founded Ourlando, an initiative to support indie businesses, was excited to see the concept getting such visibility. But she soon realized the city-funded program, which provides businesses who join with a "Buy Local" decal, seminars at the Disney Entrepreneur Center and a listing on the Web site, was open to any business in Orlando.

"We sat down with the city and said, 'What you guys are doing is a real disservice to the local business movement,'" she says. When Norris complained publicly, city officials accused Ourlando of being "exclusive" by not allowing chains.

The city did agree to remove from its press materials and Web site a reference to a study that found that, for every $100 spent locally, $45 stays in the community. The problem was that the study, conducted by the firm Civic Economics, found that to be true only if the money was spent at a locally owned business. Shop at a chain store, the analysis found, and only $13 of that $100 spent stays in the community.

The Economic Development Corp. of Fresno County also appropriated the $45-stays-local statistic when it kicked off its Buy Local campaign at the Fashion Fair Mall. The figure was repeated on a TV news story without any clarification that it did not apply to the types of chains visible in the background.

Like the Orlando initiative, the Fresno campaign aims to boost sales tax revenue by deterring online and out-of-town shopping. It goes out of its way in every radio and TV spot to make sure people know that "local" means national chains and big-box stores. "Buy Local" stickers and posters are now visible on malls and chains throughout the Central Valley..

"For someone to say you are not local if you are a big box, I say baloney," explains Steve Geil, CEO of the Fresno EDC. "They invested here."

"I would prefer that the county's resources were not being spent promoting Walmart and Home Depot," says Scott Miller, owner of Gazebo Gardens, a Fresno plant nursery founded in 1922. "We have a great history of being involved in community events and donating to local causes. Our plants are grown locally. We believe that our kind of business is more valuable to a community than any big chain."

When the city of Santa Fe decided to launch a campaign to encourage people to shop locally, the Santa Fe Alliance, a coalition of more than 500 locally owned businesses that has been running a buy-local initiative for several years, signed on. At the kickoff in March, the Alliance's director, Vicki Pozzebon, emphasized the economic impact of shopping at a locally owned business versus a chain.

"After that, the city asked me not to push the $45 vs. $13, but just say 'local,'" says Pozzebon.

The city's message, according to Kate Noble, a city staffer who runs the program, is that shopping at Walmart is fine, as long as it's not walmart.com.

Says Pozzebon: "It has only diluted our message and confused people."

These sales tax-driven campaigns may well be doing more harm to local economies than good, according to Jeff Milchen, co-founder of the American Independent Business Alliance, a national organization that helps communities start and grow local business alliances (and on whose board I serve).

"If you encourage people to shop at a big-box store that takes sales away from an independent business, you're just funneling more dollars out of town," he says. "Because, unlike chains, local businesses buy lots of goods and services, like accounting and printing, from other local businesses."

The irony of trying to solve declining city revenue by trying to get people to shop at the local mall is that the mall itself may be the problem. While many California cities are facing budget cuts and even bankruptcy, Berkeley has managed to post a small increase in revenue. Part of the reason, according to city officials, is that Berkeley has more or less said no to shopping malls and big chain stores and is instead a city of locally owned businesses that primarily serve local residents. That creates a much more stable revenue base. Berkeley hasn't benefited from the temporary boom that a new regional mall might create, but neither has it gone bust.

Who will win?

Can corporations succeed in co-opting "local" — or at least succeed in so muddling the term that it no longer has meaning?

The Hartman Group's Barry thinks that's possible.

"For many consumers, these things are not being called into question much," Barry says. "They say, 'Hey, it's my local Walmart or my local Frito-Lay truck.' It depends where you are on the continuum and how you define 'local,' which is a term that is really up for grabs."

Milchen is less concerned about what he calls faux-local campaigns in cities where there is already a strong local business organization.

"It's more of an educational opportunity than a problem, so long as they respond to it," he says.

But in places where local enterprises are not organized, he fears these corporate campaigns may succeed in permanently defining "local" for their own benefit. Michelle Long shares that concern: "People are going to do diluted versions and hold the space so that real campaigns don't get started."

Local washing has prompted local business advocates to reconsider their language. Many are now using the word "independent" more than "local." Controlling language is critical, says Ronnie Cummins, director of the Organic Consumers Association, who is pushing for tighter regulation of the word "organic," as well as rules governing terms like natural, sustainable and local.

"We've been fighting so long without the help of federal regulators," Cummins says, "that some people have forgotten that tool."

But perhaps local washing will ultimately make corporations even more suspect and further the case for shifting our economy more in the direction of small-scale, local and independent.

"I think the fact that the chains are trying to play the local card, in a way makes it easier for us," says Cullen. "I think people are going to recognize that these aren't authentic, and that's going to make the real thing all the more powerful."

— newsroom@csindy.com

Editor's note: Stacy Mitchell is a senior researcher with the Institute for Local Self-Reliance and author of Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for Independent Businesses (Beacon, 2006). She also serves on the board of the American Independent Business Alliance.

So Mitchell is an unabashed supporter of small business and a critic of large corporations. The Independent is printing the essay she made available to many altweeklies because we feel it employs quality research to spotlight an important issue. We would welcome reader feedback on her argument via letters to the editor (letters@csindy.com) or comments at csindy.com.

Local buying: different from local shopping 

by Billie Stanton

In a story about "local" business, you should hear it from your neighbors: Shopping at the nearby outlet of a national chain isn't equivalent to local buying.

"The big chains have always tried to look like what they perceive the customer wants," says Mike Callicrate, owner of local meat purveyor Ranch Foods Direct. "From 'natural' to 'organic' to 'local,' they have co-opted the brand and the image. They are testing the intelligence of the consumer and stretching the truth to new limits in saying they are 'local' or that what they sell is local."

Says Michele Mukatis of the local Cultivate Health: "In a sense you're buying local, but as for where all [the money] ends up, it's China."

By contrast, Mukatis says, when we feed ourselves from local family farms, we protect our local heritage, preserve farming and keep land in agriculture, safe from development.

Richard Skorman, founder of the Colorado Springs Conservation Corps, has carved out a living through local businesses, from the long-time Poor Richard's bookstore and restaurant to his newer Little Richard's toy store and Rico's café. As an independent local businessman who has enjoyed his community's support, Skorman returns the favor by relying on goods from the same kind of merchants.

"That person lives here; they're liable to use other local independent businesses for printing, advertising," he notes. "They're more likely to be locally connected.

"Obviously, the closer to home you get something, the less it harms the environment. That's an important issue. ... You know the food's been grown locally and hasn't been trucked very far."

Also practicing what she preaches is Jane Ard-Smith, chairwoman of the Sierra Club's Pikes Peak Group. She and her husband participated in a program last year in which they promised to buy locally and eat at least one meal a day of solely local foods.

"A thing we really enjoyed was canning a lot of fresh local produce — tomatoes, pickles — and we made applesauce," she says. "So we really knew what was in our food. Just from a community standpoint, it was great."

Ard-Smith admits it's "a bit of a time commitment." And some products, such as olive oil and coffee, aren't produced locally. But she did find fair-trade, shade-grown, organic beans roasted by solar power at Solar Roast Coffee in Pueblo

.

Ard-Smith urges people to read Barbara Kingsolver's Animal, Vegetable, Miracle,recounting the author's experience of feeding her family entirely from items grown on or near their Virginia farm.

Trying something similar here wouldn't be as difficult in Colorado Springs as in some areas of the country, thanks to our proximity to Arkansas River Valley crops, Fountain Creek and productive short-grass prairie. And because property is less expensive here, plenty of independent local businesses have sprung up and succeeded — compared with places such as Boulder, where Skorman says higher property values result in more national chain stores.

For those converting to a "buy local" lifestyle, Mukatis advises at least three months of practice to make the new habit routine.

"I'm a big fan of little steps," she says. "Try one thing. Go to the farmers market once a week and buy your veggies there, then buy the rest of the stuff at the supermarket. Every choice has a consequence."

Callicrate says the best way to assess whether something is local is to ask: Who benefits in the sale and purchase, and where does the money go? Do you know the person who produced the item, or can you know them?

And, how far did the food travel?

"This makes a difference in the nutritional value and in the amount of energy consumed in transport," he says. "If a local farmer or rancher produced the food, then our money will stay in the community. If the food store is locally owned and operated, the wages and profits also remain in the community."

Food Inc.: a good film, that’s good for you

The feature-length documentary Food Inc. is scheduled to open at Kimball’s Twin Peak Theater on July 31. Local market Ranch Foods Direct is helping to promote the film, and owner Mike Callicrate supported the filmmakers in its production.

Reviewers have deemed it “a civilized horror movie for the socially conscious” and one that “nourishes your knowledge of how the world works.” Others have called it “required viewing,” describing it as the most important film ever made about American food production.

Callicrate, who saw an early screening in Denver, calls it “a gift to humanity.”

“It is extremely revealing,” he says. “It shows how a few corporations control the food supply. It shows just how unjust the food system is. It exposes how trade policy and government subsidies have driven people off of the land in Mexico, creating a flood of desperate economic refugees.”

Callicrate and other local food advocates see a silver lining, despite the fact that Colorado Springs — like towns all across America — has become dominated by fast food and national chains. “Healthier, local food alternatives exist now in our community,” he points out. Supporting local farms, stores and restaurants is a way for shoppers to vote for a healthier, more sustainable community with their pocketbook.

“A better farming and food system is possible,” Callicrate says. “We can choose to buy from farmers and ranchers in our communities and regions. We can choose to eat better and regain our health. I believe Food Inc. will awaken and motivate us like never before. What we feed grows, what we support prospers. Your fork is a powerful thing!”

A 300-plus page participant guide in soft-cover book form, available from Barnes and Noble, Amazon, and other bookstores, includes an essay by award-winning documentary filmmaker Rob Kenner describing why and how the film was made. While the project started out with plans to represent “the multiple voices and points of view of the people who bring food to our tables,” it turned out being about “unchecked corporate power,”

Kenner writes. Despite his reputation for making appealing films about social issues through the prism of personal experience, he got a cool reception from many of the farmers and food industry people he’d hoped to interview, changing the nature of the story he started out to tell.

“Before I began the research process, I was probably a lot like the average person who will watch Food, Inc.,” Kenner writes. “And I hope that means that the facts I learned about our food system — some of them amazing, some disturbing, and many simply fascinating — will interest moviegoers as much as they interested me.”

He collaborated closely with Fast Food Nation author Eric Schlosser, who is no stranger to Colorado Springs. In fact, the two made a joint visit a couple of years ago when Ranch Foods Direct hosted a book-signing and talk by Schlosser. Much of the Fast Food Nation book was based in Colorado and parts of the fictionalized film version were shot locally. Callicrate consulted with Schlosser on both.

“There are a lot of things concerned citizens can do — and are already doing — in our community,” Callicrate says. “For example, the Peak to Plains Alliance was formed to provide a directory of local food providers and create opportunities to learn about the rich agricultural history of this area. Venetucci Farm is the last remaining working farm within the parameters of our city and a great treasure. Community gardens are sprouting up all over town, thanks to the Pikes Peak Urban Gardens Program. More people are now demanding to know where their food comes from. Local public and private schools and colleges are pushing initiatives to serve more locally grown food. All of these efforts are a reason to celebrate. But a movie like Food Inc. is a critical part of the public education process.”

After officially opening in June, Food Inc. has been shown in metropolitan areas around the country to rave reviews.

Kenner has been featured on National Public Radio, Good Morning America, The Daily Show with Jon Stewart, and many others. Articles about the film have appeared in magazines and newspapers from coast to coast.

“We are very fortunate to have this opportunity available to moviegoers right here in Colorado Springs, and it couldn’t be more timely, as our legislators in Washington work on how to stem food contamination outbreaks, improve inspection, regulate imports and make our food safer and healthier,” Callicrate says. “It is time to take back our food system from corporate interests and begin rebuilding local food networks that are safe, just, humane and mutually beneficial to the farmers who produce the food and the people who eat it. This movie explains why it is time for a local food revolution.”

Mike Callicrate can be reached at 473-2306 or

mike@nobull.net