Inside this Food Report
Gung Hay Fat Choy and Welcome to the Year of the Golden Rabbit!
On February 3rd the Chinese New Year will be upon us and many of us will be welcoming in the Year of the Golden Rabbit! For any one who follows Chinese astrology and fueg shui practices (as many of us at Noon International do) the year of the Rabbit will be a challenging one as global energy continues to be discordant, however it is a year when there is good opportunity for economic advances if we move quickly, act decisively and are willing to try new and different strategies!
January was a busy month for Noon International with visits to customers in Los Angeles and then off to the Fancy Food Show in San Francisco. While we found many "natural” items last year at the Fancy Food Show this year we found a theme of “healthy” using less calories and less sugar. Gone were many of the energy drinks and in were healthy relaxation drinks such as herbal water using mint, cloves and, lavender. We saw a big trend in wine as an ingredient in such things as chocolate and oil and noticed an uptake on manufactures here in the U.S doing more sourcing globally of their raw ingredients.
As we mentioned last month the passage of a new Food Safety Modernization Act has the potential to change the way in which food manufacturers, both foreign and domestic do business. Inside the Food Safety section of this month’s food report we have outlined some of the major changes that will affect the food industry within the next 18 months as identified in an American Frozen Foods Institute webinar on the subject.
As we enter into the Year of the Rabbit we would like to ask our readership to tell us about any food industry topics you would like to know more about. To do so simply reply to the email the report was delivered from.
Again, Gung Hay Fat Choy to all of our friends around the globe. May the Year of The Rabbit bring you many blessings. See you all soon at AFFI!
Lily and Betty
United States: Overall US corn production in 2010 (corn for processing and field corn) was the third largest in history according to a January report issued by the USDA. 2010 soybean and wheat production was only below the 2009 record by 1%.
In 2011 almond harvest in California is expected to be the largest ever recorded in the state.
Apple exports from Washington State have been booming since December. Smaller than usual crops in other competing states and countries has made this season a particularly lucrative one for Washington State apple growers. Currently there are over 60 million boxes of apples in storage in Washington State.
The bagrada beetle remains a problem in California and Arizona. Main crops that have been affected by the bug are broccoli, kale, cauliflower, and other cruciferous vegetables. Lettuce growers in Arizona and California are dealing with fungal disease due to a cool and wet growing season. If weather returns to normal desert winter temperatures disease problems would probably diminish.
Tomato and citrus psyllid was observed in tea leaves confiscated by customs from a man returning from Mexico into Arizona. This event has rekindled fears that the insect could make it into central Arizona.
Hikes in fresh vegetable prices have been observed in Florida during January due to freezes this winter. The effects of freezes on Florida oranges became apparent in a freeze damage report issued by the USDA. The report says that 12.6% of the late crop, 45.7% of the mid season crop, and 33.6% of the early season crop had apparent damage.
Mexico: Frozen broccoli processors in Mexico still face a tight supply situation as much of the broccoli contracted for processing is being taken by the United States fresh market. Weather and pest problems in US winter vegetable growing areas have put more pressure on the Mexican broccoli market for fresh product.
Guatemala: Production will continue to decrease until May and June when broccoli production stops completely.
Chile: Chile is poised to send over 80% of its 2010/2011 fresh blueberry crop to the US. Most of the remaining will go to Europe and Asia. Blueberry harvest is complete in the northern growing zones, nearly complete in the central growing zone, and just beginning in the southern zone. A rain and hail weather event in late December 2010 is expected to depress southern zone blueberry yields by approximately 10% which could raise pricing for any product diverted from the fresh to frozen markets.
Kiwi harvest in Chile will start at the end of February.
Peru: The asparagus raw material problem in Peru has reportedly become critical due to a poor growing season and water table problems. Canners and most IQF processors ceased operations in mid January. In normal years production does not cease until the end of January. Canners are well behind schedule and it is certain they cannot meet contractual obligations made to global customers.
Water table problems continue to exist in Peru’s Ica Valley. One source attributed this problem to an increase in demand in Britain for Peruvian asparagus. British demand has led to both increases in production from existing factories and new construction of asparagus production facilities.
New Zealand: Potato and tomato psyllids are increasing in number on both the south and north islands. Psyllid numbers are highest in Hawke’s Bay and South Auckland. Costs associated with psyllid control are estimated to run potato farmers in excess of $700 NZD per hectare.
Kiwi exports from New Zealand are expected to be down 10% from the previous year. Bad weather in the form of hail and rain contributed to the reduction. At this point it seems that the single biggest factor contributing to the predicted reduction in kiwi harvest volume is the PSA disease which has reportedly affected about 500 hectares of kiwi vine so far.
Australia: The retail price of many crops has risen significantly in Australia in the last month due to extensive flooding in the country. From a processing perspective potato and sweet potato harvests have been affected, though estimates to the extent of the damage are not currently available. In the domestic fresh market, beans, peas, melons, grapes, and tomatoes will inevitably see significant increases in price. Tropical fruit intended for the fresh market could be in short supply due to transportation disruptions caused by flooding.
Locusts continue to hatch in areas not affected by flooding. Australian Department of Agriculture, Fisheries, and Forestry, posted on their website, “The outlook is for a second generation of high density nymphs in the Riverina of New South Wales, Northwest and North Central Victoria and in the Murray Valley of South Australia during January.” These insects combined with flooding will reduce wheat harvest yields.
Thailand: Thai sources indicate that prices for pineapple raw material in Thailand are among the highest in the world. Pineapple prices have been most directly affected by small fruit size due to cool and rainy weather which caused major flooding in 2010/2011. During January, these floods have spread to the southern region of Thailand further intensifying the scramble for raw material for canned pineapple production.
Extensive flooding has also reduced Thai rice output by 20% according to the Thai Farmer’s Association. This will raise the price of rice in and from Thailand.
India: The Indian Cabinet met in mid January to discuss the soaring prices of onions caused by flooding. In a rare deal India imported 1000 tons of onions from neighboring Pakistan. There is also a ban in place restricting the export of lentils and cooking oil from the country.
China: Grain imports into China were significantly up from last year. Chinese government statistics confirmed that imports of corn, wheat, and rice all significantly increased from the previous year. The increase in grain imports is driven by feed grain imports in response to Chinese consumers’ increased demand for meat, especially pork. The US has been a major exporter of grain to China.
The demand for Chinese garlic remains high. Chinese authorities have cracked down on garlic speculation and there are even reports that China has made the export of garlic temporarily illegal. Garlic restrictions should fade in February as the Indian crop comes to harvest making up for shortages in China.
The Beijing Meteorological Bureau says there has been no significant precipitation since October 23rd, 2010 in Northern China. The drought is currently affecting 17% of the winter wheat growing area in China. Vegetable prices throughout China have also been affected as Shandong province reportedly exports over 50% of Chinese vegetables during the winter. The areas most heavily hit by the drought are Beijing, Henan, Shanxi, Hebei, Shandong, and Jiangsu.
In the southern provinces of Guangxi and Hunan heavy snow has been reported. While the extent of the damage to agriculture is not yet known, it is reported that miles of water pipes have burst leaving people without water and possibly affecting irrigation. Affected crops include greenhouse vegetables such as bok choy and broccoli as well as citrus crops. Most affected crops are for the fresh market.
AFFI Food Modernization Act Webinar Review
On January 11, 2011 The American Frozen Food Institute (AFFI) with the assistance of Hogan Lovell partners Joseph A. Levitt, Gary Jay Kushner, and associate Elizabeth Barr Fawell, put on a webinar intended to shed light on the new Food Safety Modernization Act recently signed into law. Specifically the AFFI webinar sought to tease out the parts of the 200 page law that would most immediately be important for food manufacturers and importers to consider and address if necessary. The webinar presenters identified four main elements of the new law that will directly affect the food industry. Those main elements are new responsibilities on food companies, new controls over imported food, new powers of the FDA, and new fees on food companies and importers. These main elements are detailed in below chart.
The timeline for implementation for the majority of the above mentioned main points of the Food Safety Modernization Act is 18 months. According to the AFFI webinar it is most important to first and foremost focus on developing scientifically based food safety plans, implement domestic and foreign supply chain management techniques, and prepare record maintenance and guidance access. The good news is that most manufacturers of food products already have these programs in place and most of the work for verifying Food Safety Modernization Act compliance will be reviewing already established procedures rather than implementing new ones.
The Incredible Adzuki Bean!
The adzuki bean is a small red kidney shaped bean and is the second most popular consumed bean in Japan after the soybean. First thought to have been domesticated in China around 1000 BC, the mildly sweet flavored adzuki bean is commonly used in confectionaries in Asia and can even be consumed as a powdered tea like drink. In October, 2009 Pepsi released an adzuki flavored Pepsi drink in Japan! According to traditional Chinese medicine adzuki beans have health benefits for the kidney, bladder, and reproductive system and are often prescribed as a treatment for bladder infections. Today, contemporary research is confirming what Chinese medicine has known for centuries, that adzuki beans are rich in nutrients and possibly could aid in disease prevention.
Adzuki beans have one of the lowest fat to highest protein ratios of any bean. In addition the beans contain high amounts of fiber, potassium, thiamin, niacin, zinc, and manganese. The health benefits of adzuki beans don’t just stop with its nutritional content. Numerous studies have linked adzuki bean consumption to lowering bad cholesterol, helping with detoxification of the kidneys, and could even prevent breast cancer due to the presence of phytoestrogen in the bean. One Japanese study from 2008 published in the Clinical and Experimental Pharmacology and Physiology journal found that hypertensive rats when fed an adzuki mixture saw significant decreases in blood pressure.
China is the leading producer of adzuki beans but there are a few United States farmers who grow the bean on a large scale. In the United States canned organic adzuki bean production in the Midwest has proven economically viable for supplying domestic consumers. There is significant room for growth in both the domestic consumption and export potential of the bean as Japan alone consumes 100,000 metric tons per year, of which 30 pct they import. According to the Agriculture Marketing Resource Center only 10% of adzuki imported into Japan comes from the United States so there is certainly room for growth. Growing domestic consumption of the adzuki bean could be accomplished by continuing to research and advertise the healthy qualities of the legume. As Americans become increasingly health conscious the adzuki bean could appeal as an inexpensive, tasty, and healthy food.
Would You Like Eel On Your Pizza?
In industrialized nations the consumption of prepared and frozen meals has significantly grown in the last 20 years. According to Euromonitor, the six countries driving the trend and accounting for 75% of total global retail value are the United States, Japan, Germany, United Kingdom, France and Russia. In the United States and Europe frozen pizza is the fastest growing prepared meal. While Japan has seen increases in consumption of frozen and prepared foods in the last decade, it has not seen the sharp increases in frozen pizza consumption as in Western industrialized nations.
Restaurants in Japan have experienced decreased sales during the global recession due to people seeking less expensively priced prepared and frozen meals at the grocery store, such as pizza. Contrary to the trend in the United States and Europe where frozen foods, especially frozen pizza, have dominated growth trends, the Japanese population has seen more significant prepared food growth in the chilled, not frozen, food sector. Chilled, not frozen, pizzas could be a way to corner a largely untapped market in Japan. In addition, unconventional toppings such as eel and octopus that have proven popular in Japanese pizzerias, could also increase sales if offered on chilled or frozen pizzas.
There is room for growth in frozen food consumption in nearly all emerging Asian markets with Japan being the most advanced economy in terms of frozen and chilled food infrastructure. There are a few obstacles to remember though when trying to market to the Japanese population. As a Japan Times article pointed in 1998, many Japanese simply do not enjoy the taste of cheese. Advertising pizza products according to perceived value like quality ingredients or unique flavors such as yakisoba frozen pizza, may go a long way in increasing frozen pizza consumption in Japan. To truly tap the revenue potential of the Japanese frozen pizza market much attention should be paid to incorporating the dietary trends that fuel the Japanese food industry.
Did you know...?
University of East Anglia and Harvard University researchers have identified compounds in blueberries that help with hypertension, which affects one in three US adults. The compounds, called anthocyanins, reduced the risk of hypertension in those who ate blueberries on a daily basis by ten percent!
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