Inside this Food Report

VOLUME 5
ISSUE 3


March 1, 2014

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Hello Everyone,

It was a busy AFFI convention in beautiful San Diego, CA February 22 through February 25th.   It is always good to connect with current suppliers and customers as well as have the opportunity to meet new business associates.    The AFFI is an important “information sharing” venue for us as we convey our buyer’s concerns and wishes to our suppliers and our suppliers concerns and wishes to our buyers.  It is important to know everyone’s challenges and their perspectives to be successful in our business partnerships.

Land values remain strong and grower contracts are now being negotiated.   We may see some relief on sweet corn this year with prices to the growers expected to be approximately 10% down.   There has not been much pressure to lower pea prices since the market remains strong and inventories are low.  

With green pea sowing underway in the Northwest in no time at all we will be out in the pea and corn fields but first we are headed to China and Japan.   Looking forward to seeing all of our customers and suppliers in Asia in the next few months.

Last but not least we finally had the chance to meet little Etienne Dole.   The proud mama and papa introduced Etienne, who is now almost 4 months old, to everyone in Noon’s Seattle office .  He sure was cute and very well behaved!   All the best to Steve and Renee! 

Wishing everyone a great month of March (we hope all of our friends in the Midwest and East get some relief from all that snow!)

Until next time,

Betty and the Noon International Team

CropVeggies
United States:    Green Pea and Potato plantings have begun in the Northwest.

Contracting with farmers is still underway for many crops.   It is expected that the raw material price for sweet corn will be down by about 10% this season compared to last.
 
 However the big news story still is the severe drought conditions in the state of California.   Much needed rain has come to California but many are saying it is too little too late.   Heavy rain forecasted for California will now cause increased risks for flooding and mudslides.  The rain will do little to make up the states deep precipitation deficit or prevent the water shortages, which California is facing.

A 435 million dollar industry, 90% of United States avocados are gown in California.   All of these avocado-growing regions have been declared a disaster area.  Lack of rain has allowed salt to build up in the soil and hinder the growth of the trees.  Farmers in California have to make choices on which of their crops to water.   The farmers are requesting the government to release more water but with so many federal and state agencies involved nothing is happening.   California supplies about half of the country’s food supply so prices will be high. Tomatoes and avocados are only a few of the crops, which will be in short supply this year.   However California’s drought conditions could be export opportunities for other countries.

Mexico:   Conditions in Mexico have improved dramatically.   After the prolonged rainy season and limited inventories crop conditions are now at their peak performance and industry inventories are being rebuilt.   Midday temperatures reaching 30 degrees C  with nighttime temperatures of 10 degrees C have kept the broccoli and cauliflower coming in strong.   Both volume and quality is very good.

Guatemala:   Broccoli season is winding down with limited quantity available from Guatemala.

Ecuador:    Weather conditions have been favorable.   Warm days and cool nights are resulting in good volumes of broccoli being harvested.   Most processors are working to catch up on pending orders as much of 2013 inventories were tight.   Less than favorable conditions in many other broccoli regions resulted in buyers putting pressure on Ecuador to fulfill their needs, however these regions are now back into peak production.   This coupled with continuing good harvest in Ecuador should allow processors in Ecuador to catch up.

Chile:   Blueberry harvest should be winding down soon.  The dry season in Chile affected yields on both blueberries and raspberries and prices and volumes will be tight.    Sweet corn season is underway .  Germination rate was down about 10% due to heat.   If heat continues processors are expecting lower yields this season.   Green Beans being processed as well.   There was about a 10% increase in acreage this season which should offset any reduction in yields.

Peru:  Mango harvest is underway.   Rains in February is resulting in a lower than average crop of mango . Avocado prices expected to be announced within the next week and prices will be strong, due to California’s drought condition, which will put pressure on the fresh market.  

Costa Rica:   Mango harvest will begin in the next week.   

New Zealand:   Pea season is complete and inventories tight.  Corn harvest underway.   Cooler than usual weather has slowed the growth a bit but yields and quality are expected to be good.

China: 

Zhejiang Province:  Early February brought very high temperatures to the region which lead to abnormal growth.      Broccoli and Cauliflower yields have suffered due to the higher temperatures and supplies are limited with quality down.

Shandong Province:   All harvest in this area is finished.   Some factories are processing broccoli and cauliflower with raw material from Zhejiang province.


China's Continued Steps to Improve Food Safety

China has been battered by a series of food-related scandals, from chemically contaminated baby food and nutritionally substandard oil to fraudulently presented ‘branded’ food. In the past few years, there have been numerous cases of avian flu in chickens, some strains being passed on to humans. This resulted in mass culling of chickens. A recent threat is the H10N8 avian flu virus, which is said to have jumped to humans and could spread from human to human. Authorities have declared that the infection has reached ‘pandemic’ levels.

Recent research has shown that over 42% of China’s rivers are so polluted that they are unsuitable for drinking or fishing purposes. In fact, it is said that most foreign visitors to China are advised not to drink tap water or eat local chicken.

China’s reputation with regard to food imports has also taken a beating, prompting Chinese officials to take the matter of food regulations up a notch.

To tackle such a bleak scene in food safety, the China Food and Drug Administration (CFDA) has vowed to tighten food regulations and set up new, stricter standards for maintaining quality. Already, 2000 national, 2900 industry and 1200 local standards related to the food industry have been formulated. After due processes, they are expected to be implemented in the coming year.

A major change expected in coming days is the amendment to China’s Food Safety Law. The draft of the amendment framed in October 2013 talks about stricter regulation of supply chains, and of manufacturing and operating units. It also has in place more severe penalties and punitive measures for those found guilty of manufacturing or selling substandard food items. China’s Supreme People’s Court has recently made lawsuits by private plaintiffs against defective foodstuffs easier to file and pursue. Applicable from March 2014, the Court’s injunctions, among other things, will place the burden of defense on the food company accused of injuring or causing sickness to the plaintiff. All these actions may have a cumulative effect of straightening out the messy state of food safety in China.  Chinese officials have pledged to improve management mechanisms of food safety, and to “establish a transparent and effective working model” for ensuring untainted, quality food.

Some Chinese food companies are also actively seeking a role in the global market by acquiring foreign brands. For example, Shuanghui Foods bought US-based Smithfield recently – both being major players in the pork business in their respective countries. The Australian brand Mundella was bought by China’s Bright Food Group. These mergers raise hopes of introducing newer, important quality control measures in these companies.

The next several months will be significant for China’s food safety authorities as they attempt to salvage the beleaguered food industry in China.



Lucious Lingonberries

The healthful properties of berries – blueberries, blackberries, raspberries, to name a few – are all well known. Berries are rich in compounds called polyphenols, which are powerful antioxidants. They are also great for your blood vessels and eyes; they help prevent aging and certain types of cancer.

A relatively unknown berry that is creating news these days is the lingonberry, native to Sweden and grown wild in the wooded areas of Scandinavia. The lingonberry (Latin name Vaccinium vitis-idaea), also called cowberry, mountain cranberry, red berry or partridgeberry, has been found to have significant anti-inflammatory and fat-busting properties.

A team of Swedish researchers recently found that lingonberries can fight the harmful effects of weight gain due to high-fat diets in mice. The scientists tested eight types of berries – including acai berries, cranberries, and blackcurrants – to see the effect they had on the harmful metabolic outcome of a diet that is high in fat. Lingonberries out shine all other berries in battling the bad metabolic effects of consuming a fatty diet. They are also rich sources of vitamin C.

Additionally, lingonberries have been found to have protective effects on the inner lining of blood vessels. This is especially good news for diabetics whose blood vessels are damaged by advanced glycosylated products (AGEs); lingonberries reduce the effect of AGEs, according to a Canadian research study.

In other animal studies, lingonberries increased red blood cell and liver enzymes – again important for antioxidant function. Certain extracts from lingonberries have also been found to fight an infection-causing bacteria Staphylococcus aureus. A group of Japanese researchers also found that lingonberry and bilberry extracts help protect eyes (retinas) from UVA-induced cell damage.

Lingonberries are small, red and tangy, somewhat similar to but juicer than cranberries. A very popular food in Scandinavian countries, they can be easily made into preserves, jams and juices and enjoyed all year round. Though not extensively available in the United States yet, (except if you visit the furniture store Ikea!) lingonberries are available at various online suppliers and specialty stores. They are mostly available frozen or as preserves.

Lingonberries can be grown in northern Canada, the northern US, Greenland, Scandinavia, northern Europe, Germany and also in the mountainous areas of central Europe and Asia. They were first commercially cultivated in the United States in Wisconsin in the 1990s.

With so many benefits, the lingonberry is poised to be the new go-to berry! Be prepared to hear more good news from this tiny red berry on the diabetes, cardiovascular, anti-inflammatory and fat burning fronts!  Meanwhile, smear a dollop of lingonberry jam on your buttered toast…



Big Macs In The Land Of Pho!

When the first McDonald’s restaurant in Vietnam was inaugurated by CEO Donald Thompson in Ho Chi Minh City, on Saturday, February 8, 2014, it became the 10,000th McDonald’s in the Asia-Pacific region. Worldwide, McDonald’s has over 35,000 outlets in 119 countries. Vietnam becomes the 38th country in Asia to have a McDonald’s fast food restaurant.

The restaurant chain joins a string of American food and beverage chains that have opened shop in Vietnam since 2010. World Bank statistics show that the average per capita income in Vietnam shot up from $402 in 2000 to $1896 in 2013. This has led to a burgeoning affluent middle class in the country with more disposable income than ever before. The approximately seven million-strong population of Ho Chi Minh City includes a whole generation of youngsters who are curious about western brands and foods. KFC, Burger King, Pizza Hut, Baskin Robbins, Dunkin’ Donuts, Carl’s Jr., Popeye’s, Subway, and more have already tasted success in Vietnam’s considerable consumer market.

On the morning of the opening, crowds thronged the restaurant, both indoors and at the drive through.  In a country where motorbikes outnumber cars, the drive through appropriately is for both!  While a few American expatriates were seen enjoying the ‘taste of home’ with their families, locals too looked excited and happy to be there, especially the younger crowd. McDonald’s has tried to imbibe local flavors in their menu, nevertheless, some customers felt that the food was not as “interesting” and lacked the “complex flavors of traditional Vietnamese cuisine”.   It was also noted that customer reviews stated the food was more expensive than local food shops.

It is important to remember that McDonald’s is being presented as a lifestyle preference for the middle class in Vietnam as opposed to being an inexpensive food choice for the poor. An average meal at the McDonald’s in Ho Chi Minh City is 40,000 Vietnamese Dong – 60,000 Vietnamese Dong ($1.90 - $2.84). Local food served at no-frills mom-and-pop eateries cost less.

The franchisee of the first McDonald’s in Vietnam is the US-educated Henry Nguyen, who also is the son-in-law of the Vietnamese Prime Minister, Nguyen Tan Dung. Henry Nguyen, who moved to the US as a child and even flipped burgers at a McDonald’s in Virginia, returned to Vietnam 12 years ago and owns a hospitality company called Good Day Hospitality. He asserts that the 350-seater brand new restaurant is just the beginning; he aims to expand to 100 restaurants in the coming 10 years.

While the future of McDonald’s in Vietnam remains to be seen, for now, the patrons seem to be thrilled and are pleased to be associated with something ‘modern’ and ‘Western’. Experts on the food industry say that McDonald’s in Vietnam has less to do with the taste of the food served but more with the ‘aspiration’ factor. It is expected that people aspiring to connect with things American and the world will enjoy spending time at Ronald McDonald’s restaurant.  However Ronald may have to rethink the fries on the menu, as most patrons on opening day left piles of fries untouched on their plates!

 


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