NFAPP's Newsletter November 1996

Featured Articles :

"In Search of... Quality", by Pamela Mischen and Timothy Richards
Topic: The Quality Issues of Vegetables

"Legislative Update.....Food Quality Protection Act of 1996", by Pamela Mischen
Topic: Food Quality Protection Act

"Market Watch.....Potatoes", by Pieter van Ispelen
Topic: NFAPP Forecast of Record Year Right on the Money

A November 15 article in the Wall Street Journal entitled "Some Spoiled Spuds Are Making a Hash of Maine Potatoes," calls to mind once again the never ending struggle to ensure a high "quality" product. However, quality can be an elusive goal, especially when there is no agreement over what constitutes high quality. For instance, the article states that Maine farmers insist that the product that they ship is actually of higher quality because their potatoes taste more "potato-y," while a Maine Potato Board report found that the potatoes were just plain "bad."

The Maine potato case is typical of a quality debate that has affected other produce items including apples and tomatoes-- consistency versus variety. The problem at the heart of the Maine potato case is the fact that there are approximately 80 varieties grown in the state. Western producers, such as Idaho, on the other hand tend to concentrate on one variety-- Russet Burbank. While the Maine varieties may have specific uses, i.e. fresh or frozen, the Russets are more versatile. With potato production moving West, consumers are faced with giving up "specialty" potatoes for versatility.

In the 1994 issue of The Packer's Fresh Trends, 75% of consumers indicated that they would buy more fruit if it were of higher quality and 68% would buy more vegetables. Research by the Food Marketing Institute found that fully 98% of shoppers cited "quality of produce" as the primary reason for selecting a supermarket.

What is meant when consumers say that they want higher quality? Is it freshness, more varieties, more consistency, better shelf life? The vegetable most often cited as the one consumers said that they would purchase if it were of higher quality was tomatoes. And the market has responded to that request for a higher quality tomato by providing vine-ripened varieties-- ones that taste closer to the farm. In the tomato case, higher quality implied a more ripe taste.

High quality is also an issue for export markets, especially in Japan. Quality in this context means more than size and appearance. Because Japanese consumers tend to use fruit for more than just snacks, they are more sensitive to variations in taste and texture than U.S. consumers. Although apple exporters expected Japan to quickly emerge as a major importer of their product, traditional U.S. varieties were found to be lacking in sweetness - a key component of the Japanese definition of quality. Beyond tailoring appearance and taste to each markets' unique needs, importers demand both consistency and continuity of supply - two things U.S. exporter are often unable to provide.

In meat and poultry industries, successful development of these export markets has come hand-in-hand with industrial production techniques that provide the greatest chance of achieving a consistent, and high, level of quality.

Does the push for consistency to facilitate marketing mean that there is no room left in the market for variety? Absolutely not. The success of roadside stands, farmers markets and pick-your-own farms show that consumers are willing to go out of their way for their own definition of a high quality product. Specialty produce, tropicals, and the increasing number of apple and even potato varieties (I can buy purple potatoes at my local health food coop), support The Packer's 1995 Fresh Trends findings that 24% of consumers purchased a new fruit item within the past 12 months, and 10% purchased a new vegetable item.

Currently, the Maine potato problem, however, goes beyond the consistency versus variety debate. At issue to the growers that signed a petition opposing the mandatory inspection imposed this season is an approach to farming. While marketing of specialty produce has proven to succeed for a number of items, it has worked because those grower/marketers have had one eye on the crop and another eye on the consumer. Another factor contributing to the success of these marketing efforts is size of the operation and access to the marketing channel. Size can be a function of a single grower or it can be achieved through collaboration with other operations. A third factor in the success of specialty marketing is consumer education. Consumers need to know that what is being presented at the supermarket is not off-color, off-size, or off-flavor, but a premium color, size, flavor, etc.

Although the product that the Maine potato farmer is growing may not be outdated in the market, the method of producing it may not withstand the test of time.

Carton, B. "Some Spoiled Spuds are Making a Hash of Maine Potatoes" Wall Street Journal, 11/15/96.
The Packer Fresh Trends: A Profile of the Fresh Produce Consumer, 1995.
The Packer Fresh Trends: A Profile of the Fresh Produce Consumer, 1994.

In the excitement of finally reaching a consensus on Delaney reform as well as a minor use crop protection bill, immediate implementation of the Food Quality Protection Act (FQPA) may have seemed to be a good idea. However, as EPA struggles with the resource needs of immediate implementation and the problem of inadequate data, a lag time before implementation is sounding to many like a better idea.

Signed into law on August 3, 1996, the FQPA reformed two major pieces of legislation-- the Federal Food, Drug and Cosmetic Act (FFDCA) and the Federal Insecticide, Fungicide and Rodenticide ACT (FIFRA). The FQPA amended FFDCA by establishing a uniform health-cased safety standard for pesticide residues in food by eliminating the "zero-tolerance" Delaney clause and replacing it with "reasonable certainty of no harm." The law also requires EPA to consider all non-occupational sources of exposure, including drinking water, and exposure to other pesticides with a common mechanism of toxicity when setting tolerances. FQPA also has incorporated language suggested by the National Academy of Sciences (NAS) to require an explicit determination that tolerances are safe for children while considering children's special sensitivity and exposure to pesticides. EPA must also take into account the cumulative and aggregate effects of exposure to pesticides and other substances with common mechanisms of toxicity; effects on the endocrine system; and dietary consumption patterns and variations in the sensitivities of major identifiable subpopulations.

A problem arises in that EPA is currently in the process of reregistering all pesticides first registered before November 1984 as a result of amendments to FIFRA in 1988. This reregistration process is now subject to the requirements of FQPA. Compounding the problem is a lack of data to meet many of these requirements, especially those relating to exposure. There is also some uncertainty concerning what data will be required for the cumulative data requirement.

The law also directs the agency to use "real life data" as much as it can. The feeling is that this provision will work to the benefit of the fruit and vegetable industry, however, it is difficult to find credible "real life data" consumption information for fruits and vegetables, for example.

Due to the number of uncertainties surrounding data requirements and actual outcomes of the reregistration process, it is difficult to estimate at this time the impact that this bill will have on the fruit and vegetable industry. In this climate of uncertainty, some comfort can be gained from the assurance that the intention of this bill was not to reduce the number of pesticides, but to ensure a safe food supply. This assurance included the recognition that there are benefits to pesticide use as well as costs, and these benefits are to be taken into consideration in the reregistration process. One of these benefits is the production of a relatively low-cost supply of fresh fruits and vegetables that can contribute to the health of the population. Therefore, the benefits of reducing the health risk associated with a particular pesticide would have to be balanced with the impact of a reduction in the supply or increased cost of the produce on which that chemical is applied.

After 1995's strong pricing season and a decrease in production from 1994, NFAPP projected a high volume year for 1996 which would force potato prices down. Evidence from the various fall potato producing regions show that this has become a reality. The fall potato industry might be facing another record production year caused by increased acreage and high yields. U.S. fall potato production is estimated at about 550 million hundredweight (cwt.), compared to 420 million cwt. in the previous record year 1994. While acreage has increased by about 3%, yields will average about 360 cwt. per acre, which is a 7 percent increase from last year and slightly above 1994 numbers. Idaho and Colorado report good quality and high volume crops, while the Pacific Northwest also expects increases in total production.

Figure 1 shows that the 1990's are record setting potato years. While 1990 potato production was on the same level as in 1985, since then the industry has seen five record setting years. If 1996 will reach the level of 450 million cwt., the fall potato industry will have seen their production increased by about 28% over 6 years.

With abundant supplies of potatoes this fall, the average fall grower price is expected to be significantly lower than last year's high prices. While last year's average price was about $6.40 per cwt., this season's grower price is not expected to be much higher than $4.20 per cwt. This might be an early forecast, but it shows the potato market is in a downward price swing in 1996. Price swings from year to year are no strangers to the potato market. As figure 2 shows, high price years are often followed by years in which prices are suppressed. This is in general caused by the tendency of potato growers to plant more potatoes after a positive year, and vice versa. However, retail prices might not record lower levels until the next calendar year, keeping this year's per capita consumption lower than the expected utilization next year. Per capita use of fresh potatoes in 1996 will probably come out around 49 pounds, compared to an expected 54 pounds per person in 1997.

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