Produce leaders have more than a mouthful to say about increased food safety efforts, distributing the associated costs across the supply chain, and creating a national level playing field for food safety standards.
Increased food safety procedures continue to rattle companies' bottom lines like a Richter scale-sized earthquake across the produce industry's production and distribution channels.
Food safety efforts are intended to ward off another food safety breach similar to the E. coli outbreak linked to California-grown spinach in fall 2006. Estimates place financial damage in the hundreds of millions of dollars, while also severely bruising consumers' confidence in the safety of their food.
“One of the things that came out of the food safety crisis is that somebody needs to guarantee food safety and that nothing will happen (in the future),” said A.G. Kawamura, secretary of the California Department of Food and Agriculture (CDFA).
Government can guarantee that inspection and audit processes are in place and followed whether legislatively or through an industry-created marketing order or agreement, Kawamura said. “The government is not in a position to guarantee safety, but can guarantee process.”
Kawamura moderated a food safety panel discussion during the 82nd annual meeting of the Western Growers Association in November in Maui, Hawaii.
Speakers at the conference included: Andrew Cuming, president/owner, Metz Fresh LLC, Kings City, Calif.; Robby Barkley, president/CEO, Barkley Ag Enterprises, LLP, Yuma, Ariz.; Alan Siger, president/CEO, Consumers Produce, Pittsburgh, Penn.; and Don Harris, formerly with the Wild Oats and Safeway grocery store chains.
“Over the last year, the California leafy greens marketing agreement (LGMA) has been the driving force in our focus,” said Cuming of Metz Fresh, a signatory company to the LGMA. “We have put into play an enhanced (food safety) program.”
Following the E. coli outbreak, the Western Growers Association launched the LGMA with the support of other produce-related companies to enhance food safety procedures to minimize future food safety breakdowns.
The program is voluntary for signatory shipper enrollment, but once signed mandatory adherence to purchase produce grown according to a 40-page list of best management practices (metrics) is required.
Sticker shock has emerged from increased food safety achievements. At Metz Fresh, ratcheting up food safety over the last year increased production costs from $210 to $260 per crop acre.
“In growing and food safety, we've seen a 4 percent to 5 percent increase in costs and that's in addition to an 11 percent increase in production costs (all inputs) over the last two years,” Cuming said. “We've seen an increase in sales prices of about 2 percent.”
Metz Fresh, a grower-shipper of fresh, frozen, and prepared spinach and spring mix, is one of the largest spinach growers in the world. While the company utilized outside food safety consultants prior to the E. coli outbreak, the grower-shipper later added two, full-time food safety employees.
Under the LGMA, about 35 percent of Metz's production land base required corrective action to procure LGMA compliance. About 5 percent of the company's land base is no longer viable for production.
“In addition to the LGMA inspections, we've had 11 separate buyer audits,” Cuming said. “In the last year, we've changed from testing primarily on raw product for pesticide residues to a full test program on raw and finished products. The tests were mandated by our buyers.”
Metz Fresh has nine grower members in California's Salinas Valley.
At Barkley Ag Enterprises, Barkley is a third generation farmer. The company grows lettuce, broccoli, melons, and wheat for eight shippers with no direct contract with retailers or marketing.
“What has occurred in the last year or two with the advent of food safety problems is a top-down mandate. The consumer, retailer, processor, and shipper are demanding food safety. It all flows down to the grower,” Barkley said.
The industry has struggled establishing a baseline standard for food safety based on sound science. At Barkley, every shipper conducts audits and then brings in the shipper's customers — chain stores or food service buyers — for their own audits.
“Invariably, what auditor number one says, then auditor number two adds to that, and so forth,” Barkley said.
His food safety staff includes a microbiologist who works to accomplish individual shipper requirements. But are all auditor requests based on science? Barkley questioned whether it's correct for an auditor to require trees near a field to be removed since trees attract birds that fly over fields. Bird droppings during flyovers could contaminate fields.
“It's obvious that our farms are out in the open and not environmentally controlled,” Barkley said. “We don't have a thermostat or the protection inside a factory of four walls and a ceiling. Our farm is spread out 40 to 60 miles.”
Some demands are absolutely not based on solid standards, which makes production extremely difficult and costly, Barkley said. Just when production costs appear under control, something new comes along.
“Growing production costs in the last 25 years have more than tripled on iceberg lettuce alone,” Barkley said. “With the advent of food safety demands, these costs have gone up 4 percent to 5 percent. That's very, very significant.”
He called the costs mandated, not discretionary, and demanded by the consumer. “The consumer is the ultimate payer of all of this.”
In Pittsburgh, Consumers Produce sells product to two customers — retailers and food service distributors, and to suppliers. Siger said the production side of agriculture is not the only segment hit hard by increased food safety costs.
“Over the last decade, Consumers Produce spent over $10 million on a facility to ensure that produce is maintained at the proper temperature. New trucks, air purification systems — every year there is something new.”
A food service distributor asked Consumers about five years ago to enact food safety changes. Consumers complied at a cost of approximately $100,000. Consumers became certified as a licensed re-packer for the distributor, but with no guaranteed future business.
“It actually raised our level for all our customers. It allowed us to sell to three of their customers but also to other customers who maybe aren't as progressive as we are,” Siger said.
Despite increased costs, many in the produce industry concur that food safety is a bedrock requirement to gain and maintain consumer confidence. The panel of speakers said a national level playing field is essential — where everyone in the supply chain follows the same food safety rules.
Universal food safety production standards are needed across domestic, imported, and locally grown produce, retailer Don Harris said. Conventional agriculture needs to follow the lead learned by organic growers.
“Organic was growing in small increments with a small base. Until they had a national program where everybody was on the same footing, it didn't take off in its growth,” Harris said. “A big problem at Wild Oats was the use of local (grown products). They had to be certified organic and that was the bottom line. That gave us a level platform.”
A consensus on national standards must have the support of the U.S. Department of Agriculture and the Food and Drug Administration, Harris said.
“To have everybody throwing standards out there, it's incredibly costly and confusing to the consumer should another food safety problem occur. We need that even playing field,” he said.
Siger also endorsed a consistent national policy with the same rules for everyone. Frustration occurs when some businesses follow the rules and others don't.
“Here comes summer time and Joe the pig farmer brings tomatoes into the store. Since they're local, they are exempt from the food safety issue,” Siger said. “Food safety is not a local issue or a regional issue — it's a global issue … If someone is selling perishable agricultural commodities to someone else for resale, they should be on the same playing field no matter if they are a mega million dollar corporation or a small local farm.”
A level playing field allows consumers to buy with equal confidence whether the produce is grown in California, Arizona, or Maine, Siger said.
The LGMA is a good model to start with and Western Growers has shown it's a model to take nationally, Metz's Cuming said. The agreement has gone through one round of BMP changes.
The California LGMA and the similar Arizona LGMA enacted in fall 2007 have the best opportunity to become the standard for a national model, said the CDFA's Kawamura, a grower in Orange County, Calif.
“The preferred tool that's most responsive can be and should be this kind of marketing agreement. You can respond in new time to the tremendous advances in safety and the new technologies that come into play. Other ways of dealing with food safety can be very cumbersome and downright repressive.”
A kill step or irradiation surfaced during the lively discussion as a process to kill any and all potential food-borne illnesses. As long as the fresh produce industry lacks a kill step, another outbreak will occur, Siger said.
“It's not a question of if — it's a matter of when. No matter how much you tell people that the odds are a zillion to one, someone will get sick. The chance of getting struck by lightning is greater than you getting sick from eating, but the chance is not zero.”
Kawamura said some foods lend themselves to a sterilization process and some don't. If sterilization works for one product, consumers wonder why the process isn't used on others.
The amount of radiation required for a guaranteed kill without destroying leafy greens has not been shown, Cuming said. That's why the FDA has not brought the process forward as a viable item for the fresh produce industry.
Siger said high costs make irradiation prohibitive. Since the produce industry is located across the country, (irradiation) units would be needed everywhere. Then there's the sensitive issue of consumer fright over the term ‘radiation.’
The agricultural leaders concurred that food safety costs should be passed on to the consumer. Consumers ultimately will pay for food safety since they are the beneficiaries, Harris said.
Barkley quipped with this illustration — “Hasn't there been a surcharge placed on an airline ticket for Homeland Security? Could there be a surcharge placed on perishable commodities for food safety?”