Currently browsing posts about: Food-trade

I am deluged with emails urging me to say something about the trade dispute between Mexico and the United States over genetically modified (GMO) corn.

Let me confess immediately to a particular difficulty understanding international food trade.  I find the abbreviations (NAFTA, USMCA) and odd terminology (Sanitary, Phytosanitary) off-putting and confusing.

With that confessed, here is my understanding of what this trade dispute is about.

Under the terms of USMCA (the U.S. Mexico Canada Free Trade Agreement), passed in 2020, the three countries must accept each others’ products without tariffs or other unnecessary barriers.

Unnecessary is subject to interpretation.

In February 2023, Mexico published a presidential decree prohibiting the use of GMO corn in Mexico’s dough and tortilla production.  It also announced its intention to phase out the glyphosate herbicide.

These decrees affect imports of corn from the US, which is mostly GMO.

The US says the USMCA does not allow Mexico to ban GMO corn because doing so has no scientific justification.

In response, Mexico issued a 189-page report reviewing and detailing the scientific basis for the ban.

A trade tribunal has been set up to adjudicate this dispute., with the decision expected later this year.

Almost everyone I’ve heard from views Mexico’s analysis as highly convincing.

• Tim Wise of the Institute for Agricultural and Trade Policy argues that Mexico’s scientific defense is strong.
• Carey Gillem sees Mexico’s report as a firm rebuttal to the US position: Mexico smacks US over GM corn and glyphosate; she also writes: “We are defending your products:’ Emails reveal coordination between US government, industry in foreign trade disputes
• The Center for Food Safety has produced its own analysis of the positions: U.S. Tries to Force Potentially Hazardous GM Corn on Mexico
• The Canadian Biotechnology Action Network supports Mexico’s position.
• Friends of the Earth submitted supporting analysis and documentation.

The biotechnology industry, unsurprisingly, supports the US position:

• Biotechnology Innovation Organization: BIO Reiterates Lack of Basis for Mexico’s Ban on Genetically Modified Corn

This dispute raises serious issues of national food sovereignty—who gets to decide how a country’s food system works.

• Mexico wants to protect the genetic integrity of its native corn landraces.
• Mexico also wants to protect its population against what it sees as hazards of GMO corn and the glyphosate herbicide used with it.
• The US wants to use this trade agreement to force Mexico to accept its GMO corn.

It will be interesting to see how this plays out.  Stay tuned.

I’m always interested in the USDA’s charts displaying food and agriculture statistics.  They help to clarify complicated issues.

Agricultural trade is particularly opaque, but here it is at a glance.

First, what the US exports:

Next, what we import:

What so bizarre here is that the categories are the same; we export and import the same kinds of products.

The biggest difference is in horticultural products, which the USDA defines as “plants that are used by people for food, for medicinal purposes, and for aesthetic gratification.”

Horticulture includes “specialty crops,” the USDA’s name for the plant foods humans eat (as opposed to feed for animals)—fruits, vegetables , nuts, and seeds.  To further confuse the matter, the USDA also lumps medicinal herbs, flowers, and Christmas trees in this category.

Never mind.  The bottom line is we import most of our fruits and vegetables.  This is because the US agricultural system focuses on feed for animals and fuel for automobiles.

Overall, here’s what all this does to the balance of trade:

We used to export more food than we imported.  Now, we don’t.

Shouldn’t our food system mainly focus on producing food for people?

Obviously, yes.

While producers of sugar cane celebrated National Real Sugar Day on October 14, the New York City Council voted to require chain restaurants to post warning labels on sodas and other menu items that exceed to-be-defined limits on added sugars.

Mayor Eric Adams signed the Sweet Truth Act, which gives the city until 2024 to set standards and design the icon, and gives chain restaurants until 2025 to comply.

Meals at fast food and fast casual restaurants can be exceedingly high in added sugars, amounts that far exceed the FDA’s daily recommendation for consumption of 50 grams per day. Even most “small” fountain sodas sold at leading fast food chains contain more than a day’s worth of added sugars. Added sugars have been linked to weight gain in children and adults. Sugary drinks may also contribute to type 2 diabetes and heart disease.

In a video, New York City Health Commissioner, Dr. Ashwin Vasan, explains why sugar redction is a good idea.

Where is the FDA in all this?  It held a public meeting on the need for sugar reduction.  What it will do as a result remains to be seen, but the New York City action is surely a nudge.

In the meantime, the Government Accountability Office has some things to say about the U.S. Sugar Program.  It sums up the issues concisely.

The Department of Agriculture administers the U.S. sugar program to support domestic sugar production through tools such as limiting the supply of sugar.

The program creates higher sugar prices, which cost consumers more than producers benefit, at an annual cost to the economy of around $1 billion per year.

The program also restricts the amount of sugar entering the U.S. at a low tariff. The tariff restrictions are applied using a method based on 40-year-old data that doesn’t reflect current market conditions. This has led to fewer sugar imports than expected.

We recommended that USDA evaluate its method for restricting imports.

Comment: Here is a situation in which policies for sugar production and import intersect with policies for sugar and health in peculiar ways.  The objective of import policies is to restrict them in order to keep prices higher as a means to protect domestic sugar producers.

Ordinarily, food policies are designed to keep prices low—but not in this case (chalk this up to effective lobbying by cane and beet sugar producers, and the power of lobbyists in sugar-producing states).

Also ordinarily, higher prices would reduce demand, but sugar prices are nowhere near high enough to influence demand, which is one reason why this system continues.

Current policies are estimated to cost the public as much as $3.5 billion a year; divided by 350 million Americans means that the policies cost you an extra $10 per year for the sugar you buy—nowhere near enough to affect consumption.

Disparate goals for sugar are yet another reason why a single food agency overseeing the entire food system would be useful for reconciling these kinds of problems.

I saw this is a tweet from @WesternGrowers, the trade association that represents “local and regional family farmers growing fresh produce in Arizona, California, Colorado and New Mexico…We grow the best medicine in the world.®”

High marks to the Western Growers Association for producing this ad.

• It has interesting facts.  I did not know all this.
• It does not have misleading health claims about superfoods.

My one quibble: the confusing denominator.  The percentages can’t be of all of the vegetables consumed in the US; they have to be the percentages of US grown vegetables.

Take garlic, for example.  According to the USDA, we imported $19 million worth of dried garlic in 2020, and $185 million worth of fresh or chilled garlic.  Much of imported garlic comes from China.

According to Rural Migration News, the US imports almost two-thirds of its fresh fruit and one-third of its fresh vegetables.

Even so, I like the ad.

This tweet makes me think it’s time to talk about supply chains.

Supply chains are a big problem right now, particularly for anything that has to be transported.

How come?  Pandemic-induced buying sprees, coupled with shortages of:

• Truck drivers.
• Shipping crates.
• Longshoremen.

Your local grocery store is out of items?  Join the crowd.

Around 18% of beverages, 15% of frozen foods, 16% of snacks, 15% of candy and 18% of bakery items were out of stock at stores during the week ending on October 3, according to the latest data from IRI, which tracks in-stock levels at leading US grocery chains, big box stores, pharmacies and wholesale clubs.

Before the pandemic, 7% to 10% of products were typically out of stock on shelves, according to IRI.

Nobody expects this situation to get better soon.

The UK newsletter, FoodManufacture, has done a special edition on supply chains (subscribe free at this link).

• Perfect storm hits the food and drink supply chain:  The food and drink supply chain has taken a beating over the past 18 months, with each new crisis piling on a new concern for business to worry about. But above all else, the main concern is how to get the supply chain moving again in spite of the recent heavy goods vehicle (HGV) driver shortage… Read  
• Food supply chain fragility: what can be done?  Events over the past 18 months have shown how fragile our global food system is. Fotis Fotiadis, chief executive officer and co-founder of Better Origin, discusses what can be done in this opinion piece… Read
• UK beef ban by China risks damaging future trade:  China’s latest ban of British beef imports over a case of bovine spongiform encephalopathy (BSE) could damage future trade with the country, according to the Agriculture and Horticulture Development Board (AHDB)… Read
• Fuel shortages create challenges for food and drink:  As queues over the weekend left forecourts empty, members of the food and drink industry weighed in on how the fuel crisis has affected them… Read
• EVCL Chill enters administration placing jobs at risk:  Chilled food logistics business EVCL Chill Ltd – including EVCL One, EVCL Two and EVCL Three – has entered into administration after struggling with challenges created by the heavy goods vehicle (HGV) driver shortage, placing more than 400 jobs at risk… Read
• PepsiCo completes £14m distribution centre investment:  PepsiCo has completed a £14m upgrade of its Southern Region Distribution Centre (SRDC) based in Leicester… Read

Addition

10/22: An article I missed from Forbes in August.

I’ve been collecting items about China’s food system as well as that country’s role in ours.

Podcast: The scientist whose hybrid rice helped feed billions: A historian reflects on the life of Chinese crop scientist Yuan Longping, and the possible influence of geothermal energy production on earthquake aftershocks.

BMI and obesity trends in China:  Limin Wang and colleagues use data from six representative surveys in China…The authors report that standardised mean BMI increased from 22·7 kg/m² (95% CI 22·5–22·9) in 2004 to 24·4 kg/m² (24·3–24·6) in 2018, and obesity prevalence from 3·1% (2·5–3·7) in 2014 to 8·1% (7·6–8·7)…in 2018, an estimated 85 million adults (95% CI 70 million–100 million; 48 million men [95% CI 39 million–57 million] and 37 million women [31 million–43 million]) aged 18–69 years in China were obese.

China says it will buy US farm products: Bloomberg News reported on Friday that, “China plans to accelerate purchases of American farm goods to comply with the phase one trade deal with the U.S. following talks in Hawaii this week.

Chinese holdings of US agricultural land:  According to USDA’s data on foreign ownership of US land, China owns about 192,000 agricultural acres, worth $1.9 billion.  This includes land used for farming, ranching and forestry,.

The House introduces legislation to prevent China from buying U.S. farmland: Texas representative Chip Roy has introduced the “Securing America’s Land from Foreign Interference Act” to “ensure that Texas’s land never comes under the control of the CCP [Chinese Communist Party] by prohibiting the purchase of U.S. public or private real estate by any members of the CCP.  [Comment: I’m guessing this won’t get very far, in part because China is an important trading partner].

Balance of trade with China:  U.S. exports of agricultural products to China totaled $14 billion in 2019, largely from soybeans ($8.0 billion); pork and pork products ($1.3 billion); cotton ($706 million); tree nuts ($606 million); and hides and skins ($412 million).  U.S. imports of agricultural products from China totaled $3.6 billion in 2019, mainly from processed fruit and vegetables ($787 million); snack foods ($172 million); spices ($170 million); fresh vegetables ($136 million); and tea, including herbal tea ($131 million).  [Comment: we were way ahead on the balance in 2019].

China Focus: Yeyo’s Tmall launch, Chinese dietary spending trends, local cultivated meat developments and more feature in our round-up:  China’s first coconut yoghurt brand Yeyo’s Tmall launch, Chinese dietary spending trends, local cultivated meat developments and more feature in this edition of China Focus…. Read more

‘Follow, not lead’: China likely to be world’s largest cultivated meat consumer – but long, challenging journey ahead: China looks likely to be the world’s largest consumer market of cultivated meat due its population size and government support, but a long, arduous journey lies ahead before this becomes a reality, according to an industry expert…. Read more

Deliciou-s bite: Shark Tank alumni sets sights on China with first shelf-stable plant-based meats after cross-country supermarket success:  Australia-based Deliciou has its eye on China and other Asian markets with its market-first shelf-stable plant-based meat products after successful launches in both Australia’s Coles and Woolworths and US’ Whole Foods supermarkets…. Read more

Comment: I visited Beijing in 2019 and was surprised by the emphasis on dairy foods (never part of traditional Asian diets) and snack foods, especially for children.  Weight gain is only to be expected.  Current political tensions must be understood in the context of trade relations.   Although we export more agricultural goods to China than we import, our overall trade balance is to import about $300 billion a year more in products made in China than we export.

I learned about this from a tweet.

I recognized the clip.  It was from an interview I did in January in Toronto: TVO’s The Agenda: Battling bias in nutrition research (slso on YouTube, and in transcript).  Nam was the terrific interviewer.

But do not miss Minhaj’s last Patriot Act episode of 2019, “How America is Causing Global Obesity.”  This is a brilliantly researched account of obesity politics, from food industry influence to trade policy.

I couldn’t have done better myself and dearly wish I had his production team (and his performance ability).

Food trade is a mess right now, but I keep trying to keep up with it.  Here are some recent items that caught my attention..

Trade deals dump U.S. junk foods in Central America.  The University of Buffalo sent out a press release about a study of the effects of the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) on dietary practices in that country.

Our analysis demonstrates that low-income consumers face increasing household food expenditures in a context of overall food price inflation, in addition to relatively higher price increases for healthy versus ultraprocessed foods. Neoliberal policies not only contribute to restructuring the availability and pricing of healthy food for low-income consumers, but they also exacerbate social inequality in the food system through corporate-controlled supply chains and farmer displacement.

Current tariff policies threaten nearly 1.5 million jobs and raise prices.   This is the conclusion of a 75-page report conducted by economic consulting firm BST Associates .

A new study commissioned by the Port of Los Angeles finds that U.S. tariffs put nearly 1.5 million American jobs and more than $185 billion in economic activity at risk nationwide – based solely on the impact of tariffs on cargo handled in the San Pedro Bay port complex….China is the primary target of the Trump administration’s tariff policy, and Chinese producers account for about half of the imports passing through San Pedro Bay. Chinese retaliatory tariffs affect China-bound American exports, and Chinese buyers account for nearly a third of the American products headed overseas out of LA and Long Beach…“With 25 percent fewer ship calls, 12 consecutive months of declining exports and now decreasing imports, we’re beginning to feel the far-reaching effects of the U.S.-China trade war…With the holiday season upon us, less cargo means fewer jobs for American workers.”

The USDA has released the second collection of payments compensating agriculture for losses due to the trade war with China.  This comes to more than $14 billion on this round.  This is on top of the previous $9 billion already paid.  All of this is way beyond what the Farm Bill authorizes in agricultural support.  Supporting Big Ag this way sets an expensive precedent.  And guess where the payments are going.  To “a bundle of states that are essential to his re-election chances,” according to the Los Angeles Times.

As for why those payments are needed:  USDA’s complicated-to-read economic report explains how farm debt is increasing and income decreasing.  As the Des Moines Register reports, Iowa’s farm debt reached $18.9 billion in the second quarter of 2019—the highest level in the nation.  USDA’s farm income and wealth statistics are here.

In the meantime, what’s happening to small farms?  They face extinction, according to Time Magazine.

A mess indeed.  Fixable?  Only with political will.  It’s hard to be optimistic at this point.