The Blog:

Central China’s Water Woes 5/18/2011

China Drought newsThe United States is not the only country with water issues. A harsh drought in Central China along the Yangtze River region has left maybe people and fields thirsty.  The Hubei Province currently has almost 1,400 reservoirs that are temporarily unusable from the low supply of water available. Certain areas along the river are coming close to record lows.  A five month drought in China doesn’t only affect the land. Droughts have a negative domino effect not only on the people, but on trade routes, livestock and crops. In today’s global marketplace, it is likely that world prices for commodities could rise as shipping becomes more time consuming and agriculture production is hindered.

Conditions have gotten so bad, that the Three Gorges Dam was called up to make its second emergency discharge in order to ease the drought. The Three Gorges Dam is the single largest hydroelectric project in the world and released 400 million cubic meters of water during early May. This large discharge is meant to help ease shipments traveling along the Yangstze and ease concerns for the people of the nearby cities.

Reports have shown that last week, more than 300,000 people and 90,000 livestock in Hubei were short on drinking water. Farmland was not spared either, with more than 2 million acres that have been affected by this season’s droughts. The drought has also affected nearly the nearby province of Hunan has at least 300,000.

Hopefully some much need rain will show up in the upcoming weeks.

As of Saturday, the drought had left 315,000 people and 97,300 livestock in the Hubei short of drinking water, and more than two million acres of farmland had been affected, Xinhua reported. In neighboring Henan Province, the drought had affected at least 320,000 people.

hubei map

New Source

Tags: , , , , , , , .
No Comments. Join the Discussion.

China is Nuts for American Pecans 4/18/2011

China Agriculture- Pecan DemandThe word is out. Chinese consumers have gotten wind of the wonderfully tasting and healthy nut, the pecan. After several segments on Beijing TV and other local TV stations on the health advantages of pecans, Chinese consumers have began to expand their nut repertoire.  And where can they find these fine nuts? America, that’s where. Approximately two-thirds of the world’s pecans are produced in the United States.

Demand for American pecans in China has been so strong, that prices have nearly doubled in the last three years. According to the USDA, the average price of shelled pecans in 2007 was around $1.00/pound and last year, in 2010, prices jumped to nearly $2.25/ pound.

This increase in demand has led to a large shift in American pecan exports. As you can see in the chart, in 2005, total exports were only 30% (China being only 1% of that.) And only four years later, China grew to nearly 30% of our exports, bumping up total exports to more than 50% of domestic production.

And demand is showing no sign of waning. Total production numbers, however, have not yet began to be affected due to the nature of the pecan tree. It takes ten years for a pecan tree to begin producing any sizable amount. And even then, the trees have alternating “on” and “off” years. So as more farmers start to up their acreage of pecan trees, we will have to be patient and shell out for our favorite holiday pies and fruit cakes.

Tags: , , , , , , , .
No Comments. Join the Discussion.

Food Importers and Manufacturers – New Regulations and Compliance Standards You Should Know About 4/8/2011

food importer regulationsIn January, the Food Safety Modernization Act was signed into law and the FDA is currently working its way through the implementation process. Perhaps the most groundbreaking part of this law is the requirement for food producers and manufacturers and processors to verify and certify their suppliers’ food safety processes.

Why start worrying about imported food and ingredients now? Over the last decade, more and more food has become available on America’s shelves and a good amount of it is imported; 15% of food to be exact. Certain foods have much higher percentages; such as 75% of seafood, 20% of vegetables and 50% of all fruits are imported. The FDA however, hasn’t had the bandwidth or the manpower to inspect more than 1 percent of all the imported food in most recent years.

What does this mean for food manufacturers and producers with international supply chains, from say, China? The new law places the responsibility on the business owners to verify and certify that their international suppliers are complying with the standards set by the FDA in the U.S. The goal of the FSMA is to ensure that imported food is just as safe as the food that is produced domestically and will require a great deal of cooperation and partnership from many different countries and agencies.

What is compliance and how do businesses become certified? At this point, the FDA is still creating the guidelines for how to become certified. However, food safety experts have suggested implementing a preventative, risk-based plan like HACCP. Although the FSMA rules will require actions beyond having a solid HACCP plan, it is said to be a great starting point for companies working towards future compliance.

Industry experts also suggest that as companies prepare for compliance, they should undergo a “gap analysis” to locate weaknesses and shortcomings in their food safety plans. With the results from the gap analysis, companies will then be able to address the issues before an FDA inspection, which when paired with a HACCP plan can help expedite the process for compliance.

The FDA must accomplish the following tasks by the indicated dates: (taken from the FDA’s website)

– Preventive Controls for Facilities – June 2012

– Produce Safety Standards – January 2013

Inspection, Compliance & Response

– Rules and Process for Administrative Detention – May 2011

– Recall Authority (May be mandated only by the Commissioner of the FDA or the Secretary for Health and Human Services) – Currently Active

– Suspension of Registration Regulations – May 2011

Imports

– Foreign Supplier Verification Program Guidance – January 2012

– Accredited Third-Party Certification Program – January 2013

– Mandatory Certification for High Risk Foods – Currently Active (but the definition of “high risk foods” is still in development)

The latest update in FSMA:

As the first big accomplishment of the Food Safety Modernization Act,  the FDA has released a user-friendly food recall database. The database is an easier way to allow consumers to access up-to-date information regarding current and past food safety scares. The database provides information sorted by type, such as food, drugs, animal health etc., but can also be searched by date, food type, or brand. If available, the product labels will be posted as well. This new database is one step in the long process of the food safety act’s implementation that will help create better communication between the governmental agencies and consumers.

You can also sign up for daily or weekly updates that deliver the most recent recalls directly to your inbox.

The database can be viewed and searched here: http://www.fda.gov/Safety/Recalls/default.htm

Tags: , , , , , .
No Comments. Join the Discussion.

Food Safety Modernization Act : The Breakdown (Part 3 – The Next Steps) 3/24/2011

Food Safety Modernization Act - FDAManufacturers and importers must move forward with this information and start making decisions.

What Next?:

-Any real certifications will most likely not happen for at least 12 months or more… “Implementing this law will require over a dozen separate rulemakings and at least 10 guidance documents. The implementation of the legislation will take more than three years.” Source

-Importers will be in the process of setting up their verification system, but the exact rules and requirements of certification are in progress.

-Businesses in the food industry are urged to start thinking about what this means for them and begin preparing for more strict inspections and regulations.

Q: Why do I need to act now if it will take the FDA a few years to write any new rules?

A: Reviewing your company’s food-safety, record-keeping and product-tracking procedures can lead to performance improvements and innovation. By being in the forefront of efforts to improve food safety and providing credible information to regulators and consumers, companies can not only get a leg up on the competition, but begin marketing their food safety practices to the public.

Within one and a half years, all registered facilities will be required to conduct a hazard analysis, implement preventive controls and develop a food safety plan to document the monitoring, correction, and verification of preventive controls. The food safety plan and all related documents must be made available to FDA during inspections. As part of its food safety plan, a facility may be required to document sanitation procedures, a recall plan, a food allergen control program, supplier verification activities, and environmental sampling testing. Plans such as these take time to create and implement; it is never too early to be safe.

In preparation for the FDA audits, our partner company FactoryAudits.com offers comprehensive Food Safety Assessments that analyze your facilities’ HACCP plan implementation, chemical control processes, pest control processes, sanitation risks and hazards and much more.

Keep checking back with us as we will continue to post about the progression of this Act.

Tags: , , , , , , .
No Comments. Join the Discussion.

Food Safety Modernization Act : The Breakdown (Part 2 – The Impact) 3/24/2011

Did you miss Part One?… Food Safety Modernization Act: The Breakdown (Part 1 – The Facts)

Now that we have the background of the law covered, let’s dive into what this means to us and how it can impact our food sources and supply chains.

How will this law make imported food safer?

New authorities under the Act include:

  • Importer Accountability Importers must verify that their foreign suppliers have adequate preventive controls in place to ensure safety.
  • Third Party Certification – The FDA will be able to accredit qualified third party auditors to certify that foreign food facilities are complying with US food safety standards. In preparation for the FDA audits, our partner company FactoryAudits.com offers comprehensive Food Safety Assessments that analyze your facilities’ HACCP plan implementation, chemical control processes, pest control processes, sanitation risks and hazards and much more.
  • High Risk Foods – The FDA now has the authority to require that high-risk imported foods be accompanied by a credible third-party certification as a condition of admission into this country .
  • Additional resources – Foreign inspections will receive additional resources to complete necessary inspections.
  • Food Refusals The FDA now has the authority to refuse entry into the US of a food that has refused or failed U.S. inspection.

What is required to become a certified facility?

  • The FDA is in the process of developing a proposed rule that will establish science-based minimum standards for the safe production and harvesting of fruits and vegetables and will address soil amendments, worker health and hygiene, packaging, temperature controls, water, and other issues.
  • Food facilities will be required to implement a written preventive control plan, provide for the monitoring of the performance of those controls, and specify the corrective actions the facility will take when necessary. Don’t get caught unprepared: these seafood processors were not following the food safety rules and now they are warned and red flagged to clean up their act.

The time line is dated from the date of the enactment (January 2011). The following items are to be completed by the FDA no later than the corresponding times. (According to the law at this point in time.)

FSMA Timeline

Tags: , , , , , , .
No Comments. Join the Discussion.

Food Safety Modernization Act : The Breakdown (Part 1 – The Facts) 3/24/2011

food safety modernization actAs the Food Safety Modernization Act starts working its way through the implementation process, I thought it would be most helpful to post a breakdown of the act and what it means to importers and manufacturers of consumable products. As you will see, the Act is very new, but will definitely have a large impact on the regulations of the food industry and hence, the level of  security in our food safety system. Read on for more details.

Note: There are two more parts in this series to come!

S. 510 FDA – Food Safety Modernization Act (FSMA)

Background

  • U.S. consumers enjoy imported foods from more than 150 countries.
  • Previous food safety laws did not provide the FDA with necessary funding/staffing to properly regulate and inspect America’s food supply.
    -Less than two percent of all imported food was inspected in 2010. The latest food safety scare in China involves tainted pork, read the article here.
    -Approximately 600 foreign food facilities were inspected in 2010.
  • The U.S. Centers for Disease Control and Prevention estimate that there are approximately 76 million foodborne illnesses each year in the U.S.
    -Those illnesses cause more than 300,000 hospitalizations and 5,000 deaths annually.
    -Those illnesses also cost the country $152 billion annually.

The Approval of the New FSMA Law: December 2010

  • The 2010 Food Safety Modernization Act passed the Senate and the House last winter and was signed into law by President Obama on December 22, 2010.
  • The new law is considered the biggest change in food safety oversight in 70 years.
  • The two main outcomes of the law are as follows:
    1. The FDA will be allowed to force companies to issue recalls when they suspect food may be contaminated. (Activated Now)
    2. The law greatly increases the FDA’s ability to perform inspections on both foreign and domestic manufacturing facilities.

Food Safety Modernization Act Overview

What are the 5 major elements of the law?

  1. Preventive controls- For the first time, the FDA has a legislative mandate to require comprehensive, prevention-based controls across the food supply.
  2. Inspection and Compliance- The law specifies how often FDA should inspect food producers.  FDA is committed to applying its inspection resources in a risk-based manner and adopting innovative inspection approaches.
  3. Imported Food Safety- For the first time, importers must verify that their foreign suppliers have adequate preventive controls in place to ensure safety, and FDA will be able to accredit qualified third party auditors to certify that foreign food facilities are complying with U.S. food safety standards.
  4. Response- For the first time, the FDA will have mandatory recall authority for all food products.  FDA expects that it will only need to invoke this authority infrequently since the food industry largely honors the requests for voluntary recalls.
  5. Enhanced Partnerships- The legislation recognizes the importance of strengthening existing collaboration among all food safety agencies—U.S. federal, state, local, territorial, tribal and foreign–to achieve our public health goals.

FSMA By the Numbers

Cost: $1.4 Billion – over next 4 years

Necessary Staffing: Over the next 4 years, the FDA will be hiring 2,000 new inspectors.

Inspection Schedule: The bill requires the inspection of 50,000 foreign and domestic food production facilities by 2015.

  • Inspections are to be completed by either the FDA or state, federal or local agencies acting on the FDA’s behalf.
  • Projected Foreign Facility Inspection Breakdown by Year:
    2011
    : 600 inspections
    2012
    : 1200 inspections
    2013
    : 2400 inspections
    2014
    : 4800 inspections
    2015
    : 9600 inspections

For your reference, you can read the full text of the act here.

Read part two of the series: Food Safety Modernization Act: The Breakdown (Part 2 – The Impact)

and part 3 of the series: Food Safety Modernization Act: The Breakdown (Part 3 – The Next Steps)

Tags: , , , , , , .
No Comments. Join the Discussion.

China Pumps up the Orange Business 1/4/2011

china orange productionA new study has been launched by the Florida Citrus Commission to study China’s growing stake hold in the orange juice and citrus businesses. As part of China’s initiative to “Develop the West,” a national effort has been launched to coordinate and increase citrus production. China already leads the “fresh citrus” export market according to the executive director of the Florida Department of Citrus. In the last decade, China has ramped up fresh citrus production by 170% (including oranges and pomelos/grapefruits).

Orange juice is a commodity of specific concern for Florida production because of China’s previous success at dominating the apple juice market. In the early 1990’s, China launched a national effort to expand apple and apple juice production. They began about even with the U.S., owning nearly 20% of world apple production. China now produces seven times more apples than the United States and owns about 50% of global apple production. China supplies the majority of the world’s apple juice exports and two-thirds of the American apple juice market.

China’s share of the global citrus production has increased 900% between 2002 and 2007. However they are still less than 1% of the global market. Only time will tell if the OJ surge will be as successful as the apple initiative. Let us know what you think. Will China be successful in the global OJ marketplace?

Reporting Source

Tags: , , , , , , .
No Comments. Join the Discussion.

Caterpillar to build new Engine Plant in Tianjin 11/23/2010

China Manufacturing - Caterpillar Buckets

China Manufacturing - Caterpillar Buckets

Caterpillar Inc., one of the leading heavy industrial equipment companies in the world, has recently announced their new plan to further expand their manufacturing operations in China. Set to open in 2013, Cat will build a $300M engine manufacturing plant in Northern China to produce their 3500 series of large engines to be used in their oil-and-gas, marine, and electric power sectors. The Tianjin plant will be Caterpillar’s third manufacturing site for the 3500 series engines.

Opening a plant in Tianjin will allow Caterpillar to be better positioned to compete in the global marketplace as well as support their growing customer base in China and throughout Asia.

This is not Caterpillar’s first endeavor in China however. Earlier this year they announced a new logistics center to improve its regional supply chain, to be built in Suzhou. They also revealed plans to build a plant in Wujiang for hydraulic excavators and another plant for excavator production in Zuzhou.

How will this impact the current production facilities? Caterpillar has said that the new production plants are not expected to impact existing employees (such as those in the Lafayette, Ind. plant) due to the increase in demand from China and the surrounding regions.

Full Article

Tags: , , , , .
1 Comment. Join the Discussion

China Food Prices: Still on the Rise 11/22/2010

China Food Prices- Farmers Market in BeijingThis morning, an article out of the Sydney Morning Herald in Australia reports on the climbing food prices that continue to be seen in China. Farmers Markets throughout China have seen a spike in prices this year.

Some say the rise in feed and seed costs are responsible, starting a chain reaction: farmers must charge the suppliers more for the raw commodities,  who then turn around and truck it to the markets on trucks fueled with highly priced diesel, who pass on their costs on to the merchants, who then pass it on to the customers.

This food price inflation can be seen across the board, from the cost of a dozen eggs , that has risen almost 50% since the summer months, to the price of leeks that has doubled in the past year, according to one shopkeeper in Beijing. The annual food-price inflation hit 10.1% in October compared to 2009.

Causes? Economists worry that the economy is now starting to overheat as a result of the two year stimulus and the excess money floating through the economy.

Last week Premier Wen Jiabao announced food price controls on certain commodities including cotton, grain, oil and sugar and has introduced subsidies to some low-income families. Although some analysts believe these actions are designed to be symbolic, as a way to reassure the poor, they do reflect the government’s efforts to combat inflation.

The question looming in many boardrooms this month is what the impact these price increases will have on importer’s supply chains.  With China exporting billions of dollars a year of food products to companies in the United States, these increases could present an interesting challenge to this industry as a whole.  I’d be very interested in hearing what food importers are seeing out there and welcome any additional insight….

Full Article

Picture Source: AFP

Tags: , , , , .
No Comments. Join the Discussion.

China and the Wine Industry 11/12/2010

china wine auction chateau lafite rothschild 1869As an avid wine enthusiast, I think it is necessary to write a post about China’s growing position in the wine world. It may be surprising for some of us to hear that Hong Kong is now the world’s 2nd largest center for Wine Auctions in the world. It has surpassed London and is second only to New York. In fact, a world record was set this year at an auction in Hong Kong with the most expensive bottles of wine ever sold on record. Three bottles of 1869 Château Lafite-Rothschild (world famous French wine from the Bordeaux region) were sold for an astounding, $232,692 USD…each! The one auction sold $8.4 million worth of wine!

As more and more Chinese have started to enjoy the wonderful world of wine and wine collecting, entrepreneurs have been finding ways to capitalize. A number of abandoned factories in Hong Kong have been converted into wine storage units complete with motion detectors, chiller rooms, humidity monitors and automated temperature controls: all the necessary precautions for storing world class wine. If only I could have a wine cellar that big!

You can only imagine the importance for the different wine makers of the world to take advantage of the already huge, and growing market for wine consumption and sales in China. As for producing wine? I think that will be left  to the professionals.

Want to attend a huge food and wine expo? The China International Foodstuff Exposition (CIFE). The 7th annual expo held in Guangzhou, in the same facility as the Canton fair, is going to be held from June 2-June 4th, 2011. The expo this past year had over 25,000 visitors , 523 exhibitors from 23 countries/regions. CIFE is known to be the largest trade fair for the food and beverage industry in South China.

Full Article
World Record china Wine Auction

Photo: Reuters

Tags: , , , .
No Comments. Join the Discussion.