Congressional Quarterly put it this way:
IMMIGRATION BILL APPEARS DOOMED AS CLOTURE VOTE FAILS IN SENATE
Comprehensive immigration legislation, President Bush’s top domestic priority this year, suffered a devastating blow in the Senate today that may prove to be the death knell for the bill in the 110th Congress.
On a 46-53 vote, the Senate failed to invoke cloture and limit debate on the bill (S 1639). It was the second time this month that backers of the legislation proved unable to muster the 60 votes needed to surmount opposition to the legislation from conservative Republicans and a mixed group of liberals and Democrats representing more generally GOP states. Indeed, the effort picked up only one new vote since June 7, when an effort to limit debate on an earlier version of the bill failed by 45-50.
The legislation before the Senate was the product of a “grand bargain” involving the White House and about a dozen senators from both parties. But the fragile compromise suited almost no one entirely…
United Fresh Produce Association expressed itself this way:
United Fresh Bitterly Disappointed
in Senate Action Today on
Comprehensive Immigration Reform
Washington, DC — In a procedural vote today by the United States Senate, debate on legislation that would reform our nation’s immigration laws was blocked and comprehensive immigration legislation was pulled from the Senate floor. A vote was called earlier today that would have ended debate on the bill and allow the Senate to move forward with final consideration and possible passage. It failed to secure the 60 votes required by a vote of 46-53 and effectively ended any consideration for immigration reform for the foreseeable future.
“We are deeply disappointed in the lack of fortitude in the Senate to address one of the most serious policy and human issues facing our country today,” said Robert Guenther, Senior Vice President of Public Policy for United Fresh Produce Association. “This country expects our elected officials to demonstrate leadership and today that expectation was dashed by many U.S. Senators,” Guenther added.
The bill would have addressed many of the problems associated with our nation’s immigration laws, including enhanced border security; increased enforcement of employer prohibitions in hiring illegal immigrants; a transition to legal status of the 12 million illegal aliens currently in the U.S.; and provisions for future temporary worker programs to fill jobs where there are insufficient U.S. workers. Most importantly, this legislation would have secured a legal agricultural workforce while offering a practical approach to stabilizing the farm worker labor crisis.
This fight is far from over, and the produce industry has made it clear that inaction is unacceptable. Over the past 18 months, hundreds of industry members have gone to Washington, DC to participate in grassroots efforts to encourage Congress to support American agriculture.
“Apple growers have spoken of leaving fruit on their trees. Vegetable farmers have said they must choose which crops to harvest, because they were short workers to pick them all. Produce shippers and packers are offering wages far above minimum wage and exceeding local pay rates in other business sectors only to find a handful of applicants for more than 100 job openings. Too much is at stake for our industry to stop now,” Guenther added. “United Fresh will continue to demand Congress address this important issue,” Guenther concluded.
The disappointment of Robert Guenther, Tom Stenzel and the rest of the team at United Fresh is palpable and understandable. Not only did they work masterfully, forming alliances, working with regional groups, working with the nursery people, etc., but they tapped into a great grassroots effort.
United Fresh pulled out all the stops. PMA worked the buying end of the industry. The regional associations all hit their representatives up hard. So many worked so hard. Jim Allen at New York Apple Association was a magnificent advocate for his growers. He wrote guest columns everywhere that would have them — we did a few at the Pundit including here and here. Jim even got Myra Gordon, Executive Administrative Director at the Hunts Point Terminal Produce Cooperative Association, to put on her best St. John’s knit and go door to door scoring signatures on a petition. Everyone played every angle.
In the end, it must be noted, the produce industry succeeded, its interests agreed to without any real controversy. Alas, the bird on whose wings this industry hoped to fly, was simply too heavy to get airborne. It turns out that though immigration reform may be important to agriculture, it is not an issue that Congress perceives as primarily agricultural in nature.
We’ll have many a day to discuss the best strategy now and what the options might be in the weeks and months ahead.
For this weekend, let us tip our hat to the people who really tried to make something happen for this industry. We are very lucky to have them.
The USDA just updated its resource list on agricultural biotechnology — Genetically Modified Organisms (GMOs).
We should all be up on this issue because the future is, ineluctably, one of GMOs. Yes, you will hear many objections, and GMOs are not allowed in organics, at least for now, but the advantages are so great that the world will eventually turn to GMOs.
In the midst of the spinach crisis, The Wall Street Journal ran a great piece pointing out that even in France — a hotbed of anti-GMO activism — French farmers were increasing plantings of the one GMO product authorized for planting in France: Corn:
MARMANDE, France — In a country with strong and often romantic ties to food and the land, and amid this bucolic landscape of neat vineyards and village butchers, U.S. biotech companies have found an unlikely ally in their battle to bring genetically modified crops to Europe — French farmers.
More French farmers are sowing the one genetically modified seed permitted in the European Union, called transgenic corn, saying they want cheaper, better protection from pests. But that’s produced another kind of annoyance, a minor ground war with environmental activists and fire from politicians in Paris.
French farmers will grow 12,350 acres of genetically modified corn this year, more than 10 times as much as in 2005, according to the French corn-growers association…
Claude Menara, an ebullient 52-year-old farmer, says that for years he watched American farmers ship billions of euros worth of genetically modified foods to Europe, while he grew traditional corn on his farm near Bordeaux. While EU rules allow farmers here to grow only transgenic corn, the Union has been steadily adding to the list of genetically modified foods that can be imported.
Last year, Mr. Menara decided he’d had enough: He planted 17 acres of transgenic corn and much more this year. “It’s a business,” says Mr. Menara, whose bottom line approach to genetically modified seeds is not shared by many of his neighbors, who don’t use them. The Monsanto-patented corn saved him about $38 an acre in pesticide bills last year, he says.
Use of the corn is spreading elsewhere in Europe, too. The Czech Republic, Spain, Portugal and Germany are all growing more than before. Spain leads the pack with 148,200 acres. Farmers in the United Kingdom, Ireland and several other EU countries are also considering genetically modified corn.
But it’s in France, Europe’s biggest corn exporter, where the growth is sharpest….
This summer, activists — including Jose Bové, who once served 44 days in prison for destroying a McDonald’s — have vandalized dozens of farms, fought farmers in court and warned of irreversible environmental catastrophe if genetically modified crops are allowed to take root in Europe. In a recent speech, Ségolène Royal, the favorite to win the Socialist Party nomination to run for election as French president next year, called for a ban on planting the crops in France…
It might be noted that Ségolène Royal lost the election.
Besides, GMOs are changing. We’ve thought of them as useful tools to increase yields. That was just the beginning. Here is an article that details how researchers have genetically modified Kitaake rice to deliver a “vaccine” against cholera:
Dr Tomonori Nochi and his colleagues at the University of Tokyo’s Institute of Medical Science has made an astounding breakthrough in tackling the scourge of cholera that afflicts a vast majority of Africa, Latin America and parts of Asia. A new rice-based vaccine has been developed to deliver effective and inexpensive treatment against this killer disease.
Cholera is a severe intestinal disease endemic to the tropics, manifesting as diarrhea. The causal organism, a bacterium, Vibrio cholerae, spreads among humans through ingestion of contaminated food or water. The pathogen produces an enterotoxin that acts on the mucosal epithelium lining the small intestine and is responsible for the characteristic massive diarrhea caused by the disease.
In its most severe forms, cholera is one of the most rapidly fatal illnesses known and can cause death in a healthy adult within 24 hours of onset of the disease! Although antibiotics such as tetracycline, ciprofloxacin and azithromycin can reduce the duration and severity of cholera, drug-resistance is being reported regularly.
Traditional protection from cholera, as indeed with many other diseases caused by microbial infections, has been bolstered through immunity either through exposure to the disease-causing organism or through vaccines containing live, modified or dead micro-organisms. Vaccines and their administration, though, are not without their share of impediments. Right from preparation until it is administered, with intervening steps of packaging, storage and transportation, vaccines typically require an unbroken cold chain, which is rather hard to come by in developing third-world nations that are struggling to have road lights and clean drinking water in their taps.
The assistance of trained paramedics is mandatory as most vaccines are administered through a syringe and a needle. Recycling needles often resorted to in indigent societies to save on costs open a Pandora’s box of spread of other diseases on an unsuspecting population already beset with maladies of diseases, malnutrition and poverty. Besides, vaccines come with a fixed shelf-life and have been known to be ineffective even under the best of cold-chain practices.
Fortunately the rice can deliver the vaccine:
Since the rice-based vaccine comes from an edible part of the plant, it is safe, inexpensive to produce in large quantities and can be orally administered. It is, further, a massive improvement over most other traditional plant-based oral vaccines since rice can easily be stored at room temperature for 18 or more months, and, once administered, its protein body protects the vaccine from digestive enzymes that would otherwise render it ineffective. Rice also has greater protein content than some of the other starch-based edible vaccines currently under experimentation for a variety of infectious diseases.
Besides, being a major food staple in most of the developing countries that are predominantly afflicted by similar diseases, the tradition of cultivating paddy in these societies helps. In addition to the huge savings from obviating the cold chain, which could run into several hundred millions of dollars annually, additional issues of purifying the antigen from the rice prior to administering it to humans is also rendered unnecessary. Other diseases targeted for rice-based vaccines include the pesky influenza and the much dreaded HIV.
We are going to feed the world on fewer acres, with less environmental impact. We will alleviate disease and human suffering. We will create proprietary items that both give pleasure and are functional for consumers and give growers and retailers a way to differentiate themselves.
And we will do it with GMOs. Download your resource guide here.
If you are disappointed in the outcome of the immigration bill, are concerned with future food safety regulation, or just want to understand how our government and our industry government relations efforts work, make sure you mark your calendar to attend the Washington Public Policy Conference, sponsored annually by United Fresh. It is scheduled for September 12-14, 2007.
There are many events in the produce industry but nothing quite like this one. It is unique in the window to power it provides all attendees and impressive in the way United marshals the whole industry to project power and influence in D.C.
You can look at the schedule here. The Pundit’s favorite part is the “March on Capitol Hill,” which United describes this way:
United Fresh members march on Capitol Hill
The WPPC is a unique industry event in that your direct participation shapes the most important afternoon of the conference. Whether rookie or long-time produce advocate, you’ll be part of the largest produce industry grassroots March on Capitol Hill. United Fresh does all the work setting up over 100 group visits with Members of Congress from your home cities and states.
Senator Hillary Rodham Clinton meets with New York State Apple Association, Inc., President Jim Allen during WPPC Congressional Visits.
As part of pre-arranged small groups, you’ll visit “face to face” with key senators and congressmen to tell them our needs for a stable labor force, increased produce in schools, and more food safety research for a successful and competitive produce industry. Every congressional visit offers different challenges and opportunities, and you just might have fun!
And new this year, in partnership with the National Watermelon Association, is a USDA Briefing that United describes this way:
WPPC attendees are invited to the U.S. Department of Agriculture to meet with senior USDA officials and enjoy a taste of summer with our partners at the National Watermelon Association. Secretary Mike Johanns and his senior staff will host a group of attendees in a discussion of the Farm Bill and other key agricultural issues.
Frieda Rapoport Caplan Family Business Scholarship recipient Fred Recchiuti, Basciani Mushroom Farm (second from left), is congratulated by Tom Stenzel, president United Fresh, Karen Caplan, president & CEO, Frieda’s, Inc. and Nick Tompkins, CEO, Apio, Inc.
And remember, if your business is a family business, and you apply now, you may win one of the select scholarship slots offered by the Frieda Rapoport Caplan Family Scholarship Program, which we discussed here.
Even if you wind up paying the registration fee (and United does offer $50 off for first time registrants), it is a unique event that you should experience.
Ranking Member of the Senate Agriculture Committee Saxby Chambliss greets Dr. Larry Beasley of A. Duda & Sons, Inc.
Aaron Burrma and Chadd Buurma both with Buurma Farms, Inc., with Michigan Congressman Vernon Ehlers.
Long time attendees Tim Fleming, Tim Fleming Sr, Senator Bob Dole, Jan Fleming of Strube Celery & Vegetable Company
Robert Gordon of FreshPoint/Red’s Market; Dan Vache of Sensitech, Senator Bob Dole; Tim Vaux of The Vaux Group; Joseph Mercurio of Joseph Mercurio Produce Corporation, and Charles Ciruli of Ciruli Brothers/Amex Distributing Co., Inc.
Secretary of Commerce Carols Gutierrez and Maureen Torrey Marshall, Torrey Farms Inc.
Texas Congressman Lloyd Doggett samples Orchid Island Juice Company’s product
Lee Ann Oxford, L&M Companies; Greg Cardamone, Ag Warehouse & Packing; Congressman Robin Hayes, Pam Miller Minority Staff Director of the Horticulture and Organic Agriculture Subcommittee
Congressman Tom Davis from Virginia with the
Tanimura & Antle team at Fresh Festival.
Maureen Torry Marshall, Mark Munger, Tim Vaux, Vic Smith, Drew Duda, Reggie Griffin, Chuck Ciruli
Take a look at the photos we’ve run of the event. Look at the industry members mingling with powerful figures in Washington, showing that the conference gives industry members an opportunity to get close to important people in the world. It is a chance to network with industry peers but with the added plus of working together to boost the trade’s profile in the corridors of power in Washington, D.C.
If you haven’t been to D.C. since your high school trip, make sure to add some time. It is our nation’s capital, and it is a shame if we don’t make ourselves a part of America’s historical journey.
You can download the brochure here. Get hotel information here. Download a registration form here.
WPPC Fast Facts
The United Fresh Washington Public Policy Conference (WPPCC) began its second decade with the 2005 conference. It has grown each year beginning with about 100 attendees in 1995 and expanding to nearly 300 in 2006. Throughout, it has been the produce industry’s signature event in bringing together grassroots members from around the country to voice their issues to national government leaders.
United Fresh has held an annual public policy event in Washington, DC, for some 60 years, since moving its HQ office here in 1943. Originally called the Congress of Committees, this event has been a time for volunteer leaders of the association to come together in Washington to conduct their business meetings and make their views known to the nation’s governmental leaders.
The Congress of Committees generally included speakers from USDA, other government agencies and the Congress, but did not include the strong outreach to Capitol Hill that the event is known for today. The event focused more on conducting the business of the association.
On June 22, 1994, United Fresh hosted its first Fresh Festival on Capitol Hill as a stand-alone event as part of its National Fresh Fruit and Vegetable Month celebration. The event was conceived as part of the professional staff lobbying effort to promote the importance of the fresh produce industry to Congress and other national leaders through a visual display and tastings of fruits and vegetables from around the country.
Based upon that success, the following year United Fresh re-launched the Congress of Committees in September 1995 as the Washington Public Policy Conference, including the Fresh Festival on Capitol Hill. This year, United Fresh celebrates 12 years of success in expanding member participation in Washington advocacy and shaping legislation and regulations affecting the produce industry.
By the way — Now that the immigration compromise is in shambles, if you want to go down close to the border and reflect on immigration policy while doing some world class birding, we recommend a stay at the Casà Santa Ana bed and breakfast.
You can find the website here.
We received a letter dealing with irradiation, which we publish in today’s Pundit’s Mailbag. Take four minutes out of your life to watch an NBC video with dramatic footage of executives at Sadex Corp, including Harlan Clemmons, President of the company, eating salad after it has been contaminated with E. coli and then irradiated.
Then Produce Pete does a taste test. Kevin Reilly, Deputy Director, Prevention Services for the California Department of Health Services, says the risk is miniscule, so he eats fresh lettuce and spinach — although he is diabetic.
The video ends with an interview with a mother whose child was sickened by an outbreak on fresh produce declaring that even a small risk is not OK — because her child got sick.
There are really only two things you can say about that mother’s interview:
First, she is clearly making an irrational statement. One doubts she will stop her child from riding in cars, flying in airplanes and doing a hundred things far more dangerous than eating produce.
Second, it is just as clear that policy makers have no stomach for fighting with her. No amounts of deaths or serious illness will be considered acceptable in fresh produce. That is why we need a kill step.
You can see the video here.
Our piece, As Immigration Bill Comes To A Vote, Questions Surface On Farm Wages, led Billy Heller of Sunripe Produce to comment in an article we entitled, Pundit’s Mailbag — A Future Without Farm labor.
Now another industry luminary, Frank McCarthy, who we’ve heard from many times, including comments on cartoon marketing here, private companies here, and the passing of Ernest Gallo here, pointed out a flaw in the assumptions made in a quote we excepted from a U.C. Davis publication.
The simple and uncomfortable truth is that we live in a global economy. We have already seen close to a quarter of the Washington State apple business move South or off shore; virtually all of the frozen fruit and vegetables are already imported precisely because of high US labor costs.
The supply chain must maintain its margins to be viable so a $.05 a pound cost increase for apples ($2 for a 40-pound carton) is equal to roughly $.15 per pound at retail. For that kind of money (and much less), consumers and retailers will change vendors.
I believe that the export of American food production is the cheapest form of foreign aid and that the State Department has used this as a policy to help and bring stability to our neighbors to the South and West.
— Frank McCarthy
Vice President of Marketing
Bridgeport, New Jersey
The quote Frank is referring to goes as follows:
In order to determine how much raising farm worker wages would affect food prices, we have to know: (1) the farmer’s share of retail food prices, as well as; (2) what share farm worker wages and benefits are of farmer revenue or costs. For most fruits and vegetables, wages and benefits paid to farm workers are about one-third of a farmer’s costs. Thus, farmers who get about $0.16 for a $1 pound of apples, and $0.19 for a $1 head of lettuce, have farm-worker costs of 5-6 cents on a typical $1 retail item of produce.
How much would farm worker wages increase if some of these immigrant workers were not available? In 1966, one year after the end of the bracero program, the fledgling United Farm Workers union won a 40 percent wage increase for table grape harvesters. Average hourly farm-worker earnings were about $7.56 for US field and livestock workers in 2000, according to a USDA survey of farm employers, and another 40 percent increase would raise them to $10.58.
If a 40 percent farm-worker wage increase were fully passed on to consumers, and if there were no farm productivity improvements in response to higher farm wages, the 5-6 cent farm labor cost of a pound of apples or a head of lettuce would rise to 7-8 cents, and the retail price would rise from $1 to $1.02-$1.03.
A large increase in farm wages translates into a small retail cost increase because: (1) farm labor is a third of farmers’ costs; and (2) farmers receive only a fraction of the retail price of food. For a typical 2.5-person consumer unit, a 40 percent increase in farm worker wages that led to a three percent increase in retail fresh fruit and vegetable costs would increase the spending of a typical consumer unit by $9 a year, raising expenditures from $301 to $310.
Frank points out the Achilles heel of the analysis. It assumes that an increase in farm labor costs would be passed through to consumers without any other increase in costs. Now we know that, at least as business has traditionally been done, that won’t happen. Supermarkets typically mark up based on a percentage. For example, when they buy a more expensive product, they try to maintain percentage margins.
So the question has to be, “Is there another way?” Is it possible to pay more to farm workers without it reverberating through the supply chain? It certainly will be a challenge, and in some cases impossible, as a higher price often carries additional costs. Accounts receivable must be financed… insurance is a greater expense… a truck takes on greater liability in carrying a more expensive item, etc.
Still, there may be ways to make adjustments. We really are talking about looking for a domestic version of Fair Trade programs. These programs, very popular in Britain, focus on paying a premium to a community to help the people of that area. We’ve been critical of Fair Trade because it tends to help one area at the expense of others.
Here, though, that is the point: We won’t be helping Mexico by not hiring their workers. The whole point is to preferentially help Americans so they will take these jobs. We will leave for another day the question of whether that is actually in America’s interest.
In the U.K., major chains such as Sainsbury’s have gone Fair Trade on whole categories. This involves paying more to help banana growers in St. Lucia. It seems there are many British citizens happy, even anxious to pay this “Fair Trade Premium.” Is it inconceivable that Americans might be willing to do the same, especially to help their fellow Americans and, at the same time, maintain a domestic produce growing base?
Another way is to have the government pay it. We already do this to an extent with our Earned Income Tax Credit. Under this program, as long as they have a job, low-paid people get money from the government to subsidize their wages.
If it is an important national priority to maintain the viability of our domestic produce industry, and if the domestic industry cannot survive if it has to pay American-level wages to do the work, perhaps the Earned Income Tax Credit could be expanded to provide a bonus to those who labor in certain “critical industries.” Perhaps those industries getting this "critical" certification allowing increased Earned Income Tax Credits would be the same ones who were intended to benefit from the AgJOBS program.
Perhaps all this is unlikely to transpire. If so, the options are simple: Increased immigration, legal or illegal, or mechanization. There seems little stomach in America for more immigration of low wage, low skill workers so we better hope mechanization comes quickly.
Frank’s comments on the use of food in foreign aid is on the money. We have used cheap food as a form of foreign aid. Yet among development experts, such aid is deeply criticized. These poor countries can’t compete on Boeing Jets and supercomputers, but they can compete on farm products.
By donating food, typically the big grain crops, we depress local markets and make it impossible for local farmers to make a living. Thus, in some cases, our aid feeds everyone today, but also impoverishes them long term. As the saying goes: “Give a man a fish; you have fed him for today. Teach a man to fish; and you have fed him for a lifetime.”
Of course, in today’s cutthroat business world, we also know that if you “Teach a man to fish, you introduce another competitor into the marketplace.”
By the way, did you know you can make those “talking fish” toys say whatever you want? Try it here.
Many thanks to Frank for his astute commentary.
Our article, Thailand’s Mangosteen and Mango Exports Will Increase Irradiated Presence, brought this note questioning the financial viability of irradiation:
I agree that the fresh-cut industry needs to consider Irradiation as a sterilization step. It’s proven and safe technology. What is missing in this equation is “How can this technology be made affordable?”
Now do not take this the wrong way, but my limited understanding of using irradiation involves a significant capital investment in a stand-alone facility. This may be workable for the large fresh-cut processors but will effectively block the small and medium sized processors from using current technology. A lot of the small and medium sized fresh-cut processors are responsible for the “innovation” in this industry.
If irradiation is the solution, the technology must be affordable, portable and safe to operate. Spending $300,000 to $800,000 is probably manageable for a small or medium sized processor. Spending 5 to 10 million dollars will limit the number of players in the field.
providing safe product that the consumer or end user can use in confidence is the bottom line. No one in this industry wants another public health outbreak with illness or death.
— Warren Debnam
Green Glen Produce
Many thanks to Warren for bringing up this point. It is all fine and dandy to identify a technology as safe and effective, but viability depends on economics.
We won’t be able to figure the exact cost on fresh-cuts until the government approves a specific dose, but the EPA had this to say about costs comparing irradiation favorably to methyl bromide treatment:
The actual cost of food irradiation is influenced by dose requirements, the food’s tolerance of radiation, handling conditions (i.e., packaging and stacking requirements), construction costs, financing arrangements, and other variables particular to the situation (Forsythe and Evangel 1993, USDA 1989).
Irradiation is a capital-intensive technology requiring a substantial initial investment, ranging from $1 million to $3 million (or possibly more for special applications). In the case of large research or contract irradiation facilities, major capital costs include a radiation source (cobalt-60), hardware (irradiator, totes and conveyors, control systems, and other auxiliary equipment), land (1 to 1.5 acres), radiation shield, and warehouse. Operating costs include salaries (for fixed and variable labor), utilities, maintenance, taxes/insurance, cobalt-60 replenishment, general utilities, and miscellaneous operating costs (Kunstadt et al., USDA 1989).
Based on a review of public information on the costs of treating a variety of food items with irradiation, Table 2 presents data on the per-unit costs for gamma irradiation and methyl bromide treatments for selected crops. Although irradiation is more expensive than fumigating with methyl bromide, the cost of irradiation may be offset by its many benefits, including reduced damage to fruits and vegetables and an extended shelf life. Furthermore, it is likely that irradiation costs will decrease in the future as the number of commercial irradiators and volumes of treated commodities increases. In addition, the relative proportion of the treatment cost is small when compared to the value of the commodity. Furthermore, other related costs (i.e., harvesting, packaging, storage, processing, and transportation costs to bring the commodity to market) further reduce the percent contribution of irradiation treatments, making it a relatively insignificant cost overall.
Table 2. Comparison of Estimated Post-Harvest Treatment Costs for Selected Crops
(cents per pound)
(cents per pound)
0.88 to 0.94
2.5 to 8.1
0.88 to 0.94
0.9 to 4.2
0.88 to 0.94
Data not available
Sources: Forsythe and Evalgelou 1993 and 1994, Morrison 1989.
The American Nuclear Institute says irradiation can be expensive but in line with other food processing techniques:
It is still a relatively expensive technology — Broken down, irradiation costs range from US $10 to $15 per ton for a low-dose application, up to US $100 to $250 per ton for a high-dose application. These costs are competitive with alternative treatments such as canning, freezing, pasteurization, refrigeration, and fumigation. In some cases, irradiation can be considerably less expensive.For disinfestation of fruit in Thailand and the United States, for example, it has been estimated that the cost of irradiation would be only 10%-20% of the cost of vapor-heat treatment.The cost to build a commercial food irradiation plant is in the range of US $4 million to $10 million, depending on its size, processing capacity (respectively 15 to 250 + million pounds per year throughput capacity), and other factors.
In most cases, low-dose applications can be used to deal with phytosanitary issues but high doses are used to sterilize. With 2,000 pounds in a ton, these numbers indicate a cost of from half a cent to ¾ of a cent per pound for low-dose application and from five cents a pound to 12.5 cents a pound.
Illinois State University did a research project on irradiation costs on pork and came up with the following:
Results with specific operating, investment and volume assumptions include, irradiation of sliced boneless ham using an X-ray irradiator would be a profitable business for annual throughputs of 100, 150, and 200 million pounds per year, but not, however, for a throughput rate of 50 million pounds per year. A business implementing a Cobalt-60 irradiator would be profitable even at the lowest throughput of 50 million pounds annually. The highest net present value was generated by the 200 million pound rate using Cobalt-60 irradiation.
Furthermore, contracting with an off-site company was profitable for throughput rates of 150 and 200 million pounds per year. Specific costs estimates were $0.04, 0.02, 0.015, and 0.01 per pound for 50, 100, 150, and 200 million pounds annually, respectively for the X-ray system. The Cobalt-60 system resulted in cost estimates of $0.02, 0.015, 0.01, and 0.008 per pound for 50, 100, 150, and 200 million pounds annually, respectively. Contracting services resulted in costs of $0.06 per pound for 50 and 100 million pounds annually and $0.05 per pound for 150 and 200 pounds annually. The cost of $0.06 per pound for contracted services resulted in negative revenue values based on the present business simulation model.
So with different methods, we have different prices ranging between $.008 cents per pound and $.06 cents per pound, depending on the type of irradiation and the volume.
Remember, though, that food safety is always expensive and, although irradiation is part of a good food safety system, and it should not be considered a license to abandon other good safety practices, it is still possible that some of the cost could be offset with lower expenditures in other areas related to food safety and in reduced liability insurance bills.
As far as the capital cost of building a facility goes, that is a long time in the future. If the process is approved for bagged salads, the initial use would be to do a line at existing irradiation facilities. Because you do irradiation after the bag is on the product, one could easily imagine a truck stopping by the SADEX facility in Sioux City, Iowa, on the way to an east coast delivery.
If this is sufficiently successful, one would expect that one of the companies, such as Sadex, which operate the 50 existing food irradiation plants, would open a plant in Salinas and one in Yuma to serve as a public irradiation facility.
Only if these irradiated lines were such a hit that major processors wanted to convert to 100% irradiated product, would large processors consider building their own irradiation plants. The numbers thrown around are between $4 and $8 million to build a plant capable of handling a major processing plant’s volume.
It is, of course, a lot of money. Then again, Dole’s new plant in North Carolina cost $54 million to build, so it is not inconceivable.
Smaller processors unable to build such facilities would have to outsource and use public facilities. This would possibly put them at a disadvantage, but maybe not… the large capital costs of these facilities means that a key component of cost is utilization — a public facility drawing from diverse clients may operate efficiently 24 hours a day, 365 days a year.
A private facility drawing only on its own production may have a lot of down time. They don’t even pack product in Yuma or Salinas for big chunks of the year, so the economics are uncertain. It is not clear that smaller producers will be disadvantaged.
In any case, the fact that so much tropical fruit is being irradiated indicates that the economics are at least plausible. We need to get the approval and then start doing tests. Our guess is that the first irradiated bagged spinach and lettuce will probably come from a small company, with no consumer brand, a no-name company that has nothing to lose by being attacked by the predictable attackers.
The big boys will sit back and let this guy absorb the attacks. But once the novelty is gone, we expect irradiated produce from everyone. If there are a few more outbreaks — as we have discussed with our correspondent Bob Sanderson of Jonathan’s Sprouts — the FDA is likely to make it mandatory, much as most states require pasteurization of milk.
Many thanks to Warren for bringing the economics of this important issue to our attention.