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Reality On The Border:
Businesses Suffer At Hands Of FDA

With all the controversy and confusion regarding what precisely the FDA may be doing on the US/Mexico border, we thought it best to reach out to some industry members who are dealing with the realities of what is happening.

We asked Mira Slott, Pundit Investigator and Special Projects Editor, to find out more:

John McClung
President, CEO
Texas Produce Association
Mission, Texas

Q: What is the latest information you’ve learned from FDA?

A: I haven’t gotten a straight answer from FDA. FDA is increasing sampling of basil, cilantro, jalapenos and Serrano peppers. They are doing it under a hybrid system. I don’t know what increased sampling means. It’s not just at the border but other places in the distribution chain.

Unless there is a specific reason to believe there is a health risk, any product sampled can normally be moved into commerce. It’s up to the company to make the decision if they want to risk a recall. Most of the time, it’s not much of a risk. But in this case, FDA is not allowing distribution at the end of the chain. So product cannot go to the end user. It’s a mechanism of preventing backing up at the ports. As a practical matter, it takes four or five days to get results on average, and there will be a lot of samples that go a lot longer than that. The closest lab to Texas that FDA will use is in Arkansas.

The bottom line on this is that FDA doesn’t have any idea what caused this outbreak, and the agency is on a fishing expedition. The wider they cast the net, the more damage is done and the less likely they will come up with the solution. FDA was long overdue to switching the focus from tomatoes to salsa and other things. Now that they’ve imploded the tomato market, they’ll work their charm on other commodities.

Q: Some suppliers have been hesitant to harvest product.

A: Jalapenos can be left growing for a while, so there is no point in harvesting if product is going to sit in the pipeline deteriorating.

Q: Several executives said they heard that FDA might clear a company’s shipments after testing a total of three loads.

A: Bare in mind FDA has just started this testing process so it is still feeling it out. Unfortunately, I don’t think that will happen and FDA will continue testing all shipments.

Three loads is the standard, but FDA is not operating under standard procedures. I have calls in to get more answers. This is serious when FDA starts messing with our jalapenos. Texas is a place where you walk into a McDonald’s and they ask if you want jalapenos with your burger! Don’t mess with Texas jalapenos!

An old political hand, John’s comments include some down-home Texas wisdom: “The wider they cast the net, the more damage is done and the less likely they will come up with the solution.”

After our conversation with John, FDA fingered jalapenos but with the caveat that their implication didn’t explain the outbreak. At last word, the FDA was searching for a farm that was growing both tomatoes and jalapenos during the course of the outbreak.

Will Steele
President, CEO
Frontera Produce
Edinberg, Texas

Q: Could you update us on what is happening with your shipments?

A: Short of confusion, I can’t really tell you much more than what you already know. It’s pure frustration. I’ve been through FDA testing and analysis many times before. This one is the most frustrating because it feels like commodities are being singled out for no good reason.

We got notification about a week ago, Monday (June 30) they were going to start doing sampling analysis. Monday two loads came across and they flagged one for testing.

Q: What happened to the un-flagged load?

A: I’m fairly certain they brought the other in and distributed the product. Tuesday (July 1) rolls around and another load coming across is held for analysis. I personally called FDA on Tuesday to find out what was going on. I understand random sampling, but it is very unusual to hit two truckloads two days in a row. At this point, we put all product on hold. I heard about FDA’s expanded investigation in the media.

I called one local FDA agent and asked, what’s going on, and he said, we’re not at liberty to talk about it. The agent eventually explained that he had to sample cilantro, basil, jalapeno and Serrano peppers and green onions. I called another agent in another locale who said this is standard procedure. We must hold product until analysis is completed for clearance.

We took samples out of those same lots on Wednesday, July 2, for testing at an independent lab.

On Thursday evening before the July 4 holiday, FDA said they weren’t working and it would be anywhere between three and eight days to get results back. Now FDA is saying it needs a couple more days.

Q: What about the samples you sent to the independent lab?

A: We got them back really late yesterday (July 8) and they were negative. This morning, FDA just released lab results from that first shipment held Monday June 30 and the results came back negative. The results from that Tuesday shipment are still pending but we’re hopeful. We started harvesting again. We heard a rumor that FDA would test a total of three shipments, one more and then we’d be OK, but they may or may not. It’s up to their discretion.

I’m an optimist. I think the FDA, after hitting dead ends on fresh produce, will hopefully shift focus to where it should be. The outbreak is probably related to processed goods and they’re looking in the wrong closets.

The methodology was flawed. They don’t share information. It would be much more productive for FDA to sit with industry executives and trade knowledge. FDA needs to eliminate its us-versus-them mentality. We all want safe food. FDA has a difficult job. This outbreak is scary and the source needs to be found.

Q: Based on shelf life issues with these items, it sounds like product held for testing creates an untenable scenario for product salability.

A: Our biggest issue is that we have no real clear-cut information other than speculation. One major chain is halting the purchase of cilantro at this point until they get clarification and until then will buy domestic. The problem is starting to snowball. Jalapenos are scarce. There is no proof, and the financial impact can be great. We are starting a big program in two weeks out of Chihuahua. If this drags on, that could be devastating. My concern is that the first case in this outbreak was April 10. My peppers didn’t exist at that time. What did exist on April 10 doesn’t exist either because it’s down the sewer system by now.

What type of hold status we’re under has been clarified through the Texas Produce Association. You may ship product through normal distribution channels but it can’t go to customers. A wholesaler in St. Louis can’t ship to a chain store or food service operator because it risks ending up in the mouth of a consumer. If a positive result comes back, we have to recall. We never ship when product is under analysis. It is ignorant to do so when you don’t know the results. Even if it’s presumptive positive, it still means you have to bring product home.

Q: So at this point, you’re holding all product?

A: We’ve had two truck loads of jalapenos on hold since last Monday and Tuesday. We ceased harvesting. There is no sense in bringing in more product and having it rot.

Q: So in a round about way, while the border isn’t closed and you’re free to harvest product and bring it across, you feel the risk is too great, so in the end the result is the same?

A: One agent said it would sample up to three loads. Our customs broker has the power of attorney to speak with FDA on our behalf. We arranged that. They conveyed to FDA we’d do up to three loads of sampling. FDA is not revealing what’s happening. But in clarification of hold status, FDA now says that sampled produce, basil, cilantro, jalapenos, Serrano and possibly other products can be moved into the distribution chain before lab results are received, but can not be sold until results come back negative. They won’t back up loads at point of entry. That’s how they wash their hands of it. Essentially, there is no option but to stop bringing in product.

When I asked that one agent on Tuesday (July 1), are you going to pull more product, his reply was, that’s solely up to the agent’s discretion. That’s not true. This is an agency policy, a directive from the government. They’re saying I can ship, but it does no good till it gets to the end user. If I can’t sell the product, what’s the point? You’re not holding up the border, just piling up product down the pipe line.

Methodology is backward, FDA is reaching for answers. You can’t tie jalapeno pepper shipped on June 30 back to April 10.

Q: Do you have products other than jalapenos flagged for testing?

A: We bring in 80 different products. Cilantro, jalapenos and Serranos are products we handle that are related to this investigation. So far it’s just jalapenos that have caused problems for us. FDA isn’t stopping our cilantro, but the reason why is that we go through a vendor in the states who sources from Mexico. That vendor has been scrutinized. It’s not under my name so I’m not affected. I have the option to source elsewhere. I understand the cilantro vendor’s shipments are being stopped for testing, but I don’t know the details.

Both Will and the Pundit were quoted in the Washington Post in its piece Deconstructing Salsa In Search of Salmonella. In that article, Will pointed out that the product was losing value due to FDA quarantine:

Chile pepper importers said they are already feeling the effects of the FDA’s scrutiny of jalapenos. “I have two full truckloads of jalapenos in my building quarantined because FDA is holding it awaiting analysis,” said Will Steele, president and chief executive of Frontera Produce in Edinburg, Tex. “That was as of last Monday, and there are still no results. The salability of that produce in two to three days is gone.”

While we pointed out the irresponsibility of FDA’s conduct:

“We all put public health first, but you don’t casually crush an industry, deprive poor migrant workers of their pay, bankrupt farmers, have consumers throw out food — without triple-checking all these things,” said Jim Prevor, author of the industry blog the Perishable Pundit.

And in his conversation here, Will’s story makes three emphatic points:

1. Why in the world should the FDA add uncertainty to the damage it causes business? Why should any business anywhere have to be calling local contacts to nudge some info from them? This is not a secret project that FDA could hope to conduct without anyone knowing. So it is not a matter of keeping the sample unsullied by public knowledge. This is just bad planning on the part of FDA.

2. Semantics aside, there are many ways to achieve one’s goal. If FDA really wanted information that sampling at the border would generate, it would encourage maximum volume by letting all shipments be sold even while it takes samples. One has to assume that FDA really wants to close the border but doesn’t have the evidence to win a WTO case against Mexico, so it creates uncertainty in the marketplace in order to achieve the same goal.

3. Why doesn’t FDA do with these new items what it did with tomatoes in creating a “pass” list for regions that were not in production on April 10, 2008, when the first onset of illness had been identified? Once again, the FDA’s behavior is irrational.

Raul Cano
Grande Produce Ltd.
Hidalgo, Texas

Q: Have you been impacted by FDA’s expanded outbreak investigation?

A: We do carry those items and, of course, have been affected. Roma tomatoes were first and we got hit by that, and now it is peppers and cilantro. Randomly FDA is taking samples of tomatoes, jalapenos and cilantro. We don’t know how many items they’re going to inspect. They don’t have a system in place.

With tomatoes they inspected three loads and then we were cleared. It seems like a different system all together with jalapenos and cilantro. They stop as many loads as they want. Inspectors have gone to some of our customers to take samples. We’re afraid to bring any more loads in because we don’t know what happens. If they take samples we have to wait up to 14 days for results. Do you think that is logical or reasonable? There is no way product will last for that long. It’s silly.

Q: Are you still importing jalapenos or cilantro from Mexico? If so, what has happened to the loads?

A: We were bringing in cilantro and jalapenos as of [July 7]. We didn’t get inspected. They released the products and said we could sell them. But we’re going to stop all shipments because we can’t take the risk. We don’t know how long this will go on. Who knows when it won’t be a problem? Maybe FDA will decide the problem is no longer with salsa, but with guacamole and start to do limes and avocados. FDA is looking for contaminated jalapenos from three months ago.

Q: How are your customers reacting?

A: I had a customer call today. He said that tomatoes, cilantro and jalapenos from us that he sold to a restaurant were a problem because a person got sick after eating there. The inspectors took samples of the product and sent them to a lab and everything was fine. They didn’t find salmonella.

If my customer sold so many boxes of these items to restaurants and only one person got sick, yet all these other people were eating the same salsa, the same tomatoes, why did only one get sick? FDA keeps blaming tomatoes, and now cilantro and jalapenos going back to the growers. We should do a better job of investigating the people getting sick. For some reason, FDA is relating the outbreak to items used to make salsa. What if it’s the oil or chips? The FDA has no idea.

Q: How serious a blow is this to your company’s financial well-being? Will you be able to weather this storm?

A: The only reason why we continue doing business is because we sell a lot of items. If we stop selling tomatoes, cilantro and peppers, we are able to switch to other items. Many companies don’t have that option. The bills keep coming. If a company has to stop operations, it doesn’t matter whether that company is big or small, it can put them out of business.

Q: How do you balance the quest to protect public health when the outbreak lingers on?

A: If we look on the side of consumers, they want to be safe and that’s why FDA has to do all it can to make sure food is safe and good to eat. No one questions that, but FDA can do it a better way and in a more efficient way, while letting consumers know the truth. A lot of folks are losing a lot of money because of the way FDA has been conducting the investigation.

In America, if you arrest somebody, that person is innocent until proven guilty. FDA should not be saying the problem is tomatoes, cilantro or jalapenos when they have no proof. FDA is getting pressure from the media and the public. Sick people keep increasing, more than 900, and FDA feels they have to do something.

Q: Is this the first time you’ve had to deal with an outbreak like this?

A: We’ve been in operation since 2002. A year and a half ago, there was the Taco Bell outbreak, where Taco Bell falsely implicated green onions as the problem in an effort to make it go away. It turned out not to be green onions. And then the suspicion turned to lettuce. Everyone was freaked out and many people suffered.

To us the two key points are illustrated by this quote:

We’re afraid to bring any more loads in because we don’t know what happens. If they take samples, we have to wait up to 14 days for results. Do you think that is logical or reasonable? There is no way product will last for that long. It’s silly.

This makes the point that the FDA can destroy businesses and bankrupt people without ever banning anything — just raising the risk of doing business can often do the trick.

In America, if you arrest somebody, that person is innocent until proven guilty. FDA should not be saying the problem is tomatoes, cilantro or jalapenos when they have no proof.

This line speaks to the notion that this situation goes beyond food safety, to basic American conceptions of law and due process. In America, even for public use, you can’t take a man’s property without compensation. There is something profoundly un-American in the notion that for such feeble and hypothetical food safety gains, the government can just bankrupt people who have worked their lives to build a business.

Gilbert Ramirez
A&G Produce
Edinburg, Texas

Q: Tell us your experience.

A: FDA is going to check all shipments of cilantro and peppers. They’re checking all the loads. They say they’re going to check the product when they receive it in the U.S. I send it to my warehouse and put product on hold for at least six days; then after they get results back I can start selling. Maybe seven, eight, nine days later, they’ll call customs and my custom guy will let me know. The thing is I’m not going to bring in any cilantro under those guidelines. By the time I’m selling product, it’s decayed. Right now it’s already old. You can’t hold cilantro for a week. Cilantro has to move or it ends up in the trash.

I don’t have an issue with FDA checking shipments. Normally they check every load of cilantro for worms and other kinds of pests, but I can sell it. I can start selling right away.

Now this salmonella problem happens and first they blame the tomato, and then it’s not the tomato, so sorry to the growers who lost money, but it’s now cilantro and peppers. I don’t think people at the FDA know what they’re doing, but they want people to think they are doing something. That’s what’s wrong with the system. It’s unfair and biased.

Q: What do you mean by biased?

A: What happens for me is pretty bad. In Mexico the market will go down. On the American side, it will go up because no one will have cilantro from Mexico. People will turn to cilantro from California.

I don’t know what the motivation is for sure. All I know is that everyone is saying they want a better price for U.S. growers. They’re blaming Mexico for the salmonella outbreak even though they have no proof.

For our company, I told the guys who work for me, thank you very much, but I’m not going to have any product. I’m sorry, maybe it will last one month or two months like the tomatoes. I have eight people working for me. I’m going to close the doors for now.

Maybe I’ll bring in cabbage, but I don’t need that many people for that commodity. Jalapeno peppers and cilantro requires more labor. I just bought a nice $20,000 machine for the cilantro, and I have to make my payments. The equipment companies don’t care about what is happening to me because of the outbreak investigation. I’m getting called for payments on my machines.

It’s going to be tough for us, this thing. This is some kind of government action motivated by politics. Something is wrong here. I think politics matters. They try to tell people it’s only related to food safety. OK, no cilantro, no peppers, no this, no that. They don’t have any valid reason. I’m not an expert, but I’ve been in the produce industry 30 years. I’ve seen this several times where politics plays a part.

We’re a small company. I can’t afford to pay my employees. Right now I’m alone.

Gilbert’s story tells two key tales: First, it is not only farmers who get hurt by FDA’s actions. Think of the workers who get laid off, the salespeople who can’t sell machinery and equipment, the banks who finance that machinery, the local taxes that won’t be paid, etc. Second, the FDA’s conduct is reducing confidence in its decisions. Is it acting this way out of politics? Due to corruption? Who knows?

Surely nobody will ever think about FDA pronouncements with the same sense of certainty they may have once carried. That is a terrible loss from this Salmonella Saintpaul outbreak and not just for the FDA. If people become skeptical about the FDA, it means the FDA can’t help rebuild confidence in our products as it once could.

It can take a hundred years to build a reputation, a few minutes to lose one. The price of this outbreak is thus incalculable.

Many thanks to John McClung, Will Steele, Raul Cano and Gilbert Ramirez for taking some of their valuable time during this difficult period to share their experiences with the industry at large. We pray that all three of these gentleman and their organizations should be strengthened by their endurance of this crisis.

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