Washington Insider - Wednesday

Food Fight in DC

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

US Farm Exports To South Korea Show Big Increase

South Korean imports of U.S. meat, grains, fruits, vegetables and other farm products have risen by 25 percent this year from January through September, according to a report from the U.S. ag attache office in Seoul, South Korea.

"Despite escalated competition from export-oriented competitors, consumer-oriented American products continued to lead the expansion of export market in Korea, which reflected Korean consumers' increased demand for better value, quality and diversity," the report said. Of note, the analysis said U.S. farm product exports to South Korea will continue to increase next year, adding the current Korea-U.S. (KORUS) trade accord is partially responsible along with an improving South Korean economy.

Head of Brazil's Minvera Sees US Market Reopening To Brazil Beef in First Quarter 2018

Exports of Brazilian beef to the U.S. market are expected to resume in the first quarter of 2018, according to Minvera CEO Fernando Galetti. He told reporters that view is based on consultations with the Brazilian ag ministry.

He also noted the situation is unchanged relative to Russia's ban on certain Brazilian meat exports, but the Brazilian government was working to lift that ban "soon."

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Washington Insider: Food Fight in DC

POLITICO is reporting somewhat breathlessly this week that the main food industry lobby is continuing to splinter. The report focuses on recent turmoil at the Grocery Manufacturers Association after Campbell Soup Co. announced its departure last summer, citing differences in values after “the bitter GMO labeling fight.”

That fight is still raging, POLITICO says and now Nestle, the world’s largest food company, says it is also bailing at the end of the year “amid policy disagreements on a range of issues.”

In addition, POLITICO says that other major food companies are still “eyeing the door,” and names Dean Foods, the largest dairy company in the country, and claims that Dean has quietly decided to leave the association already as several others, including Mars, one of the largest private food companies, continues to consider its future role..

POLITICO says much of the reason is market disruption as companies scramble to adapt to consumer tastes and to compete for a share of a fairly stable market. The top 20 U.S. food and beverage companies lost roughly $18 billion in market share between 2011 and 2017, according to a recent analysis by Credit Suisse.

There’s more, the group says. While there’s no question that this upheaval has contributed to reflect many of the tensions affecting the industry now, it adds “complacency and a lack of leadership at GMA are also to blame,” based interviews with more than a dozen current and former member companies, former staff members, and other industry leaders in Washington.

GMA, however, is not much impressed with the POLITICO report and says that it relies heavily on nameless sources and former GMA staff “who are out of touch with the organization’s work in recent years or who are eager to advance their own personal agenda,” Roger Lowe, executive vice president of strategic communications at GMA, said in a statement on Sunday. “Those critics have little knowledge or interest in acknowledging GMA’s trailblazing work in transparency that gives people more information than could ever fit on a package label, its leadership on strong food safety regulations, or its work with the Obama administration – and now with the Trump administration – on health and wellness, including front-of-pack labeling.”

Lowe added: “We are proud of the results we have achieved and how these achievements serve American consumers. At the same time, we seek every year to continually improve how we serve our members and consumers.”

GMA also says it is working with Boston Consulting Group, which is an associate member of the association, to update its strategy and improve its services. This work started in 2015, but in early 2017 the project kicked up a notch to be a broader review of the association’s work. Internally, officials are calling it “GMA Reinvention.” The work is ongoing, but, according to Lowe is, “already resulting in changes such as a greater focus on identifying and addressing emerging issues facing the industry.”

In turn, POLITICO defends its reporting. It claims it “drew from plenty of current sources, including a deep bench of members and longtime industry leaders who spoke on background.”

It concludes that “frustration with GMA runs deep in DC and has for some time.”

Well, it is clear that the industry is under enormous pressure from new, well-funded products and new approaches—as well as old fights about technology and shifts in market structure. These fights are very important to producer, and should be watched closely as they proceed, Washington Insider believes.

Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products and on the News and Analysis Menu of DTN’s Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com. Subscribers of MyDTN.com should check out the US Ag Policy, US Farm Bill and DTN Ag News sections on their News Homepage.

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