Washington Insider-- Monday

Defining Healthy is Difficult

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

Georgia Premium Poultry Price Index Unveiled

Viable price discovery data for all those involved in production, processing, selling and purchasing poultry products is the goal of the new Georgia Premium Poultry Price Index (GPPPI) developed by the Georgia Department of Agriculture (GDA).

"As the poultry industry has evolved and adapted to changing production techniques, buying practices and a general increase in demand for the product, the GDA must do the same," the agency said. "The GPPPI will include a series of producer price indexes meant to measure the aggregate change in the price of poultry sold on contract over three periods of time. In conjunction, the GDA will report a percent change of sales volume for premium poultry on contract to indicate the weekly change in demand."

The GPPPI will utilize the methodology behind Fisher's Ideal Price Index formula, GDA said, and three producer price indexes will be reported measuring changes in prices at one month, six month and twelve month base periods." Under the voluntary structure, poultry producers every Tuesday will submit information representative of poultry processed in Georgia and sold on contract during the prior week. GDA said that information will incorporate a complete list of quantities in pounds and price in cents of all sales of poultry on contract for the prior week.

GDA will then use this information to produce "a weighted geometric mean price and a total volume of pounds sold. The weighted geometric mean price and total sale volume collected from each company will be used to calculate the three price indexes to be reported each Wednesday." Those indices will measure the aggregate change in prices over each of the prescribed periods.

"By measuring the change in price rather than the price itself, the model is able to reflect a greater variability of products," GDA said in unveiling the index. "The model measures the proportional change in price and combines that with the proportional change in price of all other companies resulting in an accurate reflection of the change in poultry prices over the given periods of time."

Commonly produced products used in the index include whole bird, boneless skinless breast, bone in breast, wings and leg quarters among others, however GDA said further-processed products such as marinated product should not be included. "By limiting the reporting specifically to products that are chicken only, the indexes will not be impacted by increases and decreases in input prices that are not directly related to the production of poultry," the agency said.

GPPPI will provide a "useful tool for the poultry marketplace and removes any independent discretion on the reported price for poultry," GDA said, noting it will allow producers, processors, sellers and buyers the opportunity to track their specific products and how those products are priced in relation to the industry aggregate index.

Value of US Ag Exports, Imports Up in Nov. vs. Oct.

U.S. agricultural exports were valued at $14.265 billion in November, up from October, while imports rose to $9.7 billion for a trade surplus of $4.564 billion, according to USDA's Agricultural Trade Update.

The value of exports rose for a second month along with imports, though the value of imports increased slightly more compared to October to trim the November agricultural trade surplus from the October mark.

The $14.265 billion in exports is the largest monthly figure since November 2014 when they were valued at $14.694 billion. The value of agricultural imports for the month was the highest since $9.865 billion in May 2016. The agricultural trade surplus was the highest since the trade black ink stood at $5.876 billion in November 2014.

The value of U.S. agricultural exports the first two months of Fiscal 2017 stands at $28.505 billion against imports valued at $19.104 billion for a surplus of $9.401 billion. Those figures compare to levels the first two months of Fiscal 2016 of exports at $25.014 billion against imports of $18.012 billion for a trade surplus of $7.002 billion.

Washington Insider: Defining Healthy is Difficult

There is apparently a belief afoot among federal agencies that the opaque becomes clear if you allow the public to comment. For example, Food Safety News says that the Food and Drug Administration (FDA) will allow “more time for comments on ‘healthy’ food labels and how they the FDA to define 'healthy' for use on food labels."

For example, the Grocery Manufacturers of America asked that the Jan. 26 deadline be extended to March 26, citing year-end activities and holiday scheduling as part of the reason it needed more than four months to develop and submit comments.

Another food industry group, the United Egg Producers, was able to make the original deadline with its comments on what the word “healthy” mean. They apparently just want it to include them, FSN says. Currently eggs cannot be labeled as “healthy” because of their cholesterol and saturated fat content. But the egg group, which says it represents producers of 95% of U.S. shell eggs, contends federal dietary guidelines support the “healthy” value of their product.

“Eggs are included in all three model diets outlined in the 2015-2020 Dietary Guidelines for Americans,” the egg group reminded FDA in its comments.

The United Egg Producers and the Grocery Manufacturers Association are just two of the more than 700 entities and individuals to file comments on the topic of “healthy” as of Thursday. The vast majority of comments appear to be from individuals, many of whom have suggested common sense definitions, such as “healthy should mean it’s good for your body.”

That’s the kind of definition FDA wants to make sure is not used, FSN says. The agency wants to put a finer point on it, partly because of push back from the food industry on existing federal law concerning the use of the word “healthy” on food labels.

FSN also notes that in its initial September 2016 notice on the use of “healthy” on food labels, the FDA referenced that a “citizen petition” filed with the agency was part of the reason behind opening the discussion. What FDA did not explain in that notice was that the “citizen petition” as filed by granola bar maker KIND LLC of New York. The 31-page petition from KIND, followed a March 2015 warning from FDA that challenged label language then used on several of KIND’s fruit and grain bars.

KIND’s warning letter that said, “... the product labels bear nutrient content claims, but the products do not meet the requirements to make such claims.” FDA noted that four different flavors of KIND bars carried the word “healthy” on their labels in violation of federal law. The saturated fat content of the KIND bars ranged from double to four times the maximum amount allowed on foods that use the word “healthy” on labeling.

Thirteen months after sending the warning letter, the FDA sent KIND LLC a closeout letter in April 2016. “Based on our evaluation, we conclude that you have satisfactorily addressed the violations contained in the Warning Letter. Future FDA inspections and regulatory activities will further assess the adequacy and sustainability of these corrections,” the FDA stated in the closeout letter.

While the “healthy” debate regarding those specific KIND bars appears to be ended, the process of redefining the word will likely take years.

“Today, these regulations still require that the majority of foods featuring a ‘healthy’ nutrient content claim meet ‘low fat’ and ‘low saturated fat’ standards regardless of their nutrient density. This is despite the fact that current science no longer supports those standards. KIND thinks that FDA has taken an overly broad approach that effectively prohibits the use of terms such as ‘healthy’ about certain foods that inherently do not meet FDA’s strict nutrient content claim requirements, even though ‘healthy’ claims could be readily used in a way that is not misleading to consumers.”

The agency seemed to agree with some points in the KIND petition, stating in September 2016 that it was seeking comment on use of the word “healthy” as part of its efforts to update regulations.

“This action is consistent with our recently released 2016-2025 Foods and Veterinary Medicine Program’s strategic plan with specific goals,” FDA’s September notice stated.

We’ll see. The food agencies tend to be skeptical about use of words that many believe can only be defined negatively. Still, the industry demands them and likely will continue to do so. So, this battle of PR images likely will continue, in spite of skeptics and should be watched closely by producers, 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.

If you have questions for DTN Washington Insider, please email edit@dtn.com