Washington Insider -- Friday

USDA and Food Safety

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

USDA, CFTC Comment On Livestock Market Investigations

The Commodity Futures Trading Commission (CFTC) Ag Advisory Committee meeting by teleconference Wednesday focused on COVID-19 impacts, with the livestock market situation also discussed. USDA Secretary Sonny Perdue addressed the meeting, reminding that USDA’s cattle market investigation now includes volatility linked to the COVID-19 pandemic.

“As part of this ongoing investigation, [USDA’s] Packers and Stockyards division will determine if there's any evidence of price manipulation, collusion, restrictions on competition, or any unfair practices or unfair advantages,” Perdue commented. He said he would could not share any details of the ongoing investigation.

But USDA Senior Advisor Dudley Hoskins later said that there was no deadline for the conclusion of the investigation. He noted Perdue has been “clear he does not anticipate putting any kind of fictional or manmade timelines on how far that investigation will go or how long it will last.”

The CFTC’s Livestock Market Taskforce is also looking at the situation, and CFTC Chairman Heath Tarbert said the regulator is “putting all of our efforts into making sure that we understand during this period of immense volatility, exactly what's going on in our markets.” As part of the effort, “we are talking to the exchanges, we're talking to market participants, we're talking to the clearing houses, just to make sure that we get a sense of basically any indication that prices are moving in an uneconomic manner relative to the underlying commodity cash price,” he explained.

But he also cautioned little public information is offered on the taskforce’s efforts unless the regulator opts to “take a concrete action on the enforcement side.” As for the surveillance effort, Tarbert said, “you should know that we are doing it, but we cannot reveal the details prematurely.”

China Looking to Increase Stockpiles

More reporting on China aiming to buy more crops for state reserves. China is looking to buy more than 30 million metric tons of crops for state stockpiles in a bid to avoid supply chain disruptions from COVID-19 and to meet its pledge buy more U.S. farm commodities, according to sources quoted by Reuters.

This follows reports Wednesday from JC Intelligence on the planned purchases for state stockpiles which also made reference to current prices as a factor in the apparent decision. The country plans to add 20 million metric tons of corn, 10 mmt of soybeans and 1 mmt of cotton to state reserves, with the bulk of those purchases coming from the U.S. as China strives to meet the terms of the Phase One agreement with the U.S. The report also said the country would seek to add 1 mmt of sugar and 2 mmt of soyoil to reserves, but did not indicate the likely source for those products. No indication on timing of the buys was given, with the report saying that would “depend on how the market evolves.”

Washington Insider: USDA and Food Safety

The Hill reported recently that USDA is facing growing pressure to ensure the safety of the nation's food supply during the coronavirus outbreak. The report cited a number of experts who believe that the food supply is safe now, but that this is a period of growing challenges for the USDA as food industry workers fall sick and inspectors scramble for limited resources.

The report noted that USDA's Food Safety and Inspection Service has recalled only one product over the last two months. On Feb. 8, a product from Family Traditions Meat Company was recalled due to misbranding, it said – but focused on the fact that “there has been a sharp reduction in recalls during the period before April 10, when it recalled chicken bowls from Conagra Brands over possible foreign matter contamination and pork products from Jowett Farms for missing some inspections.”

The report noted that recalls were “flowing in regularly before February,” with five in January, four in December, four in November and three in October. And, while there were no specific signs food safety has been compromised during the pandemic, they urged vigilance and “found the gap in recalls puzzling.”

“I do think that it is unusual that there were no recalls during that time frame,” said Donald Schaffner, a professor of food microbiology at Rutgers University.

"COVID-19 has been a distraction," Schaffner added, but he cautioned that the pandemic "has probably not directly impacted food safety yet."

Benjamin Chapman, food safety extension specialist at North Carolina State University, agreed that the outbreak could be a “distraction” with people off work or at home and more resources being devoted to the immediate pandemic response.

"Since COVID-19 is such a huge focus for everyone, not just the food industry, I can see how we all might be a bit distracted from the normal day-to-day operations of the system," Chapman said. "But I would say that in the short term the distractions are likely not leading to changes in food safety."

Still, the lack of recalls comes at a troubling time as concerns about food safety grow, The Hill said. Those worries have gained attention in recent days with the closing of meat processing plants where workers have contracted the coronavirus. Pork processor Smithfield Foods closed two more plants, one in Cudahy, Wis., and one in Martin City, Mo., this week and a worker from its closed Sioux Falls, S.D., facility died. Two employees of Tyson Foods’s Columbus Junction, Iowa, pork processing plant have also died.

The coronavirus will make it harder for USDA inspectors to continue their work even at operating processing plants, the experts said. As the coronavirus outbreak intensified in the U.S. in March, the agency pledged that it would "ensure that grading and inspection personnel are available."

USDA officials wrote to stakeholders recently that it "remains committed to working closely with industry to fulfill our mission of ensuring the safety of the U.S. food supply and protecting agricultural health."

Another food safety agency, the Food and Drug Administration has also seen its resources stretched with the outbreak and scaled back some routine inspection work to protect inspectors.

USDA told The Hill that its Food Safety Inspection workers are on the front line, day in and day out, to make sure our food is safe.”

The spotlight on the agency and its work likely will intensify, particularly if more food service workers fall ill, The Hill said--and it argued that experts had not sounded any specific alarms on the nearly two-month gap in recalls, noting the many factors go into determining food recalls. However, they acknowledged the challenges facing the USDA.

Food recalls in the U.S. have become more common in recent years. The total number of recalls increased by 10 percent between 2013 and 2018, and there were 905 recalls in 2016.

“Consumers have to make sure that they’re practicing safe food handling at home, safety experts say. They recommend washing their hands and separating fresh product from raw product, minimizing their risk as much as possible.”

So, we will see. The decline in recalls is a statistic that USDA should examine closely since it could indicate growing pressures on the inspection process. And, given threats from the virus and its impacts, the decline in recalls is a development USDA should make sure consumers understand in this period of tension and uncertainty, Washington Insider believes.

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