Sep 25, 2019Gillibrand: USDA should investigate why prices paid to farmers fall short
U.S. Sen. Kirsten Gillibrand, D-N.Y., called Sept. 24 on the U.S. Department of Agriculture to investigate if fruit and vegetable farmers in New York and across the country are receiving fair prices for their produce.
While the prices of fruits and vegetables have increased for both consumers at the grocery store and for wholesale buyers, the prices that farmers receive for these same products has not kept up with these increases – and even gone down in some cases.
“Our New York farmers are facing a produce-pricing crisis. Throughout the state, fresh fruit and vegetable growers are hurting because the prices they get for their produce have stayed flat, and in some cases have even gone down, while the middlemen who move the produce from farmers to grocery stores and grocery store shoppers have seen the prices for the same produce increase,” Gillibrand, a member of the Senate Agriculture Committee., said in a news release. “Despite this, the U.S. Department of Agriculture (USDA) has not reviewed the fruit and vegetable industry in decades. We need to understand what is causing these unfair prices for our farmers, and I am calling on the USDA to complete a top-to-bottom review of the fruit and vegetable industry so that we can help New York’s farmers better price their produce and plan for their future.”
There are thousands of farms and orchards throughout New York State, and New York consistently ranks as one of the top agricultural states in the nation, the news release stated. However, data from the U.S. Bureau of Labor Statistics and National Agricultural Statistics Service shows that the prices paid to farmers for many of New York’s specialty crops – including apples, snap beans, cabbage, and broccoli – lag behand the terminal prices (the prices that the middle men who move these same crops from farms to grocery stores receive).
“Furthermore, structural changes to the fruit and vegetable industry in recent decades, such as new farming technology, nutrition science, and consumer behavior, have left farmers facing uncertainty as they feel that the market is not transparent enough to know if the price they are offered for their produce is fair,” the release said.
“The persistently low prices that farmers receive for their fruits and vegetables have led to the loss of small family farms, and in the last five years alone, New York lost 11,000 acres of vegetable production,” the release said.
Gillibrand said USDA has failed to conduct a full review of the fresh fruit and vegetable market for decades, and her push for a new study of this industry would help identify which factors contribute to unfair prices for farmers and increase transparency in the market. Gillibrand is also calling for the USDA to use new technology to improve farm sales reporting to ensure that data is updated in real time, increasing transparency for farmers and allowing them to see if the prices they receive are fair.
The full text of Senator Gillibrand’s letter to the USDA can be found here and below:
Sept. 24, 2019
The Honorable George Ervin “Sonny” Perdue III
United States Secretary of Agriculture
Department of Agriculture
1400 Independence Avenue SW
Washington, DC 20250
Dear Secretary Perdue,
I write to request that you conduct a review of the American fresh fruit and vegetable industry in order to ensure the sustainability and profitability of American fruit and vegetable producers. A systemic review of the produce industry was last conducted nearly three decades ago. That report, authored by the Secretary of Agriculture with the support of Agency staff of the Environmental Protection Agency, the Department of Health and Human Services, the Department of Commerce, the Department of Labor, and the Department of Education, served as the foundation for federal policy created to support fresh fruit and vegetable producers and meet the needs of consumers. Since then, we have seen transformational change in farming technologies, nutrition science, market structures, and consumer behavior. What has changed far less are the prices paid to specialty crop farmers at the farm gate. Persistent, low prices leading to the loss of small family farms is unsustainable and poses a risk to our food security as we rely more on the production to foreign nations leading to our current $2.1 billion dollar fruit and vegetable trade deficit.
My state of New York lost nearly 2100 farms (6 percent) from 2012 to 2017 and nearly 11,000 acres were taken out of vegetable production. A review of US Bureau of Labor Statistics and National Agriculture Statistics Service data shows that prices paid to farmers for many important NY fresh market specialty crops – apples, snap beans, cabbage, and broccoli – have lagged behind the terminal market prices. While there has been a small increase in the number of fruit and vegetable farms during this time, all of this growth has been through the addition of very small farms – less than 5 acres for vegetables and orchards less than 1 acre – many of which sell directly to consumers bypassing the wholesale market entirely.
In the last 20 years, many farmers have benefitted from powerful new tools and expanded market reporting that increased transparency and price discovery. However, the specialty crop industry has lagged behind and an incomplete understanding of structural market forces and limited pricing data has created too much uncertainty for our growers. In short, produce farmers struggle to know if the price offered for their crops is fair and plan for the years ahead. Therefore, I request that the USDA undertake a comprehensive review of the produce industry, at the farm, middle market, and retail levels with a specific emphasis on the effects of:
· Fewer buyers and brokers at the wholesale market level
· Increased concentration and consolidation in the food retail market
· Incomplete tools for timely produce price discovery
· Changes in consumer demand for new varietals and forms of processing
· Complex labor demand and uncertain agricultural visa policy
· Limited adoption of automating technologies for planting, weeding, pruning, and harvesting
· Integration of packing operations into farm businesses
· Increasing number of market orders
· Expanded food safety and recall notification requirements
· Utilization of new technologies like online auctions by large, integrated retail chains
· Increased production of organic specialty crops
For more than 150 years, the staff of US Department of Agriculture have worked to ensure that farmers have the tools they need to grow, harvest, and market their crops and supported profitable, sustainable farm operations. For more than 100 years, USDA researchers have worked to better understand human nutrition and communicate what constitutes a healthy diet to their fellow Americans. It is time that we reexamine the industry and recommit to ensuring the sustainability and profitability of fruit and vegetable growers and every American’s access to safe, affordable, health produce.
United States Senator
Statement from Tom Stenzel, President and CEO, United Fresh Produce Association in reaction to Gillibrand’s letter to Secretary Perdue regarding produce pricing.
“The fresh produce industry operates on extremely tight margins, at every stage from grower to wholesaler to retailer. Our industry is the ultimate supply-and-demand economy, and our real goal must be to increase demand for fresh fruits and vegetables. That’s the key to raising prices paid to farmers, allowing reinvestment for growth. Transparency in any supply chain is a good thing, and we always welcome USDA’s analysis of our markets. It’s important for each sector in our supply chain not to lose sight of our goal to grow fresh produce consumption, while fighting with one another over whose share of a dwindling pie is bigger.”