On Wednesday, a CEO and three other industry executives were indicted for colluding to fix prices in the wholesale chicken market. The indictment alleges current and former senior executives at Pilgrim’s Pride Corporation and Claxton Poultry Farms illegally inflated prices from 2012 to 2017. Jayson Penn, Chief Executive and Roger Austin, former vice president of Pilgrim’s Pride were both charged. The president of Claxton, Mikell Fries, and vice president Scott Brady, were also indicted. Since 2016, leaders of the $65 billion U.S. chicken industry have been suspected of conspiring to fix prices, as poultry buyers sued producers.
According to Watt Global Media, the five largest companies control 61% of U.S. chicken production, with Tyson Foods Inc. accounting for 21% of that. The indictment includes Tyson Foods Inc., Pilgrim’s Pride, Claxton Poultry Farms, Sanderson Farms Inc. and Perdue Farms Inc. All five companies have denied the allegations. Producers claim that poultry prices increased over the years due to supply and demand factors such as rising domestic consumption and exports. In 2012, the U.S. Department of Agriculture began examining national wholesale prices for whole chickens, finding that they had risen 11% by the end of 2018. Prices decreased about 27% from the start of 2019 through the end of February 2020. The latest price reductions came as chicken companies expanded production to prepare for larger exports due the finalizing of new trade deals.
A 5,000 square mile conservation area in the Atlantic Ocean has been opened up to commercial fishing after being closed in 2016. The area was initially closed to protect endangered species, and some environmental groups warn that commercial fishing in the area will hasten their demise. “These are fragile and vulnerable resources, and I am concerned for their future health,” said Rip Cunningham, former chair of the New England Fishery Management Council. As commercial fisheries struggle during the coronavirus crisis, the move throws them a lifeline, allowing fishing to resume in the Northeast Canyons and Seamounts Marine National Monument. “We’re cutting regulations from highways and roadways to fish,” said President Trump.
On May 22nd, the Food and Drug Administration announced it would allow food manufacturers to make “minor” substitutions and omissions in food and beverage product labels. This practice would, under normal circumstances, be considered adulteration. However, as the coronavirus crisis has caused “unforeseen shortages or supply chain disruptions”, the FDA does not intend to object to slightly inaccurate food labels.
Substituted ingredients may not include common allergens such as eggs, milk, nuts, buckwheat, and sesame. Nonetheless, consumers and allergy awareness advocates are concerned about potential allergens being included in food and beverage products but not listed on the label. “FDA’s guidance casts doubt on whether those with food allergies can safely and confidently purchase food if labels will not provide necessary information regarding ingredients,” the non-profit Food Allergy Research & Education (FARE) group wrote in a statement. Get the full story here at The Counter, or here at Miami Herald.
One of Japan’s leading whisky experts, Mamoru Tsuchiya, says a large amount of Japanese whisky is not actually made in Japan. It’s a disconcerting revelation, considering that Japanese whisky is in high demand around the world with rare whiskies such as Yamazaki 18 Year Old commanding prices upwards of $500 a bottle. Surprisingly, Japan has few rules to define “Japanese whisky.” Japanese companies may purchase spirits in bulk from abroad, label it “Japanese whisky,” then ship it abroad again. Companies may also export aged shochu distilled from various grains to sell in America as whisky. Some “distilleries” even import whisky in bulk then bottle it under various labels.
Since the early 2000s, Japanese whisky has had an increasingly good reputation as brands like Hibiki and Yamazaki have received widespread praise. To meet demand, many distilleries were in need of additional fully aged product and began buying product in bulk abroad, leaving whisky connoisseurs scratching their heads. In response, some distilleries have begun using the term “world blend” to indicate that what’s in the bottle includes a mix of imported and domestic products. To clarify terms, Mr. Tsuchiya’s Japan Whisky Research Centre has proposed a set of rules defining “Japanese whisky.” Under the rules, distilleries using the term would be required to use only grain in their mash, ferment it with yeast, distill it in Japan, then let it age in a wood cask for at least two years.
Grocery-store shoppers paid 26 cents more per pound for fresh beef in April than they paid in March, according to the Bureau of Labor Statistics. But ranchers were paid an average of less than $100 per 100 pound for their steers, well below the five-year average of $135 per hundred pounds, according to the USDA. This combination of high consumer price and low payouts to ranchers has the Department of Justice suspicious. In April, Republican senator Chuck Grassley of Iowa along with 19 other senators and 11 states attorneys general, called for an investigation into the price fluctuations. “Something’s not right in the industry,” Grassley said.
This situation is not without precedent. One hundred years ago, the five biggest meat packers controlled 82% of the beef market. The Justice Department intervened, and by 1980 the top four meat packers controlled 36% of the market. But a wave of mergers kneecapped the increased market competition, and by 1988, four companies again controlled 70% of the fresh beef market.
While the dynamics of the fresh beef market precede the pandemic, slaughterhouse closures and increased illness among workers have magnified questions about recent price increases (as of May 15, there were 14,271 reported COVID-19 illnesses among meatpacking employees). According to Kansas State University agricultural economist Ted Schroeder, higher consumer prices are merely a result of supply and demand. Plants are running at about 50% capacity, says Schroeder, and the “bottleneck” of steers ready for slaughter but unable to be processed due to the limited workforce has decreased supply, increased demand, and lead to higher prices.
Nonetheless, ranchers filed an antitrust suit in Minneapolis federal court last year, alleging that the four biggest meatpackers (Tyson, JBS, Cargill, and National Beef) are colluding to set prices. Bill Bullard, CEO of the Ranchers-Cattlemen Action Legal Fund, which represents ranchers now being paid less for their steers, claims the four companies acted “with intent to reduce prices across the board.” The Justice Department is investigating whether the companies communicated to coordinate prices or if they were simply responding independently to each other’s actions in the marketplace.
Months ago, Michael Yates and Norman Jones filed a class action suit against Traeger Pellet Grills, claiming the company’s barbecue wood pellets consist of cheap woods flavored with oils rather than the actual wood advertised on the bag. The proposed class action in Utah district court alleges that the company sells bags of apple, cherry, pecan, mesquite and hickory wood pellets, yet the pellets themselves contain less than 1/3 of the advertised wood, consisting primarily of oak and alder wood instead. According to Traeger, the company hasn’t changed its production process in 16 years, and its advertising claim simply states that the company uses “100% natural, food-grade hardwood” with small amounts of food-grade soybean oil as a lubricant.
Traeger representatives argued that the suit proved no actual damages under Utah law nor did it prove that the consumers took any loss by paying more than the product’s real market value. On May 1, U.S. District Court Judge Bruce Jenkins dismissed the suit entirely, concluding that it was premature to bring the case to court.
This favorable judgment joins others in the history of Traeger Pellet Grills, including a suit against the Traeger family of Mt. Angel, Oregon, who started and later sold the Traeger Pellet Grills company. Members of the Traeger family went on to make and promote other pellet grills with Dansons, LLC, manufacturer of Pit Boss and Louisiana pellet grills, and Traeger Pellet Grills settled with the Traeger family over improper use of intellectual property.
When it comes to American dining, from fast food to fine dining, the face mask has become a standard part of the uniform. As federal, state, and local restrictions start to relax, dining rooms across the country are planning ways to maintain hospitality, and the mask has proven to be necessary to do so. Burger King executives are even reviewing mask designs to incorporate into the standard employee uniform.
The Inn at Little Washington, a Virginia restaurant with three Michelin stars, has ordered custom made masks in anticipation of a reopening. “People need to get out, obviously, and they don’t want to walk into an atmosphere that increases their anxiety,” said Patrick O’Connell, chef and proprietor of the restaurant.
As a result of the coronavirus, more than 1 in 5 U.S. households became food insecure by the end of April (they did not have consistent access to affordable food to maintain health). In the same month, a record 20.5 million Americans lost their jobs. As part of the effort to help struggling families, California’s Education Department requested that the U.S. Department of Agriculture make children’s parents eligible to pick up free school meals that would otherwise be provided during the school year. The USDA denied the request, claiming that they had no authority to reimburse school districts for meals given to adults.
Katie Wilson, executive director of the Urban School Food Alliance, says that school nutrition programs were established by Congress to give students meals throughout the school year and, in select low-income districts, during the summer as well. The program stipulates that students must be at least 18 years of age, and must pay full price during the school year. According to Wilson, only Congress could make changes to the program. Congress did allow the USDA to increase funding for school meal programs but denied the reimbursement for meals picked up by adults.
In response, Jessica Bartholow, a policy advocate at the Western Center on Law and Poverty, says numerous school districts are already feeding student’s families. Crystal FitzSimons, director of school programs at the Food Research and Action Center, concurs, citing school districts in Massachusetts, Michigan and New York City that already give adults meals and cover costs. Both advocates claim that the school meal programs are vital and serve different families than those served by the Supplemental Nutrition Assistance Program (SNAP). In 2019, school nutrition programs served over 2.5 billion meals and snacks between March and June, accepting more than $5 billion in reimbursement from the USDA. With schools closed and students and staff sheltering at home, lunch programs now serve only a fraction of those meals. Yet schools are using fund balances and lines of credit to keep the programs going so that families in their districts remain fed. Read more here at The Washington Post.
Love it or hate it, the American restaurant industry relies on the labor of undocumented employees. A full 10% of the industry’s workforce, more than one million U.S. restaurant workers, are undocumented. As restaurants closed due to the coronavirus, most of these employees lost their jobs, and they do not qualify for federal financial relief funds.
California Governor Gavin Newsom decided to act. On April 15, Newsom approved $125 million in funds for undocumented immigrants living in the state who were affected by the pandemic. The emergency aid, partially funded by nonprofit organizations, is expected to provide one-time $500 cash grants for individual residents and $1,000 for families. Get the full story here at the Washington City Paper or here at the Los Angeles Times (subscription required).
As part of its safe reopening requirements, the state of Washington has ordered restaurants to keep a 30-day log of all customers who have eaten on the premises. This log will include email or telephone contact information, according to requirements announced Monday by Governor Jay Inslee. Restaurants must also conduct on-premise services at 50% of their capacity before lockdown. The state’s decision seeks to mitigate transmission of the virus and facilitate contact tracing of individuals diagnosed with COVID-19 so that exposed individuals can be tested and begin to self-quarantine.
According to Inslee’s reopening strategy, restaurants must meet several other government safety requirements and prepare a written reopening and operational plan. Under Phase 2 of Inslee’s strategy, which includes restaurant dining rooms, counties with less than 75,000 people that have no reported cases of COVID-19 in the past three weeks can apply to ease their stay-at-home restrictions. As of now, restaurants outside of the eight approved counties remain confined to takeout and delivery only.
So far, restaurants in other states that have begun reopening have generally followed federal guidelines, but Washington’s strategy is unique in that it requires a written reopening and operational plan. The Washington standards also ask that seated parties only interact with one employee during their stay. Parties are capped at five members, much less than most other states’ 10-guest cap. Parties must also sit at least 6 feet apart, and condiment stations as well as buffets and bars must remain closed. Compared to reopening guidelines in other states, Washington’s strategy is especially restrictive, perhaps because Washington had the highest absolute number of confirmed cases and the highest number per capita of any state in the country before the outbreak hit New York in mid-March. .