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[Agriculture Fact Book 98]
When you visit the grocery store, you know you'll find an abundance and variety of top-quality produce, meats, and dairy products. If you're like most people, you probably don't give a second thought to the marketing system that brings that food from the farm to your table. Yet this state- of-the-art marketing system makes it possible to pick and choose from a variety of products, available all year around, tailored to meet the demands of today's lifestyles. Millions of people-- from growers to retailers--make this marketing system work. Buyers, traders, scientists, factory workers, transportation experts, wholesalers, distributors, retailers, advertising firms--in addition to the Nation's farmers--all help create a marketing system that is unsurpassed by any in the world. And USDA's Agricultural Marketing Service (AMS) helps make sure the U.S. marketing system remains world-class.
Wherever or whenever you shop, you expect good, uniform quality and reasonable prices for the food you purchase. AMS quality grade standards, grading, and laboratory services are voluntary tools that industry can use to help promote and communicate quality and wholesomeness to consumers. Industry pays for these services and they are voluntary, so their widespread use by industry indicates they are valuable tools in helping to market products.
USDA quality grade marks are usually seen on beef, lamb, veal, chicken, turkey, butter, and eggs. For many other products, such as fresh and processed fruits and vegetables, the grade mark isn't always visible on the retail product. In these commodities, the grading service is used by wholesalers, and the final retail packaging may not include the grade mark. However, quality grades are widely used--even if they are not prominently displayed--as a "language" among traders. They make business transactions easier whether they are local or made over long distances. Consumers, as well as those involved in the marketing of agricultural products, benefit from the independent assessment of product quality provided by AMS grade standards.
Grading is based on standards, and standards are based on measurable attributes that describe the value and utility of the product. Beef quality standards, for instance, are based on attributes such as marbling (the amount of fat interspersed with lean meat), color, firmness, texture, and age of the animal, for each grade. In turn, these factors are a good indication of tenderness, juiciness, and flavor of the meat--all characteristics important to consumers. Prime, Choice, and Select are all grades familiar to consumers of beef.
Standards for each product describe the entire range of quality for a product, and the number of grades varies by commodity. There are eight grades for beef, and three each for chickens, eggs, and turkeys. On the other hand, there are 38 grades for cotton, and more than 312 fruit, vegetable, and specialty product standards.
| Facts about
grading: From October 1997 through September 1998, USDA graded 30 percent of the shell eggs and 95 percent of the butter produced in the United States. Eighty-three billion pounds of fresh fruits and vegetables and more than 12 billion pounds of processed fruits and vegetables received a USDA grade mark. Nearly all of the meat industry requests AMS grading services: USDA grades were applied to 82 percent of all beef, 87 percent of all lambs, 22 percent of all veal and calves, 69 percent of all turkeys, and 45 percent of all chickens and other poultry marketed in this country. USDA also graded more than 98 percent of the cotton and 97 percent of the tobacco produced in the United States. |
The food testing side of the AMS program has nine “user fee” laboratories performing numerous microbiological, chemical, and physical analyses on a host of food and fiber commodities, including processed dairy products, meat, poultry, egg products, fruits, and vegetables. This testing supports AMS purchases for the National School Lunch Program and other domestic feeding programs, troop ration specifications for the Department of Defense, foreign government food contract purchases, laboratory quality control and assurance programs, and testing for aflatoxin in peanut products.
In addition to grading and laboratory services, USDA provides certification services, for a fee, that facilitate ordering and purchase of products used by large-volume buyers. Certification assures buyers that the products they purchase will meet the terms of their contracts--with respect to quality, processing, size, packaging, and delivery. If a large buyer--such as a school district, hospital, prison, or the military--orders huge volumes of a particular product such as catsup or processed turkey or chicken, it wants to be sure that the delivered product meets certain needs. Graders review and accept agricultural products to make sure they meet specifications set by private-sector purchasers. They also certify food items purchased for Federal feeding programs.
Farmers, shippers, wholesalers, and retailers across the country rely on AMS Market News for up-to-the-minute information on commodity prices and shipments. Market News helps industry make the daily critical decisions about where and when to sell. Because this information is made so widely available, farmers and those who market agricultural products are better able to compete, ensuring consumers a stable and reasonably priced food supply.
AMS Market News reporters generate approximately 700 reports each day, collected from more than 100 U.S. locations. Reports cover local, regional, national, and international markets for dairy, livestock, meat, poultry, grain, fruit, vegetables, tobacco, cotton, and specialty products. Weekly, bi-weekly, monthly, and annual reports track the longer range performance of cotton, dairy products, poultry and eggs, fruits, vegetables, specialty crops, livestock, meat, grain, floral products, feeds, wool, and tobacco. Periodically, AMS issues special reports on such commodities as olive oil, pecans, peanuts, and honey.
USDA's commodity market information in Market News is easily accessible--via newspapers, television, and radio; printed reports mailed or faxed directly to the user; telephone recorders; electronic access through the Internet; electronic mail; and direct contact with USDA reporters.
AMS serves farmers, as well as those in need of nutrition assistance, through its commodity procurement programs. By purchasing wholesome, high-quality food products, particularly when surpluses exist, AMS helps provide stable markets for producers. The Nation's food assistance programs benefit from these purchases, because these foods go to low-income individuals, families, and institutions who might otherwise be unable to afford them.
Some of the programs and groups that typically receive USDA-donated food include: children in the National School Lunch, Summer Camp, and School Breakfast Programs; Native Americans participating in the Food Distribution Program on Indian Reservations; older Americans through the Nutrition Program for the Elderly; and low-income and homeless persons through the Commodity Supplemental Food Program and the Emergency Food Assistance Program. In addition, USDA helps provide disaster relief by making emergency purchases of commodities for distribution to disaster victims.
Once USDA determines that a purchase is appropriate, AMS publicly invites bids, and makes sure that the food it purchases meets specified quality and nutrition standards. As appropriate, AMS often specifies foods be within certain ranges of fat, sugar, and salt. By policy, AMS purchases only those products that are 100 percent domestic in origin.
The U.S. food supply is one of the safest in the world, but the public is still concerned about the effects of agricultural pesticides on human health and environmental quality. The Pesticide Data Program (PDP), which is administered by AMS, provides statistically reliable information on chemical residues found on agricultural commodities such as fresh and processed fruits and vegetables, grain, and milk. PDP is a Federal-State partnership with 10 participating States using uniform procedures to collect and test these commodities. The information gained helps form the basis for conducting realistic dietary risk assessments and evaluating pesticide tolerances as required by the Food Quality Protection Act of 1996. The Environmental Protection Agency uses PDP data to address reregistration of pesticides. Other Federal agencies use the data to respond more quickly and effectively to food safety issues.
AMS also administers the Federal Pesticide Recordkeeping Program, which requires certified private applicators to keep records of their restricted use pesticide applications for a period of 2 years. These records support collection of pesticide use data to help analyze agricultural pesticide use and are used by health care professionals when treating individuals who may have been exposed to a restricted use pesticide. AMS works with State pesticide regulatory agencies and Cooperative Extension Services to provide the regulatory and educational aspects of the program.
“The Touch...the Feel of Cotton...the Fabric of Our Lives,” “Beef...It's What You Want,” “Got Milk?,” “The Incredible, Edible Egg.” If you've watched television or read magazines lately, you've probably heard or read these slogans and others for a host of agricultural commodities. All of these promotional campaigns are part of the research and promotion programs that AMS oversees.
Federal research and promotion programs, each authorized by separate legislation, are designed to improve farmers' incomes through promotion of their products. The programs are all fully funded by industry assessments. Board members are nominated by industry and appointed officially by the Secretary of Agriculture. AMS oversees the activities of the boards or councils and approves budgets, in order to assure compliance with the legislation.
Currently, there are research and promotion programs for beef, pork, cotton, dairy products, eggs, fluid milk, honey, lamb, mushrooms, potatoes, soybeans, watermelons, and popcorn.
But, while advertising is one part of these programs, product research and development is also a major focus. Wrinkle-resistant cotton and low-cholesterol, low-fat dairy products are just two examples of how these programs have benefitted consumers and expanded markets for producers.
New generic commodity promotion, research, and information legislation was enacted as part of the 1996 Farm Bill to make Federal promotion and research programs available to more commodities.
| Facts about
marketing: The national fluid milk processors promotion program teamed up with Dairy Management, Inc., to sponsor the "Got Milk?" campaign in 1998, featuring photographs of famous personalities wearing "milk mustaches." The board estimates that more than 200 million consumers have been reached by this promotion. |
Marketing agreements and orders help dairy, fruit, vegetable, and peanut producers come together to work at solving marketing problems they cannot solve individually. Marketing orders are flexible tools that can be tailored to the needs of local market conditions for producing and selling. But they are also legal instruments that have the force of law, with USDA ensuring an appropriate balance between the interests of producers looking for a fair price and consumers who expect an adequate, quality supply at a reasonable price.
Federal milk marketing orders, for example, establish minimum prices that milk handlers or dealers must pay to producers for milk, depending on how that milk will be used--whether fluid milk or cheese. Federal milk orders help build more stable marketing conditions by operating at the first level of trade, where milk leaves the farm and enters the marketing system. They are flexible in order to cope with market changes. They assure that consumers will have a steady supply of fresh milk at all times.
Marketing agreements and orders also help provide stable markets for fruit, vegetables, and specialty crops like nuts and raisins, to the benefit of producers and consumers. They help farmers produce for a market, rather than having to market whatever happens to be produced. A marketing order may help an industry smooth the flow of crops moving to market, to alleviate seasonal shortages and gluts. In addition, marketing orders help maintain the quality of produce being marketed; standardize packages or containers; and authorize advertising, research, and market development. Each program is tailored to the individual industry's marketing needs.
AMS also administers several programs that ensure fair trade practices among buyers and sellers of agricultural products.
The Perishable Agricultural Commodities Act (PACA) program promotes fair trading in the fresh and frozen fruit and vegetable industry. Through PACA, buyers and sellers are required to live up to the terms of their contracts, and procedures are available for resolving disputes outside the civil court system.
Fruit and vegetable buyers and sellers need this assurance because of the highly perishable nature of their products. Trading in produce is considerably different from trading for a car, a computer, or even grain. When a vegetable grower doesn't get paid, the product usually can't be reclaimed before it spoils--or before it has already been consumed.
Although PACA was initiated to protect producers, it benefits consumers and the entire produce industry. Over the past decade, AMS has handled nearly 40,000 PACA complaints, not just from growers, but also from grower-agents, grower-shippers, brokers, wholesalers, retailers, and processors. PACA is funded by license fees paid by industry, and the bottom line is that fair trade and resolved disputes mean that businesses of any size can operate in a better trade environment and consumers can get a wider choice of reasonably priced, high-quality fruits and vegetables.
The Federal Seed Act (FSA) protects everyone who buys seed by prohibiting false labeling and advertising of seed in interstate commerce. The FSA also complements State seed laws by prohibiting the shipment of seed containing excessive noxious weed seeds. Labels for agricultural seed must state such information as the kinds and percentage of seed in the container, percentages of foreign matter and weed seeds, germination percentage and the date tested, and the name and address of the shipper. USDA also tests seed for seed producers and seed buyers on a fee-for- service basis to determine quality.
The Plant Variety Protection Act provides patent-like protection to breeders of plants that reproduce both sexually (that is, through seeds) and through tubers. Developers of new plant varieties can apply for certificates of protection. This protection enables the breeder to market the variety exclusively for 20 years and, in so doing, creates an incentive for investment in the development of new plant varieties. Since 1970, AMS' Plant Variety Protection Office has issued more than 4,000 certificates of protection.
The Agricultural Fair Practices Act allows farmers to file complaints with USDA if a processor refuses to deal with them because they are members of a producers' bargaining or marketing association. The act makes it unlawful for handlers to coerce, intimidate, or discriminate against producers because they belong to such groups. USDA helps to institute court proceedings when farmers' rights are found to be so violated.
AMS is responsible for developing and implementing an organic certification program, which was authorized by the Organic Foods Production Act as part of the 1990 Farm Bill.
The goals of the organic certification program are to:
Under the act, a National Organic Standards Board was appointed in January 1992 to help develop standards for substances to be used in organic production.
In December 1997, USDA issued a proposed rule with a comment period that closed at the end of April 1998. USDA received about 285,000 comments on the proposal and plans to issue a new proposal for further comment.
The Wholesale and Alternative Markets program assists small, limited resource farmers in gaining access to markets. Two major areas of concentration are wholesale and collection markets, which help farmers gain access to the mass market, and farmers and public markets, which offers growers direct access to consumers.
The Wholesale and Collection Markets group conducts research related to the collection, analysis, and evaluation of data associated with wholesale and collection markets and publishes the results of these studies for use by decision makers in the agricultural community and others. Wholesale and collection markets are major outlets for crops produced by small and medium-size farmers and effective sources of fresh fruits and vegetables for major metropolitan areas of the United States.
The Farmers and/or Public Markets group conducts research related to collection, analysis, and evaluation of data associated with the development of farmers and public markets and publishes the results of these studies for use by rural and urban decision makers. Farmers and public markets could become major sources of fresh fruits and vegetables offered directly to consumers, particularly inner-city residents; support the Special Supplementary Nutrition Program for Women, Infants, and Children (WIC); and serve as a major market outlet for small agricultural producers.
The Federal-State Marketing Improvement Program (FSMIP) provides matching funds to State Departments of Agriculture or other State agencies for marketing research or marketing service projects to improve marketing systems. The aim of the program is to reduce costs or identify new market opportunities for producers, ultimately benefiting consumers through lower food costs and more food choices. Projects include research on innovative marketing techniques, taking those research findings into the marketplace to “test market” the results, and developing State expertise in providing service to marketers of agricultural products. In FY 1997, the FSMIP funded 26 projects in 22 States for 1.2 million.
| Fact about farmers
markets: USDA defines a farmers market as a group of farmers and vendors leasing or renting space in a common facility on a temporary basis, with an emphasis on the sale of fresh farm products, crafts, and other locally produced items. USDA estimates there are currently more than 2,500 farmers markets in the United States. |
An efficient transportation system allows consumers access to a wide variety of agricultural products and commodities produced beyond their own localities.
AMS, through its Transportation and Marketing Programs, conducts research on the availability and costs of transportation services for U.S. agricultural products by railroads, trucks, inland barges, and ocean-going vessels. AMS staff also provide transportation market reports and technical assistance to agricultural shippers who are marketing their products in domestic or international markets. Agricultural producers, producer groups, shippers, exporters, rural communities, carriers, and consumers benefit from the analyses, technical assistance, and information provided by AMS transportation staff.
To remain competitive in today's world, American agriculture has become more global, and AMS has striven to be a strong partner in expanding markets for U.S. agricultural products.
The AMS role in the international marketing of U.S. commodities centers on its quality grading and certification programs, which are user-funded. Grading involves determining whether a product meets a set of quality standards. Certification ensures that contract specifications have been met--in other words, that the buyer receives the product in the condition and quantity described by the terms of the contract. AMS commodity graders frequently support other USDA agencies involved in export assistance, including the Farm Service Agency and the Foreign Agricultural Service.
U.S. companies often request certification services when exporting to a country that has specific import requirements. Certification services provided by AMS help avoid rejection of shipments or delay in delivery once the product reaches its foreign destination. Delays lead to product deterioration and, ultimately, affect the image of U.S. quality. AMS’ Quality Systems Verification Program, a user-funded service for the meat industry, provides independent, third-party verification of a supplier's documented quality management system. The program was developed to promote world-class quality and to improve the international competitiveness of U.S. livestock and meat.
AMS also provides laboratory testing for exporters of domestic food commodities on a fee basis in keeping with sanitary and phytosanitary requirements of foreign countries. To date, this service has been requested by exporters of products destined for Japan, South Korea, other Pacific Rim countries, South Africa, several European Union countries, and countries of the former Soviet Union.
For selected fruits, vegetables, nuts (including peanuts), and specialty crops, the grading of imports is mandatory. For the most part, however, firms importing agricultural products into the United States use grading services voluntarily. AMS graders are also often asked to demonstrate commodity quality to foreign firms and governments.
In addition to export grading and certification services, AMS market news offices provide information on sales and prices of both imports and exports. Today, U.S. market participants can receive market information on livestock and meat from Venezuela, New Zealand, Japan, other Pacific Rim markets, Poland, Mexico, Canada, Australia, and New Zealand; information on fruits, vegetables, and ornamentals from France, Great Britain, Bulgaria, Poland, Mexico, New Zealand, Canada, Germany, Argentina, Japan, the Netherlands, Chile, and the Caribbean Basin; and information on a host of products from Ukraine, Kazakhstan, and Russia.
AMS participates in a number of international forums that aim to facilitate world agricultural trade and avoid potential trade barriers. Technical assistance has been provided to countries in Eastern and Central Europe, and elsewhere around the globe, to improve their marketing systems. With improved transportation, distribution, and marketing information systems, these countries will become better customers for U.S. food and fiber products.
Whether at home or abroad, AMS strives to help U.S. agriculture market its abundant, high- quality products. And AMS will continue to work to help U.S. agriculture market its products in growing world markets, while assuring U.S. consumers of an abundant supply of high-quality, wholesome food at reasonable prices.
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