NASDA News

January 23, 2007, Issue XV, Number 3

A publication of the National Association of State Departments of Agriculture
1156 15th Street, N.W., Suite 1020
Washington, D.C. 20005
202-296-9680
fax 202-296-9686
nasda@nasda.org

STRICKLAND APPOINTS OHIO AGRICULTURE DIRECTOR

NASDA HIGHLIGHTS FARM BILL RECOMMENDATIONS--INCREASE SUPPORT FOR SPECIALTY CROPS

SENATE REVIEWS 2007 FARM BILL CONSERVATION PROGRAMS

State News--FITCH NAMED TO HEAD ARK. LIVESTOCK AND POULTRY COMMISSION

State News--UNDER-SERVED CONSUMER MARKETS IDENTIFIED IN NEW REPORT: YOUNG FAMILIES, HISPANICS, AND LOW-INCOME TARGETED

_________________________________________________________

Past Issues

What's New on the NASDA Website

NASDA's Midyear Meeting

Interstate Meat Sales

Specialty Crop website

American Food Fair

Model Food Emergency Response Plan Template

Tri-national Accord

State Environmental Guides

All policy amendments to be considered at the Midyear Meeting, Feb. 7 to 12, are due in the NASDA office by January 25, 2007. Electronic copies please!

STRICKLAND APPOINTS OHIO AGRICULTURE DIRECTOR

      Ohio Governor Ted Strickland and Transition Chair Columbus Mayor Michael Coleman announced the appointment of Robert Boggs as director for the Ohio Department of Agriculture. Boggs will take office on January 24.
      "Robert's years of service in the public sector--particularly his efforts on behalf of Ohio's farmers--have prepared him to be director of the Ohio Department of Agriculture," Strickland said. "I look forward to working with Robert, especially through our efforts to make Ohio a leader in next generation energy and in our work to protect and promote Ohio's crucial agricultural industry."
      Boggs, a former state legislator, school teacher and coach, served as an Ashtabula County Commissioner since 1997. His accomplishments include helping to retain and create more than 10,000 jobs and along with working to construct and acquire more than 100 miles of new water and sewer lines. He also served as the president of the County Commissioners Association of Ohio.
      From 1973 to 1997 Boggs was both a state representative in the 97th House District and a state senator in the 18th Senate District. During his time in the state legislature he authored and cosponsored numerous bills pertaining to Lake Erie development, water quality, inter-modal transportation, economic development, education, and natural resources.
      "As a lifelong public servant I look forward to being part of Governor Strickland's plan to boost our agricultural economy by making next generation energy including farm product-based alternative fuel sources, a priority in his energy policy," Boggs said.
      Boggs received his bachelor's degree in government from American University in Washington, D.C., and a master's in public administration from Kent State University. (Contact: Rick Kirchhoff)

NASDA HIGHLIGHTS FARM BILL RECOMMENDATIONS--INCREASE SUPPORT FOR SPECIALTY CROPS

      This week, NASDA highlights its farm bill recommendations on support for specialty crops. The specialty crop industry annually accounts for more than $53 billion in cash receipts--close to 54% of the total cash receipts for crops. The specialty crop industry is more likely to be impacted by pests, disease, low prices, labor shortages, and lack of funding for research, promotion, and inspection than other commodities. In addition, increased consumption of specialty crops is an important component in the national efforts to reduce obesity, increase the nutritional value of the school lunch program, promote 5-A-Day, and strengthen the Farmers' Market Nutrition Programs.
      NASDA supports funding of a specialty crops block grant program. While NASDA recognizes that federal funding is limited, it believes funding for a specialty crops block grant program should not negatively impact current funding for other commodity programs.
      Key recommended actions include:
      * Congress should amend the current authorization and provide mandatory funding for a specialty crops block grant program in the 2007 farm bill that provides each state a base grant of $2 million. Of that amount, a state could expend $500,000 for the general promotion of agriculture and the education of consumers. Beyond the base amount, each state should receive an amount that represents the proportion of the value of specialty crop production in the state in relation to the national value of specialty crop production using the latest available specialty crop production data set in all states, and eliminate caps on state allocations.
      * Due to the nature of high value specialty crop production, many current farm bill programs and disaster programs are of limited benefit to specialty crop producers due to payment caps, limits on Adjusted Gross Income, and limits on off-farm income--even off-farm income integral to farming operations. USDA should be directed to conduct a thorough review of all farm programs to ensure that specialty crop producers have access to benefits comparable to other farmers rather than be excluded or limited simply due to a higher cost of production.
      NASDA released its 2007 farm bill recommendations in November 2006. State agriculture officials finalized the document at NASDA's annual meeting in September 2006. NASDA's recommendations offer broad, opportunity-based agricultural policy focusing on expanding and improving the safety net for farmers and ranchers.
      NASDA plans to present highlights each week in NASDA News in preparation for NASDA's Midyear Legislative Conference in Washington, D.C., February 7 to 12, 2007, and as Congress gears up its work on the 2007 farm bill. NASDA's recommendations and a summary of highlights are posted on the NASDA website under "Hot Issues." (Contact: Jennifer Yezak)

SENATE REVIEWS 2007 FARM BILL CONSERVATION PROGRAMS

      The Senate Agriculture Committee held a hearing on January 17 to review the Conservation Security Program (CSP) and the Environmental Quality Incentives Program (EQIP) pertaining to conservation problems on working lands. Committee Chairman Tom Harkin (D-Iowa) said the intent of holding the hearing was to determine how Congress could revamp the conservation programs for the 2007 farm bill. Another objective of the hearing was to assess if the National Resources and Conservation Service's (NRCS) handling of the programs was in accordance with its mandate under the 2002 farm bill.
      NRCS Chief Arlen Lancaster testified that the CSP program was being implemented as intended. Some lawmakers expressed concern that funds were unfairly being given to farmers who have already been implementing conservation practices and not to those who desired to participate in the program. Lancaster said that NRCS provides money based on farmers' conservation practices, as required by CSP and the agency. Harkin disagreed with Lancaster and said the goal of establishing a tiered program was to provide an incentive to all farmers to be involved and not just those who are already implementing the programs. In addition, Lancaster mentioned that Congress capped the program and Sen. Harkin said that CSP was originally envisioned as an uncapped program. When asked how much it would cost to remove all of the caps, Lancaster responded that it would be around $9 billion. Sen. Harkin believes this is an inflated number and said the real expense would be 'one-ninth' of that. In FY06 the CSP was allocated $259 million.
      Lisa Shanes testified for the Government Accounting Office (GAO) and was critical about how NRCS is allocating funds for EQIP. She noted there were some problems with payment duplications to farmers under both programs. She suggested an automated application process for all of its conversation programs to alleviate the duplication issue. Lancaster agreed and said the program just completed a pilot program dealing with duplication of payments and the initial results were positive.
      Witnesses from agricultural and conservation organizations expressed concern about how CSP is implemented, but noted the success of EQIP. They believe that NRCS needs to improve its application process and the application backlog.
      Finally, biofuels were mentioned regarding biomass crops like switch grass or bluestem being grown on CRP acres while still meeting expectations of intended CRP goals. Harkin said that there would be a strong relationship between the biofuels industry and conservation in the farm bill. (Contact: Blake Patton or Charlie Ingram)

STATE NEWS

FITCH NAMED TO HEAD ARK. LIVESTOCK AND POULTRY COMMISSION

      Governor Mike Beebe has named Jon Fitch of Hindsville, Ark., as the new director of the Arkansas Livestock and Poultry Commission.
      "Jon Fitch has dedicated his professional life to two causes: agriculture and public service," Beebe said. "He has the experience in both the halls of state government and the fields of his family farm to serve our state and this department well."
      Fitch was elected to the Arkansas House of Representatives in 1979. He remained there until his election to the Arkansas Senate in 1985, where he served until 2002. For 18 years, Fitch was a member of the Agriculture and Economic Development Committee and handled numerous bills concerning livestock and poultry while in the legislature. He currently operates a farm and cattle operation in Madison County near Hindsville.
      The Arkansas Legislature established the Livestock and Poultry Commission in 1963. The first man appointed to lead that department was Rolla Fitch, Jon Fitch's father. (Contact: Matt DeCample, 501/683-6414)

UNDER-SERVED CONSUMER MARKETS IDENTIFIED IN NEW REPORT: YOUNG FAMILIES, HISPANICS, AND LOW-INCOME TARGETED

      Oregon agriculture may have opportunities to meet the marketplace demand of three fast-growing consumer segments in the United States. A recent report on trends involving consumer packaged goods identifies families with young children, the Hispanic population, and lower-income households as under-served markets holding the most potential for high growth at this time. Oregon's diverse agricultural production and food processing capability can provide consumer packaged goods that help fill the needs of all three groups.
      "This report is very important and instructive for Oregon agriculture, the food processing industry, and retailers," says Dalton Hobbs, assistant director with the Oregon Department of Agriculture. "This information may point the way for new strategies and new product ideas. Our industry has always been innovative in ways of addressing and meeting consumer needs."
      The report on emerging consumer segments was issued last month by Information Resources, Inc. (IRI) of Chicago, and is intended to provide detailed analysis to manufacturers and retailers of consumer packaged products. Much of what Oregon agriculture produces ends up, in some form, as a packaged product on the grocery shelf. Therefore, the report's findings may help local growers and processors discover areas of opportunity and potential.
      "We produce a wide range of products in Oregon, and many would fit very nicely within the consumer groups identified in the IRI report," says Hobbs.
      The first consumer segment identified in the report as an emerging critical target is families with young children. These households are among the biggest consumers of packaged products, and their numbers are increasing. The report identifies several characteristics of this segment, among them:
      * Fewer trips to the store are taken, but more spending per trip takes place than other groups.
      * Explosive growth is taking place in the purchase of healthier food products.
      * Convenience foods are very important.
      * Self-indulgent products are often forsaken. Many of the report's findings with this segment seem logical. Families with young children normally don't have much time to break away for grocery shopping, given the demands at home. The report says these families balance the need for fewer trips with higher per trip spending. These households spend 24 percent more per trip than the average for all consumers. The issue of child obesity is causing great interest and demand for food products that are "better-for-you", according to the report. This consumer segment also focuses on the nurturing of the younger family members, meaning the caretakers, or parents in most cases, are often overlooked. Such "self-indulgent" categories as beer and coffee aren't purchased as often by families with young children compared to other consumer segments.
      There is also the continued trend towards convenience foods. "There is an opportunity for Oregon producers and processors to provide more products that are shelf-stable, easy to prepare, and less time consuming," says Hobbs. "Getting the meal on the table for everyone to eat is always a concern for families with young children."
      The second consumer segment identified in the IRI report is the Hispanic population, which represents the fastest growing ethnic group in the U.S. as well as Oregon. Highlights in the report for this segment include:
      * A preference for mass, club, and dollar store channels.
      * Importance of store location, as one in four Hispanics walk or take public transportation.
      * A preference for distinct product attributes such as crunchy, spicy, cheesy, and savory.
      The latest set of statistics from the U.S. Census Bureau estimates there are some 360,000 Hispanic Oregonians- nearly 10 percent of the state's population. This group has an estimated buying power of $2.6 billion in Oregon, eighth highest of all states. Some local processors and retailers are taking notice.
      "Many processors have looked at how they can retool existing product lines or make new products that address the needs of Hispanics," says Hobbs. "We are also seeing grocery stores with an increasing number of products targeted towards the Hispanic community."
      The third consumer segment listed in the report is lower-income households. Among the characteristics for this group highlighted in the report are:
      Value is the dominant driver in purchasing consumer packaged products.
      More individuals in this segment shop at large retailers like Wal-Mart than the average consumer, and fewer individuals shop at so-called grocery stores than the average consumer.
      * More frequent trips to the store, but less spending per trip takes place than other groups.
      * A preference for products that are not necessarily brand names, and therefore often cheaper.
      * This consumer segment is most concerned with just "getting-by", according to the report, and looks for products that meet the basic needs.
      "Oregon needs to serve a wide range of end-users," says Hobbs. "In some cases, that means super premium, ultra-niche products sold at upscale markets. In other cases, it means products for mass retailers. Savvy marketers and food processors are looking at the entire range of consumer segments to find strategies and products that fit. They can make money throughout the spectrum of the consuming public."
      Oregon is often known for providing high-end niche products that command a good price. However, the IRI study suggests it is important to look at all consumer segments for opportunity.
      For more information, contact Dalton Hobbs at 503/872-6600 or Bruce Pokarney at 503/986-4559.