US Midwest drought drives up costs and concerns

By Maureen Aylward

With the drought in the US Midwest continuing, we asked our Zintro experts about the repercussions and impacts for the agricultural economy in the US and globally as food prices rise.

As the worst drought in recent history sweeps across the US, its seismic impacts are reflected in soaring prices of corn and soybean in the past few weeks not only domestically but across the globe as well, says Raghavan Sampathkuma, an expert in agribusiness and agrimarketing. “As one of the major players in global agricultural production and trade, the US has greater and far-reaching impact in three fronts: food, feed and fuel,” he says.

Sampathkuma says that as other parts of the globe, including Europe and the Black Sea region, are experiencing tormenting weather patterns affecting wheat yields, it would not be surprising to see the world witnessing another crisis similar to 2008 that caused social and political unrest in many countries. “Lower global estimates of production and trade of wheat is bound to affect the world’s poorest as most of them depend on food aid. As the US is one of the major contributors to the global food aid, it would become increasingly difficult for it to balance its commitments,” he says. “The triple A’s of food (availability, affordability and accessibility) are important for all, but extremely critical for the economically weakest sections. Food security for two-thirds of the world’s population living in the developing world will become the biggest worry for those governments forcing them to take knee-jerk policy reactions such as export bans that may further distort the global trade.”

As the drought causes a significant reduction in yield and production of corn and soybean, the key inputs for animal feed, it pushes up food prices including meat and dairy products worldwide, notes Sampathkuma. “As this troubles the consumers, it equally affects the profitability of the industry. The worst affected will be the countries that are heavily dependent on US corn. In South East Asia, Vietnam imports over a million and a half tons of corn and any increase in the prices of US corn will impact the country’s livestock sector that is growing at about 9 percent annually. China’s insatiable appetite fuelled by its growing meat consumption will only worsen the crisis as it is another major importer of US corn,” he explains.

In regions like India, the fast growing animal protein sector will be facing a huge challenge to optimize their feed costs as domestic corn prices have risen by at least 15 percent in tandem with the prices in the US, says Sampathkuma. “Soybean prices also reflect similar upward trends in the domestic markets. Being highly-sensitive to feed costs, the livestock sector will be forced to substitute cheaper grains in place of corn causing prices of ingredients such as sorghum and other coarse cereals to rise. This may prompt the Indian government to announce a blanket ban on food exports including corn to stabilize the domestic prices,” he says.

Rising corn prices are sure to push up demand for other feed stocks for producing ethanol and will cause a surge in their prices. “The intense competition between food and fuel will result in global grain prices reaching a new high and trigger interest among the speculative investors who are waiting to jump in and cash in on the crisis. However, learning from the food crisis in 2008, the world could handle the crisis-like situation better,” he says.

Donald Nordeng, an expert in risk and sustainability, says there are several impacts:

1. Immediate and future price increases for commodities: corn, soybeans. “The model for this is the ethanol debacle. Drought in Australia, Brazil, Canada or China will radically affect food prices,” Nordeng says.

2. China is now a major importer as is Indonesia. “These economies are expanding and are larger than they were in 2007 with a bigger impact on prices than in 2007,” he says.

3. India’s inability to boost grain production. “While China and India are seen as mainly rice producing countries, in fact many areas in both rely on wheat for their staple. Wheat areas are gradually being eroded by heat in the US and will impact production,” Nordeng explains.

What do you think?

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Heirloom varieties of endangered fruits and vegetables make a comeback

By Maureen Aylward

The drive behind growing many heirloom varieties of fruits and vegetables being grown in small backyard gardens and large CSAs is to save endangered fruits and vegetables from going away forever. We asked Zintro experts to tell us about their favorite non-GMO seeds or seed sources and comment on the heirloom trend among foodies and chefs.

Darrel Suderman, a food and beverage technical consultant, says that heirloom plants like vegetables, herbs, ancient grains, and microgreens are becoming the latest trend in the food industry. “Combine heirloom genetics with organic farming practices and you end up with the next powerful menu marketing tool in a restaurant near you,” says Suderman. “According the reputable Living Seed Company, the National Seed Company retained hundreds of seed varieties in 10 major groups 100 years ago; now only a couple hundred seeds are retained. But, that’s about to change as seed companies expand the availability of heirloom plan seeds.”

Suderman says that currently 75% of the global seed market is governed by 10 companies. These companies follow a business model that conserves the genetic diversity, historic preservation, bio-diversity, and soil enrichment. Some common characteristic terms include heirloom varieties and seeds, open pollination, rare seeds, seed saving techniques, ancient grains, and hybrids.

“Heirloom traditionally means that the seed variety has been bred for its desirable traits, superior taste and vigor, that is passed down from generation to generation,” explains Suderman. “But where do hybrids fit in if they do not provide a fertile seed from the parent plant? First, they must be destabilized. Stabilized or de-hybridization can take eight generations of growing it out until the plant variety is completely stabilized. The well known Early Girl tomato is an example of stabilization, but it is still sold as a hybrid.”

Open pollination is also a core term in heirloom discussion, says Suderman. “Open pollinated plan varieties are non-hybrids and originate from two open pollinated parents that will create an offspring similar to the parent plant with desired characteristics,” he says.

The Living Seed Company as well as Baker Creek Seed and Gurney’s are some of the largest heirloom seed companies. “Other companies like the Seed Saver Exchange represent another category of heirloom seed management and distribution. These companies and trade organizations tend to group heirloom seeds into four categories: family heirlooms, commercial heirlooms, created heirlooms, and mystery heirlooms,” says Suderman.

Rodrigo I Bermudez Grave de Peralta, an agribusiness consultant, says he has been fascinated with vegetables and their shapes colors flavors since he was a child growing up in south east Asia. “I would just drop seed into the soil just so see what would come out,” he remembers. He has worked in organic and conventional vegetable production on a large commercial scale and is currently a papaya farmer in Southern Mexico.

It’s important to de Peralta that people have begun to appreciate vegetables and older varieties for new tastes, colors, and textures normally found in natural food stores. “However, it is important to know that many heirloom varieties never existed in the wild and for the most part were hybrids and actively bred for their characteristics 40, 60, or even 100 years ago when the first seed companies and breeders began crop genetics,” says de Peralta. “Some are true selected varieties that great grandfathers or grandmothers identified and nurtured and passed along to the next generation, but more often than not a genetic mapping would show that certain varieties can be traced to a company or breeder of recent origin.”

de Peralta says a great deal of the wonderful flavors from heirloom vegetables is because the food does not have to travel much farther than your garden to your kitchen and can be picked at maximum ripeness. “This is when you get all the flavaniods, alkaloids, acids, and sugars are at perfection,” he says. “But often the same varieties do little for the local farmer who cannot pack more than a few items to a basket because he or she does not have the ability to make a trip into the city market.”

Farmers are increasingly becoming more productive as well as conscientious of consumers, says de Peralta, but many are faced with a harvest of quickly diminishing returns. They must choose to sell what their buyers want, a product that has legs, or products that can be stored at a premature stage to ripen so the farmer can continue to sell it.

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Climate Crisis and Economy

By Maureen Aylward

With ever more powerful storms developing and increasing, we wanted to know what potential impact weather-related events have on economies in the US, Asia, Europe. We asked our Zintro experts to comment.

Len Schneck, a finance consultant, says that just a degree or two more of sea water temperature increases the probability and strength of hurricanes, typhoons, and cyclones. Similarly, warmer air increases the probability and strength of tornadoes. “In my opinion, these are in fact a global warming effect. Obviously, affected countries are going to incur massive relief and reconstruction costs from devastating events. There are few precautions available to countries to ameliorate these problems in the short-term,” he says. “One possibility in Europe and much of Asia is a self-insurance program among neighboring countries. In that way, every country in the area shares a portion of the costs of a weather catastrophe, not solely a single country. This remedy is probably not viable for larger economies or areas and population of very large countries such as the United States, China, Russia, and India.”

Schneck says that companies can be severely impacted as well. “Of course, the first step is traditional insurance; however, a relatively new financial instrument is available, a weather derivative, which can help smooth out a company’s profit stream if certain weather events occur,” he says. “Depending on what type of weather events affect the bottom line of a company, companies can insure against too much rain, too little rain, too hot, too cold, too much snow, and so on. Casualty insurance companies need to be especially careful to share their risks of such major weather events, since actuarial tables are essentially useless for highly correlated losses like these.”

Chris Orr, a certified consulting meteorologist, says that we’re in a climate crisis because a warmer Earth is not a better Earth. “A warmer atmosphere allows larger, more powerful storms to develop, and we need to be aware that we’re not invincible,” he says. Storms like hurricanes Katrina and Irene don’t cause damage when they are on the open seas, but they affect land with one example being the recent devastating flooding in the state of Vermont. “If we choose to be proactive and have systems in place to deal with drought, flooding, hurricanes, tornadoes, blizzards, heat waves and cold snaps, then we remove the crisis part of the equation. Extreme weather happens; we just need to be prepared.”

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Aquaculture industry challenges and opportunities

By Maureen Aylward

We asked our Zintro experts about the sectors of the aquaculture industry that are seeing the most growth and the challenges and opportunities that are surfacing.

Stephen Newman, PhD, President and CEO of AquaInTech, says that the aquaculture sector is one of opportunity with an average annual growth of more than 10 percent by some estimates; there is little evidence of a slow-down. “One of the great strengths of aquaculture is that there are many species that can be farmed. As production levels peak and demand slows, there are new species waiting,” says Newman. “Several species of fish have had large production increases within the last few years with one by far outstripping all others: catfish.”

Catfish that are members of the family Pangasiidae are widely farmed in Vietnam, explains Newman. They are referred to as basa, pangassius, panga, or, in the UK, as Vietnamese river cobbler. “Pangassius species can be cultured at very high densities due to their ability to tolerate extremely low dissolved oxygen levels in the water. This fish is an excellent tasting fish that is relatively inexpensive to produce, he says. Catfish was virtually unheard of at the turn of the century with 41,000 MTs of production in 1997. Production peaked at 1.4 million MTs in 2008 and growth is projected to continue to increase for the foreseeable future.

“The largest impediments to growth at this time are trade barriers, which are the result of lobbying on the part of the domestic catfish farming industry in the US to prevent the fish from gaining a significant niche in the US market,” Newman says. The US catfish farmers have been successful in slowing the growth of this market in the US. Actions range from persuading the FDA to disallow the use of the word catfish to describe any other species except that being cultured in the US to lobbying for punitive tariffs based on what are widely held to be illegal practices (zeroing as per WTO) and ongoing attempts to smear the industry as being irresponsible due to the actions of a few farmers who persist in using chemicals that are not approved in the US. “As these issues are resolved, there could be another surge in production, quite likely to the three million MT or more per year level,” notes Newman.

Newman says that challenges in aquaculture can be seen in cultural practices in aquatic ecosystems, which are sensitive to a host of environmental variables that are inconsequential in terrestrial ecosystems. “A simple example is the level of dissolved oxygen in the water. One rarely hears of problems with oxygen levels on farms producing terrestrial animals. Disease is an ever present risk with the close proximity of animals to each other. But aquaculture combines the presence of a myriad of stressors in the aquatic environment that are added to the dynamics of production in a third world environment,” says Newman. “There is little regard for bio-security and the principals of science, which amounts to a long-term risk to stable production. It is very likely that both existing bacterial and viral pathogens as well as new pathogens will impact the industry with potentially catastrophic consequences in the years to come. This is by far the greatest risk that this industry faces.”

Not to be diminished, though, is the rapidly rising raw ingredient costs that are driving up the major cost of production and compounded feeds. “This will impact costs of production. We could see a drop in demand if farmers have to charge too much to make money. As is typical in situations like this, the price of the fish has dropped as production has increased. This forces consolidation and increases in efficiency. Typically, corporate farms are better equipped to weather the cyclic variability of businesses of this nature than are smaller subsidence or mom and pop farms,” says Newman.

Joseph Brener, PhD, an aquaculture expert and fish nutritionist, says that the sector experiencing the most growth is the farming of warm and fresh water species such as tilapia and pangasius. “A feature of these fish species is that the production cost is relatively low as a result of their ability to consume low cost feed that is produced by using significant amounts of plant material,” says Brener. “There is a growing market for these fish. Just a few years ago, the tilapia was almost unknown in Europe and the US, whereas today it is accepted as a healthy food that is low in fat and is a source of nutrients that are essential for good health, such as omega 3 fatty acids.”

Brener says that marketing the fish products is among the most significant challenges of the aquaculture industry. “One of the possibilities to overcome this challenge is to aim to a niche market, such as the organic fish market,” suggests Brener.

Scott Zimmerman, an aquaculture director, says that the aquaculture industry is seeing growth in nutrition, larviculture, and systems design. “Nutritional advances are being made in fish meal replacement, vegetable-based additives and live feeds. Hatchery systems have increased productivity through the ability to manage water quality parameters at increased stocking densities, automated grading, and higher survivability rates with the use of probiotics. Lastly, on-growing operations explore the use of submergible cages and fully automated recirculation systems. Many of these technological breakthroughs are proving cost effectiveness in comparison to existing practices,” Zimmerman says.

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Global food prices are rising. Zintro experts explain.

By  Maureen Aylward

Oxfam reports that global food prices are accelerating, a trend that will continue to add to the global food crisis. Oxfam predicts that climate change will be a contributor. Zintro experts provide their explanations for what they think is behind the rise in global food prices and if there are ways to secure the global food supply.

Marketlinks, a Mexican company that provides fresh produce to Europe, says the reasons behind global food price increases are climate change and fuel prices. “Changes in weather conditions are affecting production sites and markets,” she says. “Production sites are suffering from flooding and drought. Plagues and diseases are an increasing threat. Floods spread diseases in plants and animals. Droughts cause cattle to die and losses in harvest areas globally.”

Marketlinks says that financial and material losses for climate events imply extraordinary costs for farmers and industries; time of recovery and reduction of supply are also consequences.

Oil and gas prices increases have hit the food prices hard, says Marketlinks. “Agrochemicals are a product made from crude oil (fungicides, pesticides, herbicides). If oil prices increase, agrochemicals prices increase,” she says. Logistics, distribution, and transportation of food products around the globe have been affected by oil and gas prices. Transport prices have increased to levels that strap small farmers so they do not reach the market and may loose their harvest. “These circumstances have contributed to the bankruptcy of small farmers around the globe, affecting local distribution and supply of food products in the long term,” says Marketlinks.

sivaNPD, a food technologist, says that climate change has always been a factor for agricultural production: sometimes a good harvest, sometimes a poor harvest. He cites global market dynamics related to the politics of food. “We saw this recently when Russia suffered wheat production issues due to crop diseases,” he says. “This impacted global supply and increased in prices.”

sivaNPD says that while India has its share of food-related internal problems, such as lack of sufficient infrastructure for storage, hoarding, corruption in distribution, inefficient food grain management resulting in rot, and infestation these factors did not contribute to global food prices rising. “India does not depend on exports or imports of food grains. We have a problem of surplus, and we are unable to manage the produce,” he says. “Interestingly, when a food price increase happens, emerging economies are blamed for consumption. Food produced by emerging economies is consumed within those countries.”

Alexander Bryukhanov, a market research analyst, says that a combination of two strong trends is behind the rise of global food prices: population increase and agricultural productivity in developing countries has slowed. “Population keeps growing at unprecedented rates. Food consumption varies from country to country. And in the developed world, the population consumes tons of food per person and throws a large share of produce to waste,” he says.

In the developing world, production has slowed and this adding to food price increases. “Agricultural productivity in developed countries has slowed. In the 20th century, continuous introduction of irrigation, agricultural machines, fertilizers, genetically modified crops, new breeds of livestock and so on, helped to increase yield and productivity. Today, many of these growth accelerators have reached their limits,” says Bryukhanov. “And, agriculture in developing countries is behind modern technology; therefore, its productivity less.”

Stanley Dyrkacz, a food industry executive, thinks that the changes are driven by choices, not circumstances. “The diversion of corn towards ethanol production has had a huge impact on food prices,” he says. “The competition for land between people and farming is expanding, and with global populations exploding it becomes complicated.”

Christina Bays, a food service broker, says that climate changes and the reduction of small regional farms are two factors contributing to global food prices. The manipulation of commodity pricing in the stock markets is another. “I believe the way of the future should be reverting corporate farms back to smaller regional farms,” she says. “Neighborhood farms and cooperatives that grow what an area needs will help to reduce pollution from trucking or shipping. Local areas could create solar and water collecting abilities with smaller local farms to reverse negative impact on farms from pollution.”

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Organic industry keeps on rolling

By Maureen Aylward

The New York Times reports that with the global recession, organic farming and the organic industry is holding steady and growing. We asked our Zintro experts to comment on some reasons for this growth, especially in these tough economic times.

Carlos AgNet, an organics consultant who works in government regulation, says that supply is decades behind demand in the organics industry due to cost and complexity hurdles. “Besides consumer education driving demand, the future of farm regulation will create a more level playing field for certified organic operators,” he says. “With all producers being required to get a Food Safety or GAP certification in the near future, the regulatory cost difference between conventional and organic producers will narrow.”

Mashood Ahmed, and agro-ecologist and food safety and security expert, says that organic products are gaining market share due to a variety of reasons, such as farmer independence, better cultivation practices that allow the farmer to control input costs, and understanding the role of nature. “I have seen many farms becoming less mechanized and reverting back to the conventional plowing and harvesting techniques,” says Ahmed. “This means jobs, and I believe these shifts will keep economies moving in a balanced and rational way.”

Mayte de Groot, a specialist in the Mexican organics market, says that demand is growing faster than production. “The leaders in this space are the European countries (Germany, Switzerland, Norway, Denmark, Holland, and Belgium) in production and consumption,” she says. “But many more consumers around the world are slowly shifting consumer habits due to ecological consciousness. Organic distributors and importers in Europe need new supplies because they claim there is not enough variety of organic products available in the market for industry and retail consumption.”

de Groot says that market researchers find it difficult to get figures about organic consumption because there is no official statistical data regarding organic yield production, trade, or consumption worldwide. “In Mexico, even though there are no official statistics about organic product consumption, Mexican companies in this sector are reporting sales increases over 20 percent each year,” she says. “This means greater business for supermarkets, distributors, importers, and farmers and more variety and choices.”

Dr. Jana Bogs thinks that the organic industry is growing because of the passion behind it. “People in the organic industry are on a passionate mission to make the world a better place. Organic farmers feel good about what they grow; organic product companies feel good about what they produce; and consumers feel good about using these products. A lot of people are aware and concerned about the planet, so buying organic is helping them do something good for our environment,” she says.

“Scientific studies prove that children who are fed organic food have significantly fewer toxic chemicals in their blood. As cancer rates rise, consumers look for ways to decrease their personal toxic loads. The extra cost for organics is justified, and we are seeing consumers voting for organics with their pocketbooks.”

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There is a lot going on in aquaculture

By Maureen Aylward

We have found that Zintro has many experts who are interested in aquaculture and want to share their expertise; after all it is a new and growing field that has its challenges and opportunities. We asked our aquaculture experts about what they think are the critical issues facing the aquaculture industry today and the top solutions that are surfacing to tackle these issues. Here is what they had to say.

Stephen Newman, PhD, a well-known global expert in aquaculture, thinks that aquaculture is the last wave in the shift from hunting to an agricultural paradigm. “It is a complex practice involving hundreds of species in many different ecosystems,” says Newman. “Whether land, ocean or lake, pond, open or closed system, there are many challenges that must be overcome for aquaculture to be sustainable and ensure that humanity will reap the rewards of this source of high quality nutrients”.

Newman defines aquaculture as the cultivation of plants and animals in water, and it has been growing at a phenomenal rate for decades. It has not been without its detractors, and the path upward has not been a consistent process with different species showing significant variability. “While the overall trend is towards increased production, several factors are impacting this progress,” says Newman. He says that there are three primary issues.

  • The first is sustainability. “What this means is a source of considerable debate, but simply put, it means that the practices of today must not diminish the ability of the industry to flourish and meet an ever increasing demand in the future,” says Newman. “Practices that allow environmental damage to occur or diseases to proliferate are not consistent with long-term economic viability and are not sustainable. While there are organizations developing standards that link certification with sustainability, the truth is that what is occurring in the field is not truly sustainable.”
  • The second issue is that some non-governmental organizations (NGOs) criticize aquacultural practices by making generalizations about specific sectors and apply them to the industry as a whole. “In some instances NGOs advise buyers, and buyers may develop unrealistic expectations about the nature of the process and end products,” says Newman.
  • The third issue is disease control. “There is no sustainability without disease control, and when standards fail to adequately deal with these issues, aquaculture practices are not sustainable,” says Newman

Newman says that the solutions to these issues are linked.

Disease management programs: “Certification programs, best aquaculture practices, general accounting procedures, codes of conduct, and so on must take into account the impact of disease and actively require proactive disease management programs that consider all of the elements needed to ensure that disease is not going to impact operations,” says Newman. “China,Vietnam, andIndonesia are currently experiencing serious disease problems, even on certified farms, because of inadequate disease management programs.Thailand, on the other hand, through government programs and a concerted effort on the part of some major players in the industry, is successfully dealing with disease problems.”

Proactive disease management programs are programs must address the underlying causes of disease, not just what is fashionable or immediately relevant. “The best example of this is that companies that routinely stress animals as a common element of cultural practices experience lower survival rates and poorer overall productivity because of it,” points out Newman. “Yet, these companies fail to take the steps needed to improve culture conditions because of cost and the failure of companies that demand certified product to pay more for certified products.”

Disease is normal in any intensive agricultural process and considerable effort must go into proactively managing disease. “When and if the consumer is willing to pay a modest premium for seafood that meets the desired criteria, it will be easier for many aquaculturists to justify the costs of disease prevention programs,” says Newman.

NGOs should focus on real issues: Newman says that Some NGOs that criticize the aquaculture industry claim that the worst case scenarios represent the norm. “Many NGOs still stick to non-issues, such as the use of fish meal and oil in feeds, and try to link this to overfishing and other issues that the facts just do not support,” he says. “Some NGOs are beginning to move toward moderation and perhaps may eventually see that they have a common goal with the producers.”

Certification programs need input: “Most certification programs are flexible enough to evolve with time, provided the proper input is there,” says Newman. “Widespread understanding of the critical role that exportation of seafood plays in many government economies is needed and this will result in tighter regulatory controls that could eventually lead to true sustainability practices.”

Patrick Wood, an expert in the seafood and aquaculture industry, says that aquaculture is a relatively new endeavor in the Western hemisphere. “Getting the right risk-free species that are market successful is important,” he points out. “Salmon, shrimp (vannamei), and tilapia are now domesticated, which helps lessen dependence on external factors and creates a basis for further enhancements.”

Wood says that the major critical issues are the same for any other growth industry: money. In addition, he recognizes the following other issues:

  • Access to funding for capital expenditure, operational costs, trade finance, and seed (larvae) and feed;
  • Suitable species for aquaculture and genetic developments;
  • Disease management;
  • Routes to market; and
  • Innovation and application of new technologies.

Wood says that some potential solutions include the consolidation of businesses to develop the industry and addressing the needs of financing specific to the industry. “Market demand is happening with explosion of Southeast Asia’s middle class that has purchasing power, which includes eating seafood,” says Wood. “Prices are rising and fisheries cannot supply shortfall and capital needs to flow into the industry.”

Bill Manci, a consultant that specializes in aquaculture and fish farming projects, says that most of the fish and seafood that we directly consume today is now produced at aquaculture facilities. “Aquaculture faces some important challenges, but the most pressing are the cost of feeds, the ability to manage disease, and the availability of water and land for aquaculture production and expansion,” he says. “Aquaculture is how the majority of our fish will be produced in the future, saving wild populations from overexploitation.”

Manci points out that in many cases, feeds are the most expensive cost component in aquaculture, primarily because of raw materials costs, such as fish meal and fish oil. “Governments and private scientists are developing alternatives to fish meal and fish oil at lower cost and preparing them in facilities that are more biosecure than could ever be expected from the wild populations of fish used to produce these products,” says Manci.

Manci says that rather than fighting disease episodes with antibiotics, which can linger and potentially harm people and the environment, aquaculture managers are using probiotics (i.e., beneficial bacteria), vaccines, and benign compounds that stimulate fish immune systems. “Probiotics crowd out disease-causing organisms and promote good health. Vaccines prevent infection and immunostimulants allow fish to manage their own health,” Manci says.

“As water and land become scarcer and more valuable, aquaculturists have taken steps to make facilities smaller and more efficient,” explains Manci. “Re-circulating aquaculture systems grow fish at high densities and require less space and water to operate. Fish are reared in tanks and in water that is used, filtered to remove wastes and replenish oxygen, and then reused by the fish. In some cases, the wastewater from these systems is directed into greenhouses for the production of flavorful lettuce, tomatoes, and vegetables and flowers. This process called aquaponics is very popular and facilitates production in compact facilities near major markets, producing locally grown food.”

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What’s next for the organic industry in the US organic food and organic product areas? What are the challenges to future growth?

In 2009, total US organic sales for food and non-food products were $26.6 billion and growing. With mass market retailers increasing their offerings of organics, where might the industry be headed?

The US organic products industry has seen strong growth over the years and should expect to see continued growth, says Peter Leighton, an expert and recognized leader in the areas of consumer products, nutraceuticals, and human nutrition. “In spite of weak economic conditions, the category remains vibrant,” he explains. “There are a host of drivers that fuel this growth, but the critical component is the acceleration of scale. As demand increases for organic products, more organic inputs are allocated, thereby reducing the endpoint costs for consumers.” This, in turn, fuels greater growth.

Environmental issues are increasingly playing a strong role in that growth, notes Leighton. “More data is demonstrating the value of sustainable agricultural practices and the health and environmental benefits of natural pesticides,” he says. While to date one of the greatest consumer triggers for organic products has been the health halo of the products, increasingly the industry will see environmental and ecological triggers driving consumer action, as these have a much more significant point of differentiation.

Carlos-AgNet, an expert in organic product lines and a consultant to organic companies and certification groups, says that the saving grace for the organics industry is a decade’s old demand that has seen supply increases. “This demand is providing unprecedented opportunity for those that can develop a retail organic product,” says Carlos-AgNet. “The industry has recently seen an explosion of beverages and beauty products.”

One of the challenges that Carlos-AgNet sees for the organics industry is the certification process. “Basic standards for organic certification receive a wide interpretation within the national standard and between countries, which inhibits trade in international products, such as food and textiles,” he says. New product areas in the organics industry bring with them a new generation of standards that are difficult for producers to sort out. Instead, cosmetic and food manufacturers are choosing voluntary or non-organic standards, such as natural, to avoid having to go through the national organic standards.

“The US market is decades behind Europe in organics and agriculture transformation,” says Carlos-AgNet. “A real threat to US producers could be the replacement of US producers of agricultural products with those from more advanced agricultural economies.” He states that this shift may not affect the US organic retail market.

Dr. Jana Bogs is looking beyond organics to the next step the industry might take to increase nutrition in organic fruits and vegetables and natural ingredients. Bogs is an expert in food science, horticulture, nutrition, and agriculture.

“Several scientific studies have shown significant decreases in nutrient density in fruits and vegetables over the past half century,” Bogs says. “There is a lot more research to be done, but we currently have enough knowledge to produce significantly higher quality produce at the current time. Some producers understand how to grow beyond-organic foods, but they need a better marketing system.” She adds that food and nutrition supplement companies who are looking to capture a larger percentage of the market would do well to look into these optimally-grown foods.

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Are agrichemicals and food preservatives the culprit behind increased allergies in children today?

As a growing number of children have been developing allergies to everyday foods, experts have been exploring potential causes. One hypothesis is that the surge is tied to the increased use of agrichemicals and food preservatives. We turned to our panel offood allergy experts and asked them to share their opinions on that hypothesis. Here’s what they had to say:

PresentTenseCoaching, a holistic nutritionist with over thirty years of experience, believes that agrichemicals and preservatives are an important issue when determining the allergic reaction of a child. However, this is a problem that “can be easily remedied.” A separate issue involves genetically modified food (GMO). Part of the trouble with genetically modified food is that when a pregnant woman eats such foods, it can “easily overwhelm the immune system of the fetus.” Post partum, the child has greater chances of receiving a negative response when encountering these foods.

Murugesan Venkataram, with over 20 years of experience in research and development for plant science and plant pathology, says that the chemicals added to food to lengthen shelf life can have adverse effects on certain people. The very same “food additives used to slow the growth of fungus and bacteria, keep fats and oils from turning rancid, and prevent powdered foods from caking” can cause people to react negatively. Venkataram explains that because these negative reactions are actually chemical reactions, and therefore do not involve the immune system, they are not considered “true allergies”. Known as food intolerances, such effects can cause headaches, rashes, hives and vomiting, as well as an aggravation of eczema. Additionally, the sulfites commonly added to fruit juice, wine, dried fruit, and salads “can cause wheezing and chest tightness.” Asthmatics need to be especially careful with such foods, but Venkataram also feels that it is important for every individual to be aware of potential consequences.

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Aquaculture 2010 and Looking into the Future

Red Jamaican Hybrid Tilapia
Aquaculture is a rapidly growing business, reaching $86 billion dollars globally in 2009. Yet while China, India, and Vietnam lead the world aquaculture market in production, the United States lags considerably behind. Is the United States aquaculture market too timid and restricted to compete with international markets? Are government regulations hindering the growth of aquaculture? And perhaps most importantly, what are the best ways to maximize profits from aquaculture within these restrictions?

Greg Lutz, a professor at Louisiana State University and contributor to Aquaculture Magazine for the past 15 years, explains that individuals who promote aquaculture purely for personal gain do not fully grasp the important environmental benefits aquaculture provides. A consultant to countries across the world, Lutz understands that the advantages of aquaculture will be clearly shown in the coming decade by increasing the efficiency of conversion of feedstuffs. Through his research, Lutz has found that, “aquatic species like tilapia and catfish can convert feedstuffs from 50% to 400% more efficiently than traditional livestock such as poultry, hogs and cattle, while producing less waste and conserving soil and other natural resources.” Therefore, aquaculture offers a more economic alternative to other food items while simultaneously helping preserve the environment.

Ward Spruyt, a biochemical engineer and independent consultant for aquaculture feed mills across Latin American, Asia, Europe and the Middle East, examines growth and investment within the aquaculture industry. Spruyt’s extensive knowledge of the intricacies of aquaculture serves to illuminate various issues regarding the nature of this particular business. Understanding that success on a large scale hinges upon attracting investors, Spruyt believes that the best plan of action is a solid business plan and a wide understanding of the industry. Spruyt also notes that due to problems of population growth, the industry needs to find a sustainable way to increase production per surface unit, and to turn to the sea surface to produce food such as fish, shellfish, crustaceans, micro- and macro algae. If expanded properly, Spruyt says aquaculture “will be part of a possible solution to feeding the people” challenged by the limited carrying capacity of the planet.

Greg Lutz and Ward Spruyt offer expert advice into understanding the nature of the aquaculture industry on Zintro. It is clear from their commentary that aquaculture offers a viable solution to environmental and social problems affecting the world, and that investment in the industry will likely increase. The United States may produce fewer foodstuffs through aquaculture than other countries, but there is still opportunity for business growth.

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