National Feed and Grain Association has learned that FDA is planning to issue four separate sets of proposed regulations on the one-year anniversary of President Obama’s signing into law the Food Safety Modernization Act (FSMA). Those four regulations are:
(1) Preventive controls for human food
(2) Preventive controls for feed, feed ingredients, and pet food
(3) Foreign Supplier Verification Program (FSVP)
(4) Regulations requiring produce growers to implement preventive controls and product tracing systems for certain types of produce
FDA is also expected to release a “fact sheet” for each of the proposed regulations summarizing the major requirements, as well as schedule public meetings to provide opportunity for comment. Full article from NGFA.
Faegre Baker Daniels and FaegreBD Consulting will provide more analysis and guidance on the proposed rules later this week.
When last seen at the end of 2010, the controversial rules the Grain Inspection Packers and Stockyards Administration (“GIPSA”) proposed to implement significant changes in livestock markets had disappeared into the U.S. Department of Agriculture. Since that time, the proposed rules have become embroiled in – and stalled by – the debt-limit and budget-balancing wars in Congress. On December 8, 2011, GIPSA issued a final rule that rescued its rulemaking effort from this morass— but only at the cost of giving up entirely on the attempt to use this rulemaking to radically restructure livestock and poultry markets and the law governing them.
John Shively, Kim Walker and Jacob Bylund, partners in Faegre’s food and agriculture industry group, outline the journey of GIPSA to the final rule. Read more.
Leavitt Partners, Faegre & Benson LLP and B&D Consulting are joining forces to provide companies involved in the global food supply chain with a collaborative solution to food safety management. This joint effort will provide guidance for companies seeking to navigate the shifting food safety challenges of today’s systems and those required to comply with new regulations resulting from the passage of the 2011 Food and Drug Administration Food Safety Modernization Act. Read more.
Faegre and Benson’s Food Agriculture & Biofuels (“FAB”) group is sending several representatives to the Feed and Pet Food Joint Industries Conference to be held in Chicago from September 22 through September 24, and is excited to be a Gold level sponsor of this groundbreaking event.
This conference is a unique colloboration between the National Grain and Feed Association and the Pet Food Institute on issues common to both organizations.
Please watch this blog for a post-conference recap highlighting the important topics discussed at this event.
Earlier this week, plaintiffs in the eucalyptus tree case filed an amended complaint adding two new claims asserting that APHIS violated the Endangered Species Act (ESA) by granting ArborGen permits to plant its genetically modified eucalyptus trees. Significantly, this is the first time that ESA claims have been asserted within the GMO context.
The first claim alleges that APHIS failed to consult with the Fish and Wildlife Service (FWS) to ensure that planting the eucalyptus trees in accordance with the permits would not jeopardize the continued existence of any threatened or endangered species, or result in the destruction of any critical habitat. The second claim alleges that APHIS violated the ESA by considering ArborGen’s permits in isolation and failing to account for the cumulative effects of ArborGen’s “overall strategy” of introducing its eucalyptus trees throughout the southeast.
In essence, the ESA is a comprehensive act designed to ensure that federal agencies work with the FWS to assess what, if any, effects their actions will have on endangered or threatened species and habitats. If an agency determines that its actions will have such an effect, the act requires it consult with the FWS, who in turn must conduct either a biological opinion or assessment of the action.
Again, this amended complaint introduces claims under the ESA for the first time in a genetically modified crop case, and perhaps illustrate the plaintiffs’ concerns relating to the potential invasiveness of the eucalyptus trees. Follow Faegre’s FAB blog for further coverage of this ongoing litigation.
Today’s post authors are Jess R. Phelps and Rhyddid Watkins.
Last month, several environmental organizations, including the Center for Food Safety and the Center for Biological Diversity, filed suit against the Animal and Plant Health Inspection Service (APHIS) in federal court in Florida. The plaintiffs are asserting four claims alleging, in essence, that APHIS violated the National Environmental Protection Act (NEPA) and the Food, Conservation, and Energy Act of 2008 by granting permits to ArborGen to field test genetically modified eucalyptus trees without first preparing an environmental impact statement (EIS).
On May 12, 2010, APHIS granted ArborGen and affiliated paper companies permission to perform field trials of genetically modified eucalyptus trees on 28 sites across seven states. Approximately 200,000 trees are, or are scheduled to be, planted on 300 acres in Texas, Louisiana, Mississippi, Alabama, Georgia, Florida, and South Carolina.
Although eucalyptus trees are not native to the United States and generally thrive only in very warm climates, they have been commercially grown in Hawaii and Florida for some time. ArborGen’s genetic modifications, however, are intended to allow the trees to be commercially grown further north by making them tolerant of temperatures as low as freezing. The trees are also modified to sterilize the male plants to prevent unintended invasion and to lower the lignin content, making them more suitable as raw materials for paper products. Eucalyptus trees provide valuable raw materials for pulp, paper, and bio-fuels and can be harvested faster than traditional hardwoods.
These field trials mark the first time that APHIS has approved genetically modified forest trees for open testing. Critics of the field tests, including the Georgia Department of Natural Resources and Florida Exotic Pest Plant Council, have expressed concerns that the eucalyptus trees can be particularly invasive because they are known for their longevity and pollen spread, and that they can be harmful to the natural environment because of their heavy water use, flammability, and susceptibility to harmful fungi.
Despite receiving over 12,000 objections to the trials, APHIS determined ArborGen could go forward after conducting only an environmental assessment, rather than the more involved EIS. Consequently, on July 1, 2010, the plaintiffs filed suit in federal court seeking to set aside the permits and obtain an injunction preventing APHIS from allowing any of the trees to flower pending the completion of an EIS. Plaintiffs are also seeking a declaration that APHIS violated NEPA and the Food, Conservation, and Energy Act. APHIS has not yet filed an answer.
This dispute could have potentially important impacts on the regulatory approval process for genetically modified crops, particularly after the recent U.S. Supreme Court decision in Monsanto v. Geertson Seed Farms.
Today’s post authors are John P. Mandler , Jess R. Phelps, and Rhyddid Watkins.
On August 5, 2010, the Senate unanimously passed the Healthy, Hunger-Free Kids Act (S. 3307). The bill’s passage, coming just before the August recess and the current extension of the child nutrition programs set to expire in September, has been praised by First Lady Michelle Obama, the U.S. Department of Agriculture and child and health advocate groups.
The bill is intended to help combat child hunger and childhood obesity by authorizing the USDA to implement nutritional standards for all foods sold in schools (including in vending machines), allocating $4.5 billion over 10 years to reauthorize child nutrition programs, and increasing the reimbursement rate for school lunches for the first time in over 30 years. The bill also calls for the Department of Health and Human Services to provide training and technical assistance to states to teach children about nutrition and wellness habits generally.
A companion bill in the House (H.R. 5504) was approved by the House Education Committee earlier this month, but has not yet been sent for a full vote. In contrast to the Senate bill, for which available funding has been identified, the House bill allocates $8 billion over 10 years with only $1 billion identified so far. Although both bills seek to increase the accessibility of subsidized school lunches and provide children up to three daily meals, the House bill is more expansive as it regulates any food sold in schools at any time, not just during school hours as in the Senate bill.
The bills could have a significant impact on the types and amount of foods available to children at schools. Because the bills are so different, it is difficult to know how an eventual law will affect the food industry.
Faegre will continue to track the bills’ progress through Congress and provide timely updates.
Today’s post is authored by Peter Goss. Pete is a partner with Faegre & Benson and tries mass-tort, toxic exposure and complex commercial disputes, and focuses his practice on defending product liability claims against medical manufacturers. Peter has served on trial teams for Solvay Pharmaceuticals, Pfizer and Sorin CarboMedics and has won dismissals for clients such as DuPont, Roche, Wyeth and Johnson & Johnson. The Legal 500 describes him as a “seasoned litigator providing solid trial experience and guidance.”
On August 4, 2010, the Senate Agriculture, Nutrition and Forestry Committee approved the Livestock Mandatory Price Reporting Act (S.3656) by voice vote. The Senate Ag Committee’s approval came just a week after the House Ag Committee approved its version of the bill (H.R. 5852) and only one day after it was introduced.
The bipartisan bills are set to reauthorize the Agricultural Marketing Act of 1946, which expires in September, for another five years. Additionally, the bills will expand the mandatory reporting of information on pricing, contracting and supply and demand of livestock and meat producers to wholesale pork cuts and dairy products. The bills also instruct the Secretary of Agriculture to establish an electronic price reporting system within one year, but leaves the all-milk price reporting system unchanged.
Now that the bills have been approved by the House and Senate Agriculture Committees, they will be sent to their respective Congressional chamber for consideration.
Our team will be following the case and will offer legal analysis at a later date.
Today’s post author is Rhyddid Watkins. Rhyddid Watkins is a member of the Faegre & Benson litigation practice. Prior to joining the firm, Rhyddid served as a judicial intern for the United States Bankruptcy Court for the Southern District of Texas and the U.S. District Court for the Southern District of Texas. He also was a volunteer law clerk for the American Civil Liberties Union.
Today’s post is authored by Mark J. Carpenter and Craig S. Coleman.
The Department of Justice and Department of Agriculture held the third in a series of public workshops exploring competition, market concentration, and antitrust issues in agriculture on June 25 in at the University of Wisconsin-Madison.
The opening panel, which included Sen. Herb Kohl, Sen. Russ Feingold, Secretary of Agriculture Tom Vilsack, Assistant Attorney General for Antitrust Christine Varney, and Wisconsin Gov. Jim Doyle, presented a united front regarding concern for dairy farmers and a commitment to investigate and remedy antitrust concerns.
Feingold focused on the increasing spread between retail prices for milk and the prices farmers receive. Both Vilsack and Varney acknowledged the impact that falling milk prices have had on farmers—faulting those falling prices for the steep decline in the number of dairy farmers over the last ten years. Kohl stated that competitive markets are essential for preservation of the dairy industry and indicated that legislation will be considered if the agencies’ enforcement efforts prove insufficient.
Varney summed up the tenor of the panel by stating, “We are keeping a watchful eye on this industry.”
Goals Include Improved Price Stability, PSA Enforcement
In terms of concrete measures by the agencies, Vilsack referred to the recent increased staffing and activity of the USDA Dairy Industry Advisory Committee, which is studying pricing volatility in the dairy industry. He indicated that the committee is seeking a consensus approach to improving price stability for dairy farmers.
Additionally, Varney again touted the formation of a joint task force between DOJ and the USDA. While details of the task force were not discussed, she indicated that it would include a focus on enforcement of the Packers and Stockyards Act. Varney also indicated that DOJ continues to investigate pricing issues in the dairy industry. She stated that DOJ has dedicated attorneys to investigating the dairy industry. In chairing subsequent panels, other DOJ attorneys made it clear that they have been actively studying pricing mechanisms for the dairy industry.
Consolidation and Pricing Transparency Dominant Topics of Workshop
Two general topics dominated discussion during the opening panel and throughout the workshop: 1) consolidation throughout the dairy supply chain; and 2) pricing transparency and the possibility of price manipulation through the Chicago Mercantile Exchange.
Consolidation in the Dairy Industry
The workshop discussed consolidation at every level of the supply chain. By suing Dean Foods to unwind its acquisition of milk processing plants in Wisconsin, DOJ has taken the position that consolidation of milk processors has created anticompetitive effects in some geographic markets. According to many panelists, including famers, academics, and government officials, declining processing options have undermined the ability of farmers to obtain competitive bids for milk, particularly milk sold for fluid milk.
Kohl blamed consolidation by processors for steep declines in the prices farmers receive for milk. “Consolidation means we need strong antitrust enforcement now more than ever.” That sentiment was echoed by many during the workshop.
Panels also discussed consolidation by farmer cooperatives, retailers, and farms. Stating that the DOJ has a “pro-farmer agenda,” Varney echoed others on the opening panel in emphasizing the agency is not opposed to cooperatives and believes they often are pro-competitive.
Nonetheless, other panels examined whether consolidation of cooperatives has limited farmer choices. Representatives from Land O’Lakes and Dairy Farmers of America explained the need for large cooperatives given the increasing scale of retailers. On the other hand, some producers and representatives of smaller cooperatives faulted increasing concentration of cooperatives for diminishing the bargaining power of farmers in some markets.
Varney indicated the DOJ will block mergers that “substantially limit competition.” “Big is not necessarily bad,” she said, but market participants will have to adhere to the pro-competitive rules of the Supreme Court.
Pricing Transparency
Both Feingold and Kohl expressed concern about the Chicago Mercantile Exchange’s use of the spot cheddar cheese market as a pricing reference price for milk. That concern was reiterated throughout the workshop, with many panelists nothing that it is a thinly traded market that may be conducive to manipulation. While DOJ did not allege price manipulation, it is apparent the issue is being examined.
The workshop, including the opening panel, indicated near consensus that milk pricing should be reformed to diminish the impact of the spot cheddar cheese market.
Alternative proposals were diverse, however. Stephen Obie of the Commodities Futures Trading Commission noted that a bill currently pending in Congress would give the CFTC greater enforcement and investigative power. Several panelists, including Kohl, advocated for more price reporting of milk prices in one form or another.
Final 2010 Workshops to Focus on Livestock Industry, Price Margins
USDA and DOJ have two more workshops scheduled for 2010.
The next workshop, focusing on the livestock industry, will take place in August in Fort Collins, Colorado. The final workshop is scheduled for December and will focus on price margins.
Faegre & Benson will continue to attend and monitor the workshops and other activities related to competition and antitrust in the agricultural industry that are occurring throughout the country, such as recently released USDA proposed regulations that affect the livestock industry and enforcement of the Packers and Stockyards Act.
The joint public workshops, conducted by USDA and the Department of Justice, continue this Friday in Madison, Wisconsin. The focus of this third workshop is the dairy industry, and the schedule indicates that it will be a packed day of testimony from dairy farmers, government officials, and academic and industry representatives.
Craig Coleman from the firm’s Antitrust Group will be joining me in Madison. We’ll be there to monitor the event and will provide an update early next week on the key points and statements of interest.
Friday’s topics should include market consolidation, current industry trends, issues of concern to farmers, and market transparency.
For More Information and Remaining Workshop Schedule
Today’s post author, Mark Carpenter, is a member of the Faegre & Benson litigation practice and focuses primarily on food and agribusiness matters. In the fall of 2003, Mark tried a complex, 5½-week dairy production case in Winona, Minnesota, involving issues of cattle genetics and dairy health and nutrition. From 2001 through 2004, he served as lead defense counsel in crop damage litigation in Florida comprising 15 separate cases. The litigation settled in March 2004, shortly after the client obtained favorable rulings from the court on various pretrial motions. Since 1997, Mark has obtained summary judgment, dismissal, or trial defense verdict in 20 cases as first-chair lawyer. Currently, Mark is defending a proposed national class action in Louisiana involving dairy cattle feed.