The Agribusiness World Today

Ken Shwedel
Investigador de Agronegocios, Rabobank, México
March 31 - April 4, 2008

The World

Carbon – free sugar: Increasingly we are seeing companies reacting to consumers’ concerns about the environment. Food companies are adjusting their product lines to offer consumers ecologically friendly choices, while at the same time using this to enhance their standing in the marketplace as ecologically concerned businesses. Now another sugar company, Florida Crystals, has joined the bandwagon. They will launch a product that is “organic and natural” in the U.S., whose “carbon footprint was rendered neutral through methods that cut greenhouse gas emissions.” Carbondfund.org will certify the sugar as “carbon – free”. They are able to do so since Florida Crystals “is using its renewable energy to offset carbon output.” What Florida Crystals is doing, of course, is attempting to turn what is essentially a commodity into a differentiated branded product. Florida Crystals is saying that they hope that this will “increase the brand’s profile nationwide and win it more retailers.” We expect that we’ll be seeing more companies adopting similar product differentiation strategies into the near future.

Reading the labels: While most processed and packaged food products, by law or regulation, carries labels that inform the consumer of the ingredients, and provide nutritional information. The interesting question is whether or not consumers actually read the labels. According to research by the Hartman Group, in the U.S. it seems that consumers are now “increasingly turning to the information on their food labels amid the growing incidence of food safety scares”. As consumers are increasing looking at labels, it seems that they also want additional information. According to the research, for example, 60 percent say it is somewhat or very important to know from where the food, including ingredients, came. What this entire means, of course, is that companies should pay attention to the information they give consumers, and how they position it on the label. It also means that if the food industry doesn’t willingly put the information that consumers want, they can expect that regulatory authorities will make it obligatory.

Mexico

Update on cattle: Last week we referred to efforts by U.S. Border States to ban Canadian breeding cattle bound for Mexico from using export facilities. This was done in order to protest Mexico’s decision to accept Canadian breeding cattle while continuing not to accept U.S. breeding cattle. Now the three NAFTA countries have agreed to “harmonize trade…to World Organization for Animal Health (OIE) standards.” The agreement, which means that U.S. and Canadian cattle will be treated equally, went into effect last Friday, ending the border state boycott.

More water: The government used World Water Day to announce the National Hydraulic Program. While the program stresses providing quality water supplies and drainage to the country’s population, it also refers to water for agriculture. Interesting, though, is that the program focuses on improving the state of existing – and aging – infrastructure for agricultural water. The program will modernize 1.2 million hectares that are already irrigated. It also plans to irrigate an additional 103,000 hectares.