Thanksgiving Reflections on the American Food and Agriculture Industry
The Thanksgiving season is the perfect time to reflect on food production and security in the United States and to give thanks to the agriculture laborers who work so hard every day to make sure all forms of safe, nutritious food are available to all Americans. In that spirit, let’s reflect on the critical issues that have faced the agriculture industry this year.
In Summary…
This year for the first time in history, America has become a net Food Importer. USDA has now projected the US will become a net food importer (see chart below and pg. 51 of the report), primarily because of fresh and processed fruit and vegetable imports into the US driven by inflated costs due to programs that disadvantage American growers and packers.
US tariffs on both tinplate steel (Sec. 232 of the Trade Adjustment Act) as well as the lack of tariffs (Sec. 301 of the Trade Act of 1974, so-called China tariffs) on imported food, fresh, canned, and frozen from China have contributed to this food insecurity in the US. In addition, U.S., government subsidies of over a billion dollars through government-incentivized purchases for school lunches, defense department, and others for imported foods, especially fresh and frozen foods, have shown preference to imports over domestically produced foods. The attached ‘Key Market Statistics’ and ‘Fresh Only Food Program’ files provide helpful information on this matter.
From a food safety perspective, here is an alarming Hill article from October 2023:
"Chinese-made products coming into the U.S., are valued at an astounding half a trillion dollars… imported Chinese foods have a worrying history of high-profile product recalls and scandals spanning decades. More recently, Chinese canned fruit and vegetable imports saw a 43 percent increase between 2019 and 2022. The U.S. Food and Drug Administration (FDA) routinely issues import alerts for dozens of potentially harmful Chinese products — including canned and packaged foods."
Here's something to think about: 80% of apple juice served in public schools was made from apples sourced outside the U.S.
In Detail…
Fresh-Only Government Subsidies
Continuing to enable fresh-only food subsidies primarily benefits foreign companies and countries. This harms our American growers, supports foreign reliance on fruits and vegetables, and results in fewer nutritional options for the American families that need them the most. These are federal programs that go in contrast to the Dietary Guidelines for Americans – which state that all forms of fruits and vegetables are equally nutritious (Page 28). Other studies that validate nutritional equivalence can be found at Michigan State University, as well as the National Institutes of Health.
From the ‘Fresh Only Food Program’ document, you can review government programs that: 1) are not in alignment with the scientific community knowledgeable on nutrition and public health matters and 2) do not meet consumers where they are in their busy lives to get more Americans effectively consuming more healthy foods.
Reversing costly, fresh-only corporate welfare programs benefiting foreign companies and restoring American investments in America’s growers are matters of national security. China’s largest food imports into the United States this last year were fresh and processed fruits and vegetables. Again – USDA has now projected the United States to be a net food importer in 2023, primarily because of fresh and processed fruit and vegetable imports into the US.
A number of US government programs, ranging from the Gus Schumacher Nutrition Incentive Program within SNAP to the USDA Fresh Fruits and Vegetable Program and the DOD Fresh Fruits and Vegetables Program, cost the American taxpayer about $1 billion annually. These programs, combined with laughably lax Buy America standards for other purchasing programs, such as the food purchasing processes for the American school system, have resulted in these federal investments primarily going overseas to fresh, canned, and frozen fruit and vegetable imports.
Steel and China Tariffs
One question in the last Republican presidential debate surrounded what an incoming president could do on Day 1 to decrease the costs for American households. Eliminate the US tariff on tinplate steel under sec. 232 and place a tariff on food imports from China.
Since the Trump Administration initiated the Section 232 tariffs on steel and aluminum in 2018, American farmers and processors have been asking the Administration to exclude the specialty tinplate steel used for canned food products. While we understand and support the merits of defending the US steel industry, the specialty steel used for producing food cans and aerosol cans is certainly not a national security matter, nor is even half of the demand being produced in the U.S.
Only 2% of steel produced domestically is tinplate steel – it is a specialty material used to manufacture cans for fruits and vegetables. Not only is tinplate steel a unique product – with no national security application – the domestic tinplate steel producers will only produce enough to satisfy less than half of the demand. The gap must be filled by imported tinplate steel – which primarily comes from U.S. allies, such as South Korea, Belgium, the UK, and others (i.e. not China).
The U.S. steel industry has shown since the imposition of these tariffs, that it has not and will not re-invest in this specialty product because it is too low margin. In fact, the number of domestic production lines for tinplate steel has decreased since the imposition of Section 232 tariffs. Prior to the 2018 tariffs, there were eleven tinplate production lines in the nation (individual lines, not mills); today, we estimate only eight remain. Nevertheless, a 25% tariff was imposed and remains on the tinplate. And the result is devastating to the industry.
Over 40% of the cost of a can of vegetables like corn grown in Iowa is the tinplate steel can, even before the tariff, with a little over 20% being the actual vegetable or fruit, and the rest being other costs like labor, warehousing, distribution, etc.
The attached September 2023 Bureau of Labor Statistics numbers show that canned fruit and vegetable costs are inflated higher than general food costs and much higher than fresh fruits and vegetables. Canned fruits and vegetables are supposed to be the most affordable, reliable form of nutrition for Americans. These are products that everyday Americans absolutely rely on and this unnecessary tax has artificially inflated the cost of a can of a fruit or vegetable to skyrocket. Remember when a can of corn or green beans used to cost maybe 99 cents at the grocery store?
Consolidation and plant closings are the result of these tariffs and the lack of tariffs on imports as well as government welfare and incentives for food imports. Further, retaliatory tariffs by our allies have significantly handicapped the U.S industry’s once-dominant share of international food markets in both Europe and Japan.
The current administration – and its predecessor – have been unwilling to address the displacement of domestic food production by foreign competition that is not saddled with escalated steel packaging costs. Those foreign competitors are also not subject to FDA standards in the production of food or American labor standards set by the federal and state governments.
These programs have also failed to increase fruit and vegetable consumption for American families and children. If we want to increase nutritional intake, we must open our food programs to all forms of fruits and vegetables as they are grown and processed in the United States by American workers and to strong, safe American standards.
For more information, here are some helpful stories/links: