A Couple of News Items of Interest

Two headlines in today’s USA Today caught my attention. Both issues may impact your business and the cost of your products to the consumer public.

1)  “Obesity is a Key Link to Soaring Health Tab”—The issue of obesity and its impact on the ever-rising cost of healthcare seems certain to resurrect an idea that has lain dormant for a while.  I believe our legislators in Washington, D.C. will not be able to resist bringing back the issue of taxing food products based on a government determination of a product’s impact on weight gain. They are looking for any way they can to generate dollars to pay for their “healthcare reform” programs, and obesity, especially in children, is a very easy target. Whether those tax dollars will come from higher retail prices, asking the consumer to pay a penalty for their indulgences, or from a fee system directly charging food manufacturers for the fat content of their products, welcome to one of our industry’s worst nightmares.

2) “Calif. Farmers Say Feds Make Drought Worse”—Compounding the drought conditions in California's Central Valley, one of the most productive produce-growing areas of our country,  is a series of government rules restricting access to water for irrigation. These rules are designed to protect certain species of fish. No matter how well-intentioned those rules may be, farmers in the area are livid. The end result seems headed for a situation where perhaps up to 45% of irrigated acreage in the Fresno area will be out of production due to lack of irrigation water. If this situation continues, look for significant increases in consumer prices for such items as melons, broccoli, tomatoes, almonds, pistachios, lettuce and wheat, as well as increasing imports of these items.  As one farmer put it: “If you like foreign oil, you'll love foreign food.”