Understanding The Costs of On-Farm Food Safety

Martha SullinsColorado State University ExtensionJanuary 11, 2014

Overview

• What are the key policy and economic drivers impacting food safety today?

• FSMA update • Role of Good Agricultural Practices • Estimated costs of good agricultural

practices• Managing expenses AND keeping your

produce safe

Balancing public and individual health

High levels of foodborne illness in the U.S.

Most recent estimates:

• 48 million cases per year– One out of every six of us

• 128,000 hospitalizations• 3,000 deaths

• Not all persons are at equal risk of contracting

a foodborne illness – some have higher risk – pregnant women (& fetus), seniors, young children,

compromised immune system Source: Scallan et al., 2011

The costs of food safety incidents to consumers and

their communitiesOhio State Researcher: Foodborne Illness Costs $77.7 Billion a Year Jan 17, 2012

COLUMBUS, Ohio -- The cost of foodborne illness in the United States is now estimated to be up to $77.7 billion a year, according to an analysis by Ohio State University researcher Robert Scharff.

Cost of food-borne illnesses is deemed much higher than earlier estimates

A report sponsored by the Produce Safety Project at Georgetown University puts the health-related price tag at $152 billion a year. That's more than four times an earlier USDA estimate.

March 03, 2010|By Andrew Zajac and P.J. Huffstutter

The industry says … “Produce is a target”*

*From Produce Marketing Association

• 24-hr news cycles (TV, Internet & social media) have changed food safety forever…

• Reports of lost consumer confidence aboundWorks against consumptionWho is the most trusted spokesman?

• Advocacy groups increasing• Food safety law is growing field• Brand protection = buyer requirements • Liability insurance needs impacting

producer/buyer relationships?

Yet, we’re lagging in fruit and vegetable consumption

• USDA Food Patterns (2010) recommend consuming 2.5 servings of vegetables and 2 servings of fruit per day.

• CDC (2010) estimated only 26% consumed vegetables three or more times per day, and only 33% of adults consumed fruit two or more times per day.

• CO Child Health Survey (2012) estimated 56% consumed less than 2 servings of vegetables per day and 50% consumed less than 2 servings of fruit per day.

A look at federal government and produce grower responses to food safety issues

What is FSMA?Food Safety Modernization Act

• Reform of US food safety laws affecting domestically grown and imported foods (for human and animal foods), through 7 major rules, plus guidance, including:– Produce Safety (Standards for the Growing, Harvesting, Packing,

and Holding of Produce for Human Consumption)

– Preventive Controls (Current Good Manufacturing Practice and Hazard Analysis and Risk-Based Preventive Controls for Human Food)

• FSMA was signed into law on January 4, 2011List of all FSMA rules and guidance: http://www.fda.gov/Food/GuidanceRegulation/FSMA/ucm253380.htm

For the produce industry, the proposed Produce Safety rule:

• Means new standards for growing, harvesting, packing, and holding produce.

• Applies to fruits and vegetables normally consumed raw (e.g., apples, carrots, lettuce, onions, tomatoes).

• Does not apply to produce rarely consumed raw (e.g., kale, potatoes, winter squash) or grown for personal consumption.

Proposed Produce Safety rule establishes standards for:

• Agricultural water,• Soil amendments (manure/compost),• Animals (domesticated & wild),• Workers’ health and hygiene, and• Equipment and food contact surfaces

Addresses the same 5 likely sources and vectors of fresh produce contamination in the field, during and post-harvest, as in the 1998 FDA GAPs Guide and most fresh produce guidance docs.

Who does the Produce Safety rule apply to?

• At this time, any farm that grows, harvests and distributes fruits and vegetables into commerce, with exemptions for:– Size of business (based on total sales )– Percentage of direct sales to qualified end users

Food sales include all products grown or raised for human or animal consumption or to be used as ingredients in any such item (i.e. produce that is a RAC), processed produce (non-RACs such as fresh-cut produce), animal-derived products such as milk and meat, aquaculture.

How have the last 12 months influenced food safety policy?

• FDA developed resources, held meetings and webinars to respond to industry concerns

• 7-month comment period– Produce Safety Rule (18,547 comments rec’d)– Preventive Controls Rule (7,437 comments

rec’d)

Coalition of state ag directors, NSAC & United Fresh identified:

• Added regulatory costs could reduce profits for existing farmers & prevent farm start-ups.

• Reduced access to fresh local food, and regs discouraging on-farm value-added processing.

• Diversifying income more difficult since more revenue would bring more regulation.

• Costly water testing, including requirement that farmers test water from open sources every seven days.

Farmer friendly?

“Because of the input we received from farmers and the concerns they expressed about the impact of these rules on their lives and livelihood, we realized that significant changes must be made, while ensuring that the proposed rules remain consistent with our food safety goals."

Michael Taylor, FDA

What’s next?

• Environmental impact statement still open for comment until March 15, 2014

• FDA is revising language on both rules, will open them for comment in early summer 2014

• In particular, FDA is revising:– water quality standards and water testing– standards for using raw manure and compost

• Final rules must be published in the Federal Register by June 30, 2015

Final implementation

• Two year implementation (2016 likely first year of enforcement)

• Dates to be staggered for small (3 years) and very small (4 years) operations

• Plus 2 years for some water requirements

Science-based food safety practices

What are GAPS?

Good Agricultural Practices

Before Planting

During Production

During Harvest

Post-Harvest

GAPs

• Practices used during crop production, harvesting, and packing to minimize the contamination of fruits and vegetables from human pathogens.

• Focus on the fundamentals of:

‒ Safe Soil

‒ Clean Water

‒ Clean Surfaces

‒ Clean Hands

How much do fruit and vegetable producers invest in

food safety?

In this study, CSU wanted to understand…

• The costs of GAPs for worker training, recordkeeping, monitoring, testing, cleaning and sanitizing activities to produce and sell produce with the lowest risk of microbial contamination

Collecting data to understand current costs that growers face

This will allow us to:

1. Help growers better incorporate food safety into their financial planning

2. Provide feedback to FDA on the impact of FSMA in Colorado, to different sizes of fruit and vegetable operations

3. Project increased costs under FSMA

Wide range of on-farm food safety costs

• Labor force: – New hires to manage food safety program or

practices? – New tasks for existing workers?

• Worker hygiene: – Training– Sanitation supplies

• Facility improvements & upkeep– Restrooms, hand-washing stations– Drinking water stations

Costs of ensuring safe inputs

Testing:– Production and post-harvest water– Soil & soil amendments

Monitoring:– Supplies for temperature control

Management:– Sanitizing post-harvest water– Fencing, deterring wildlife & pets, berms,

irrigation system modifications

Expenses related to facilities, tools & equipment

• Rodent control• Cleaning supplies• New tools, equipment & packaging• New or improved facilities:

– Construction of new wash stations, coolers, storage areas

– Upkeep on buildings, equipment

Recordkeeping, marketing communication, other costs

• Signage, labeling, packaging• Traceabililty• Web site improvements, software• Audits• Insurance

So far, growers from 13 counties have responded

• Most are growing diverse crops that will fall under FSMA

• By size of farm:

>100 acres 30% (9 farms)

10-100 acres 13% (4 farms)

<10 acres 57% (17 farms)

Farm profile• By annual sales:

• 40% have livestock operations also• 67% are open to the public

Under $25,000

(30%)

$25,000-$249,999

(13%)

$250,000-$500,000 (40%)

>$500,000 (17%)

Most report having a food safety plan

Yes (60%)

Working on it now (33%)

No plan (3%)

Most growers use GAPs, as well as other food safety practices

General GAPs

Good Handlin

g Prac

tices

Commodity-sp

ecific F

S

HACCP

Other (=

Common Sense

)0%

10%20%30%40%50%60%70%80%

More than half have conducted an audit themselves, but have not used outside

auditor• Self-audit in 2013=60%• Third-party audits: 53% have not

conducted one, but other growers have:

USDA GAP/G

HP

Other (CNG)

USDA Harm

onized GAP

Global GAP

Buyer-s

pecific

USDA O

rganic

Program

Commodity-sp

ecific

0%5%

10%15%20%25%

Labor impacts of food safety

• A few growers hired new staff (20%)

2012 2013

Managers 20% 10%

Paid labor 7% 3%

Volunteers, interns 0% 0%

But many conducted annual worker training in 2013

• 80% trained managers at $388 per manager

• 57% conducted worker/field labor training at

$31 per worker

• 20% trained volunteers at value of $40 per

volunteer

Training costs depend on scale of operation and practices

Average number trained

Managers Field workers

>100 acres 5 162

10 - 100 acres 2 31

<10 acres 1 5

Hidden or unanticipated costs: labor

1. Labor costs (management)

2. Labor costs (non-management)

• Employee training (delivery & participation)

• Recordkeeping • Hygiene• Post-harvest food safety• Cleaning food contact

surfaces• Vehicle inspection and

cleaning• Mock audit

What do growers report as their yearly costs of GAPs?

(Average expenses per acre, all farms)

Additional time spent on food safety practices $ 1,292

Employee training $ 248

Improvements (coolers, restrooms, fencing) $ 614

Supplies (paper towels, gloves, sanitizers) $ 296Audits, packaging, consumer info. at market $ 267

Annual expenses for improvements $ 202

Water & soil testing $ 24

Average total expenses on food safety $ 2,942

Average annual per acre costs for supplies ($296)

Containers, packaging $ 167

Handwashing & hygiene supplies $ 39

Office supplies for traceability, documentation $ 34

Rodent control supplies $ 24

Sanitizers for post harvest water $ 12

Cleaning supplies & sanitizers for tools, etc. $ 10

Temperature control supplies $ 9

One-time investments, average annual per acre costs ($614)

Fencing, wildlife deterrents $ 331Coolers, insulation $ 96 Post-harvest handling (wash stations, sanitation equip) $ 48

Production water-source, delivery, drainage changes $ 42

Hygiene improvements (restrooms, hand-washing) $ 33

Processing & packing costs $ 27

Harvest tools & equipment $ 26

Signage on safety, visitor & worker policies <$ 1

Examples of unanticipated or overlooked costs

• First aid kits, drinking water stations in the field

• New electrical wiring to support walk-in cooler or other refrigeration

• Software to track employee training, payroll

• All new packaging required by produce buyer

Keeping your costs under control

1. Assess your food safety risks, based on your production inputs, managerial capability, workforce, adjacent land uses & activities, water sources

2. Use estimated costs as a budgeting guideline

3. Follow critical practices

Critical practices that will help avoid or reduce additional costs

• Document, document, document– Keep track of your practices– Keep track of your costs

• Test water regularly• Keep work areas clean• Train workers regularly on hygiene & sanitation

practices• Check cooler temperatures daily• Sanitize all tools and harvest containers often• Use well-composted manure• Keep animals out of crop production areas

Save the Date!Tools for Improving Food Safety

on Your FarmMarch 12, 2014

Montrose County FairgroundsTopics covered:

• Assessing worker practices & developing a training program for your workforce • How and when to take water samples, how to read water test results, & developing a management plan based on test results• Developing and implementing cleaning and sanitizing procedures for tools and equipment• Developing a product traceability, recall and communication plan for diverse supply chains

Resources - Basics of GAPsGood Agricultural Practices webinars

• Part 1: Food Safety Basics, Regulatory Landscape, 3rd Party Audits, Worker Hygiene Available from: https://connect.extension.iastate.edu/p97225744/Webinar 1 Slides

• Part 2: Minimizing Risks During Production: Irrigation Water and Manure Management Available from: https://connect.extension.iastate.edu/p26083829/ Webinar 2 Slides

• Part 3: Minimizing Risks During Harvest & Post-Harvest: Washing & Packing, Cooling & Storage, Transportation & Traceback Available from: Webinar 3 Slides

Resources - Creating a Plan

• Fundamentals of Creating a Colorado Farm Food Safety Plan Webinar: Webinar: https://connect.extension.iastate.edu/p4b9anz5nu9/

• Colorado Farm Plan Guide: http://www.farmtotable.colostate.edu/grow-files/ColoradoFoodSafetyPlanGuide.pdf

• Colorado Farm Plan Template: http://www.farmtotable.colostate.edu/grow-files/2012-ColoradoFarmPlanFillableForm.pdf

More Resources• Global GAP:

http://www.globalgap.org/uk_en/for-producers/crops/• Harmonized GAP:

http://www.ams.usda.gov/AMSv1.0/HarmonizedGAP • CSU Extension food safety web site:

www.farmtotable.colostate.edu • Food safety & direct marketing regs:

www.cofarmtomarket.com • http://www.foodsafetynews.com/• http://www.fda.gov/Food/FoodSafety/FSMA/default.htm• FSMA Updates to subscribe to email updates from FDA

Questions or for more information,

Martha SullinsColorado State University Extension

martha.sullins@colostate.edu970-498-6006