Pundit’s Mailbag — California Citrus Mutual’s Joel Nelson Weighs In On PTI
Jim Prevor’s Perishable Pundit, May 25, 2010
We have written a great deal about traceability, including a piece by Gary Fleming and a comment on a joint association release today.
A fair amount of the public attention paid to this issue is a result of Joel Nelsen, President of California Citrus Mutual, deciding to speak out.
Earlier this year he sent a letter to PMA and United:
March 5, 2010
Mr. Tom Stenzel, President
United Fresh Produce Association
Mr. Bryan Silbermann, President
Produce Marketing Association
Since my last communication dated February 12, I have continued to review the PTI system proposed. How would it be implemented into our industry? Would it accomplish the objective or is there a better alternative? It was an extensive review coupled with a vast amount of reading on the websites speaking to the subject.
I have talked with Tom at his recent GR session and spoke with Terry on the PMA staff. I have read the Steering Committee press release and subsequent trade media articles. I have electronically communicated with several vendors on the subject.
I have now concluded that the aforementioned proposal would have a tremendous impact on the existing systems within our industry both from an engineering, software and economic perspective without achieving any greater information than what is already available nor in any faster manner.
I have determined that the use of this system will not accomplish the traceability desired at the receiving station for our commodity. I do believe our industry has a system in place that can achieve the desired food safety goal. California Citrus Mutual therefore urges United and PMA to initiate talks with the steering committee to postpone the October 1, 2010 milestone for the fresh produce industry. I offer these brief bullet points as reasons:
Under the proposed system and because the vast majority of our shippers pack 10 sizes, three grades and in some cases different varieties of fruit daily to satisfy retail demand, the volume of GTIN numbers demanded by our industry would be staggering. A vertically integrated grower/shipper, of which there are five out of 85 shippers in our industry, would at a minimum require 8,000 GTIN numbers.
A typical citrus shipper has 100-200 growers, multiple blocks and different varieties of citrus, to monitor in accordance with existing law. They each have a system that can trace back to the block and most are remarkably similar. The GTIN proposal would require each one to have at a minimum 10-15,000 GTIN numbers. Multiply that number by a minimum of 75 shippers.
My earlier estimate of a $25m expenditure for our industry is conservative. There are no guarantees that the data could/would be accepted at receiving point. Already receivers have a one-year delay in accepting the data. Already receivers are contracting with single vendors to impose their system. This is not uniformity and in fact is creating another cottage industry similar to the food safety audits imposed on producers. Examine your own publicity. One photo shows a truck of citrus. The photo is misdirected in that the methodology portrayed is fruit leaving the packing house destined for the juice plant. Our fresh citrus is not handled in this manner and both fresh and processed can be traced back to the grove.
All of your publicity depicts bulk product displayed at retail. Where is the identity for the product? A case stamp details the information desired but the product loses its identity at retail and at the consumer level under the present system.
The RFID technology only follows the location of the carton/case, not necessarily the product. Why must receivers have this detailed information when in fact their need to know is the origination of where the product was processed? The burden then falls on the shipper to produce, according to existing law, the specific location in which the product was grown and harvested. That data and information flow already exists. GTIN promotion details the savings and efficiencies for “the system.”
The reality is that the program was designed to create more efficient inventory control for the receiver and had nothing to do with food safety. There is an assumption by vendors, consultants and receivers that the GTIN program can be modified into a one-size fits all food safety approach for the entire fresh produce industry.
Again, I offer once again, the willingness to sit down and discuss the situation in depth with members of the steering committee. I have suggested that such a discussion take place at the United Fresh meeting in April. But because of pressures by vendors, perceptions by receivers and statements by the steering committee after the Dallas session, we urge an immediate announcement that the October milestone be delayed to determine whether the approach is suitable for the entire industry.
Again, we have no problem with the goals and objectives of traceability for food safety purposes. In fact we believe we can show a better way to achieve that objective for this industry.
— Joel Nelsen, President
California Citrus Mutual
Now Joel follows up with this note to the Pundit:
Jim — This is my first time commenting on your column.
The PTI effort is not void of leadership, nor is the concept a bad idea.
The problem was the narrow approach that limited ideas to achieve a practical solution.
Reconfiguring systems at the grower/shipper level to satisfy an objective without adequate input was a mistake.
There was input but from a narrow group of entities that are not typical of the entire supply chain.
There was too much influence from vendors whose agenda was solely sales and revenues, not efficiencies or full traceability.
PTI was presented as the latter when in fact it did not and does not accomplish that goal.
It was sold as an efficient tool when in fact for a select few it was but not yet the broad customer base.
It was sold at the national level without taking it to the field for practical application.
PTI is not dead, nor is it void of leadership. It is just not done.
— Joel Nelsen
California Citrus Mutual
You can see in the associations’ joint press release, which we dealt with here, a response to many of Joel Nelsen’s concerns. The deadline for producers is pushed back as Nelsen requested and there is a plan for pilot projects, which responds to Joel Nelsen’s desire for “taking it to the field.”
But, those shippers will still have to spend a lot of money on GTINs, and the system still will not provide total industry traceability as we have pointed out many times with our story of Ken, the guy with red truck. So it is not clear that the associations really solve Joel Nelsen’s problems with PTI.
It is worth noting that not all citrus producers seem to endorse the position of California Citrus Mutual. Paramount, for example, was quite vocal at United in letting people know that it was going full steam ahead with PTI. They expressed the belief that PTI was the “right thing to do” and we believe them.
However, that is an easier position to take if you are well capitalized and able to implement PTI without a problem.
This whole issue may be starting to demonstrate another reason the industry is splintering a bit over PTI. PTI is a gold standard on traceability — but it is very expensive.
This is actually a big benefit for many companies. If retailers will constrain their supply chains to companies that can afford to buy 8,000 GTINs, in the case Joel Nelsen articulates, this will serve as a significant barrier to entry for poorly capitalized competitors.
Wait until this all goes into effect and retailers exempt local growers who, on diversified farms, simply won’t own the GTINs to meet the PTI requirements.
This won’t affect Joel Nelsen’s citrus growers much, but there will be plenty of screaming from other sectors.
Many thanks to Joel Nelsen and California Citrus Mutual for chiming in on the debate.