“No report issued as all commerce is halted by an FDA and CDC advisory not to consume Romaine Lettuce.”
Instead of a typical ho-hum supply/demand price report, the above line was the sole information from the U.S. Department of Agriculture’s Agricultural Marketing Service market news shipping point pricing report for romaine lettuce on Nov. 23, the day after Thanksgiving and three days after the Centers for Disease Control advised consumers to avoid all romaine lettuce.
Meanwhile, the USDA reported red leaf and green leaf lettuce were trading at $35 to $42 per carton, with demand exceeding supply and marketing conditions “much higher.”
When you look at market conditions on Nov. 19 — the day before the advisory was issued — shipping point market conditions for romaine lettuce were noted at $22-27 per carton for product from California’s Imperial/Coachella Valleys. Shipping point prices for leaf lettuce were noted in the mid-teens on Nov. 19.
When you consider the millions of pounds of romaine that were destroyed in the days after the Nov. 20 advisory, one wonders what the next step will be for the FDA and CDC. Do the agencies allow commerce to begin again on Monday?
Under what terms will romaine shipments and sales be allowed to proceed? Whatever the agencies do, they will be second-guessed.
The thorny question of who will bear the risk of loss from the advisory is addressed in this short article on the USDA Perishable Agricultural Commodities Act website.
A big pivot point is whether the romaine was purchased “f.o.b.” or “delivered,” according to PACA.
An excerpt from that article:’
The U.S. Food and Drug Administration (FDA) recently issued an advisory warning about an E. coli outbreak in romaine lettuce. The U.S. Department of Agriculture’s (USDA) Perishable Agricultural Commodities Act (PACA) Division provides the information below concerning the impact of the advisory on commercial sales contracts governed by the PACA. The “allocation of the risk of loss,” determines whether the buyer or seller bears the financial loss if any damage or loss occurs to the produce before the buyer accepts it. Which party bears the loss depends on the terms of sale. For produce shipped on F.O.B. contract, the risk of loss passes from the seller to the buyer once the seller delivers the produce to the transportation carrier. Any damage or loss to the produce during transit that is not caused by the seller is borne by the buyer. Where the contract terms of sale are “delivered”, the risk of loss is not transferred from the seller to the buyer until the produce is delivered to the contract destination. Any damage or loss to the produce during transit that is not caused by the buyer is borne by the seller.
Check out The Packer’s Chris Koger’s coverage of this issue FDA looks at labeling standard, plans to allow romaine return, Canada adds to outbreak count, romaine investigation continues, and FDA believes E. coli-tainted romaine is from California.
Other consumer press coverage:
The Hill: Why romaine won’t kill you
Wired: The science is clear: dirty farm water is making us sick
Bismark News: Health professionals say romaine lettuce can be deadly
