Evaluating Trump’s Effect on the Food Industry

Trade wars and the government shutdown have contributed to a mixed record so far.

By Pan Demetrakakes, Senior Editor

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Melissa Grzybowski, a regulatory specialist with Food Consulting Co. (www.foodlabels.com), isn’t surprised at these measures going through, given their years of momentum.

“The Nutrition Facts label was well on its way and many companies had already made the changes,” Grzybowski says. “It's not surprising FDA continued this initiative. The USDA was required by law to determine GMO labeling regulations. This initiative also seemed to be well on its way.”

However, others suggest that the follow-through may be at least in part due to the leadership of FDA Commissioner Scott Gottlieb. Allen Sayler, senior director of food consulting services at EAS Consulting Group LLC (easconsultinggroup.com), calls Gottlieb “a tireless advocate for food safety and for FDA” who is committed to a professional approach.

“It appears that Dr. Gottlieb has the full confidence of the administration, and he has gone forward with a number of initiatives that seem to indicate that when it comes to food safety, this is not a political issue with this administration,” Sayler says.

The result, he says, is that prior initiatives in food regulation probably will be allowed to move forward: “This administration has not made an effort to initiate new food safety-based regulations, [but] it doesn’t appear that it has impeded the ongoing effort to implement what has already been started by the prior administration.”

The USDA and FDA also have taken a positive attitude in their routine regulatory interactions, says Andrew Lorenz, president of We R Food Safety! (werfoodsafety.com), a consulting firm specializing in compliance and safety issues.

“On the USDA side we are seeing the current acting administrator doing outreach to both the industry and the various consumer groups,” Lorenz says. “Overall, senior USDA FSIS [Food Safety and Inspection Service] management under the acting administrator has been positive. On the FDA side we are seeing a similar trend.”

But for 35 days, from late December to January, there was a huge disruption in that positivity: Inspectors weren’t getting paid. A large contingent of both USDA and FDA inspectors had their paychecks delayed since the start of 2019 due to a government shutdown. As of press time, the shutdown was suspended but not resolved. 

Immigration imbroglio

There’s another labor issue that’s liable to affect the food industry long after the shutdown is forgotten: Trump’s attitude toward immigration.

Many sectors of the food industry depend on immigrants, including undocumented immigrants, as a source of labor. Trump, of course, made curtailing illegal immigration the cornerstone of his campaign. His administration has followed through, at least in terms of enforcement.

The Immigration and Customs Enforcement service (ICE) conducted numerous enforcement actions on food processing facilities during 2018. Some of the higher-profile ones include: a meat processing plant in Morristown, Tenn., raided on April 6, with 97 arrests; a bakery in Chicago, audited in June and July, with a net loss of about 800 workers, or roughly a third of its workforce; a meat processing plant in Salem, Ohio, raided on June 19 with 146 arrests; a tomato plant, a potato processing facility and a cattle feedlot, all in O’Neill, Neb., raided on Aug. 8, with 133 total arrests.

In fiscal 2018, which ended in October, ICE conducted 5,981 workplace audits (for all business sectors, not just food) and filed 779 criminal charges, a 10-year record, according to an analysis by USA Today. Interestingly, of those 779 charges, 113 were against management employees, a rise of 82 percent over the previous fiscal year – but the 666 charges against workers constituted a rise of 812 percent.

The labor situation probably will be tricky for the food industry for a while. Immigrants often are the best if not only labor option for many food plants, due to factors like remote location, seasonality and unpleasant work conditions. An unemployment rate of only 3.9 percent at the end of 2018 increases the labor squeeze. But the Trump administration is unlikely to scale back aggressive immigration law enforcement in the workplace, as the Obama administration did in 2013 – and Trump will undoubtedly enjoy political support for that position.

Our 2019 Manufacturing Outlook touches on immigration as it relates to the labor force 

More generally, Trump’s political success when it comes to food will depend on whether most people are able to buy it. With low unemployment and low inflation, they probably will. During Trump’s term so far, food prices have risen only about 1 percent for a family of four.

Peel, however, believes that if tariffs stay in place over the long term, consumers will eventually feel the effects.

“At some level, I think there’s a feeling out there that, well, the economy is still strong, so [the trade war] isn’t really having an impact,” he says. “My reaction is, the economy has taken a bunch of body blows, and taken them well so far, but at some point, the cumulative effect is that it will start to have an impact.”

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