Next month, General Mills Inc. and Kellogg Co. will begin emblazoning their breakfast cereals with symbols that summarize complex nutritional information -- part of the growing use of logos to steer harried grocery shoppers toward healthier choices.

    The proliferation of such symbols is a worldwide phenomenon, with government regulators in Britain, Sweden and elsewhere establishing logo systems that concisely indicate how nutritious food products are. In the United States, however, corporations have been left to devise their own schemes. That's led to a patchwork of systems that some fear further confuses consumers already unsure about how to eat wisely.

    On Monday, the U.S. Food And Drug Administration took a first step toward clearing matters up, inviting food companies, trade groups, watchdog organizations, medical experts and its overseas counterparts to share how front-label symbols, like the "traffic light" system used in Britain, can improve public health.

    The FDA stressed the meeting was a preliminary step as it considers whether to establish a national symbol system. Any action is likely years away -- and, even then, any system is likely to be voluntary.

    Absent federal action, food manufacturers and retailers have taken matters into their own hands. PepsiCo Inc. uses the ''Smart Spot'' symbol on diet Pepsi, baked Lay's chips and other products. Hannaford Bros., a New England supermarket chain, uses a zero to three-star system to rate more than 25,000 food items it sells. And in Britain, the government has persuaded some food companies to use a ranking system with green, yellow and red lights to characterize whether a food is low, medium or high in fat, salt and sugar.

    "A whole range of consumers like it and can use it. And the important thing is that we know that it is actually changing what is happening in the marketplace," said Claire Boville, of Britain's Food Standards Agency, citing increased sales of foods flagged with the green and yellow symbols. Last week, Hannaford reported similar results.

    Tesco PLC, Britain's largest grocery chain, uses a slightly different symbol system that lists percentages of guideline daily amounts for various nutrients. It too has had an effect, as consumers sent sales of products like Choco Snaps and prawn mayonnaise sandwiches plummeting in favor of more healthful options, the company's Breda Mitchell told the FDA.

    The General Mills and Kellogg's versions will be similar, highlighting fat, sugar, salt and other nutrient levels, as well what percentage each contributes to what consumers typically require, officials said.

    Overall, there is little consistency among the competing symbol regimes in use, according to the FDA, as it works to glean more information about them.

    "We really don't have adequate information about the various programs to understand how their criteria work and how they are used and understood by consumers ... and how they may effect market choice," said Michael Landa, deputy director of the FDA's food office.

    While Landa said the agency is in information-gathering mode, one lawmaker said he would move forward with legislation compelling the FDA to establish a single set of nutrition symbols. The push comes as obesity rates continue to climb in most states.

    "The proliferation of different nutrition symbols on food packaging, well-intended as it may be, is likely to further confuse, rather than assist, American consumers who are trying to make good nutrition choices for themselves and their families. FDA should take meaningful steps to establish some consistency to these many different systems of nutrition symbols," Sen. Tom Harkin, D-Iowa, chairman of the Senate agriculture committee, said in a statement.

    A petition filed in November by the Center for Science in the Public Interest also asked the FDA to create a national front-label symbol system. Such a system should complement but not replace the sometimes dizzying information packed into the nutritional labels most foods now bear, said Michael Jacobson, the advocacy group's executive director.

    "You could send a child to the store with 20 bucks and say, 'Johnny, you can buy whatever you want as long as it has a green dot -- and you can get one red-dot food,'" Jacobson said.

    Absent congressional action, Jacobson said it could take a decade for the FDA to set up such a system.

    National Dairy Council nutrition expert Ann Marie Krautheim said setting up a consistent system would be helpful, if grounded in science and tested with consumers to ensure it worked. Shoppers spend as little as two seconds evaluating food labels, research shows.

    Krautheim said her Council's own research showed taste still trumped all for consumers when choosing what to eat, with convenience, cost and nutrition all vying for second place.

    "The ultimate goal, of course, is that the overall dietary pattern that consumers select is a healthful dietary pattern," said Barbara Schneeman, director of the FDA's nutrition office.

    But the corporate symbols now in use don't necessarily flag what's bad for you -- or even what's good.

    "This does not say 'healthy.' It says 'better for you,'" said Richard Black, Kraft Food Inc.'s vice president of global nutrition, of the "Sensible Solutions" logo used on more than 500 of the company's products.

    The FDA already allows food companies to use ''fat-free'' and other claims on labels. Those claims are voluntary, but are subject to FDA regulation. Likewise, the Grocery Manufacturers Association and food companies want the use of symbols to remain voluntary. 9-11-07

(THE ASSOCIATED PRESS)

Burger King pledged Wednesday to offer healthier fast-food items for children under 12, with plans to sell and market flame-broiled Chicken Tenders and apples cut to resemble thick-cut french fries.

Burger King Holdings Inc., the world's second largest hamburger chain, said it has set nutritional guidelines to follow when targeting children under 12 in advertising, including limiting ads to Kids Meals that contain no more than 560 calories, less than 30 percent of calories from fat and no more than 10 percent of calories from added sugars.

In that vein, Burger King is building a Kids Meal that will contain the flame-broiled Tenders, organic unsweetened applesauce and low-fat milk, for a total of 305 calories and 8.5 grams of fat. It will be available in restaurants sometime in 2008, the company said.

The fast-food chain is also developing what it calls BK Fresh Apple Fries. The red apples are cut to resemble french fries and are served in the same containers as fries, but they are not fried and are served skinless and cold.

"We not only want to better inform parents and kids about these new menu options but also to demonstrate through product innovation that better-for-you foods can be fun and taste good," said John Chidsey, Burger King's chief executive.

The 2.4-ounce serving of Apple Fries will have 35 calories, the company said. A small serving of Burger King french fries has 230 calories and 13 grams of fat, according to Burger King's Web site.

Burger King will use U.S. grown apples that are cut and packaged in a sterile environment and subjected to a pre-wash that contains lemon to keep them from turning brown, said Burger King spokesman Keva Silversmith

The Miami-based company will continue to offer its fried Chicken Tenders on its menu. The flame-broiled Tenders have 145 calories and 6 grams of fat per four-piece children's serving. A four-piece serving of fried Tenders has 170 calories and 10 fat grams.

Miriam Pappo, a registered dietitian and nutritionist, said the move is part of a trend to offer healthier products at restaurants as people become more aware of nutrition and take interest in exactly what they are eating.

"It's a good trend. The actual ultimate solution is still to eat less fast food," said Pappo, clinical nutrition manager at Montesiore Medical Center in New York. "It will only be successful if it tastes good and it will only be successful if it fills the child up."

Long criticized for a lack of healthier options, several quick-service food chains in recent years have developed items for those seeking fast access to a less-expensive meal that has fewer calories and less fat than a burger, french fries and a soda.

Burger chain leader McDonald's Corporation offers apple slices with a low-fat caramel dip and low-fat milk in its Happy Meals, while offering salads and fruit parfaits on its regular menu. Wendy's International Inc. offers salads, yogurt with granola, and mandarin oranges.

Burger King also sells salads and has a veggie burger. It did not reveal a price for its new children's items because food and paper costs have not been set, Silversmith said.

Ronni Litz Julien, a Miami nutritionist and author, praised Burger King but said it was the responsibility of parents to teach their children to eat healthier.

"I'm elated with the idea that they are paying more attention to the children today," Julien said. "The truth of the matter is that children in this country have never been more unhealthy. Fast food has been a big part of that. ... If a parent doesn't encourage this from the get go for their children, whether its 4 years old or 10 years old, it can't possibly be successful." 9-12-07

(Reuters)
By Sybille de La Hamaide

PARIS -- Biofuels, championed for reducing energy reliance, boosting farm revenues and helping fight climate change, may in fact hurt the environment and push up food prices, a study suggested on Tuesday.

In a report on the impact of biofuels, the Organization for Economic Cooperation and Development (OECD) said biofuels may "offer a cure that is worse than the disease they seek to heal".

"The current push to expand the use of biofuels is creating unsustainable tensions that will disrupt markets without generating significant environmental benefits," the OECD said.

"When acidification, fertilizer use, biodiversity loss and toxicity of agricultural pesticides are taken into account, the overall environmental impacts of ethanol and biodiesel can very easily exceed those of petrol and mineral diesel," it added.

The OECD therefore called on governments to cut their subsidies for the sector and instead encourage research into technologies that would avoid competing for land use with food production.

"Governments should cease to create new mandates for biofuels and investigate ways to phase them out," it said.

The OECD said tax incentives put in place in many regions, including the European Union and the United States, to encourage biofuel output could hide other objectives.

"Biofuel policies may appear to be an easy way to support domestic agriculture against the backdrop of international negotiations to liberalize agricultural trade," it said.

CUT DEMAND

Instead it encouraged members of the World Trade Organization to step efforts to lower barriers to biofuel imports to allow developing countries that have ecological and climate systems more suited to biomass production.

The OECD also encouraged government to work on cutting demand for transport fuel rather than encouraging production of so-called "green" fuels.

"A liter of gasoline or diesel conserved because a person walks, rides a bicycles, carpools or tunes up his or her vehicle's engine more often is a full liter of gasoline or diesel saved at a much lower cost to the economy than subsidizing inefficient new sources of supply," it said.

Biofuels, made mainly from grains, oilseeds and sugar, have been accused of being responsible for a recent surge in farm commodities prices, along with other factors such as lower output and tight stocks.

The OECD, which said in July that it saw biofuels keeping prices at high levels into the next decade, said it would lead to an unavoidable "food-versus-fuel" debate.

"Any diversion of land from food or feed production to production of energy biomass will influence food prices from the start, as both compete for the same input," it said. 9-11-07

(The Associated Press)

WASHINGTON -- School vending machines are stocked with fewer high-calorie soft drinks today because some states have banned the sale of sodas on campus and the beverage industry is phasing in healthier drinks, according to an industry report.

The findings being released Monday are in the industry's first report card since agreeing in May 2006 to pull nondiet soft drinks from the vast majority of public and private schools over the next three years.

Nondiet soda accounted for 32 percent of the drinks for sale at schools during the 2006-07 school year. In 2004 it was 47 percent.

Also, the beverages shipped to schools last year contained about two-fifths total fewer calories than what they did in 2004, the report said.

"Through these guidelines, the beverage industry is cutting calories in schools in a dramatic way across the country," said Susan Neely, president and chief executive officer of the American Beverage Association.

The trade group represents the country's nonalcoholic beverage industry, which includes soda, bottled water and fruit drinks.

Health officials long have expressed concern that schools contributed to rising obesity rates because campus vending machines sold high-calorie and high-sugar snacks and drinks.

Margo Wootan, director of nutrition policy at the Center for Science in the Public Interest, said the report card offers some good news.

"It looks like the country has taken a good step forward in addressing soft drinks in schools, but we still have a lot of work to do," she said.

Wootan said about 22 states limit the sale of sugary drinks in some grades. For example, Kentucky's school vending machines are filled with bottled water and dried fruit instead of soda and snack cakes. About a dozen states ban the sale of full-calorie soft drinks in high schools.

Wootan said she believes legislative mandates are more effective than voluntary guidelines. But she said the guidelines have reduced the amount of unhealthy offerings in vending machines.

"It's a part of the mix. I wouldn't put it as the most important contributor," she said. "The soft drink industry deserves a lot of praise for how far they've come in the past five years. They used to fight us every step of the way at the local, state and national level."

Most elementary schools are already soda-free. But under the voluntary guidelines, beverage companies agreed to sell only water, unsweetened juice and low-fat and nonfat milk to elementary and middle schools. Diet sodas and sports drinks will remain in high schools.

The guidelines were brokered by the Alliance for a Healthier Generation, a collaboration between the William J. Clinton Presidential Foundation and the American Heart Association.

It involves industry leaders Cadbury Schweppes PLC, Coca-Cola Co. and PepsiCo Inc. as well as the beverage association, which together control 87 percent of the public and private school drink market.

Robert Wescott, the economist hired by the beverage association to evaluate vending machine stock, said the overall shipment of nondiet soft drinks to schools peaked in 2003-04 school year, so deliveries were falling even before the industry's agreement. But that trend has accelerated, he said.

"I'm very confident we have the correct story here: Volumes are down sharply and the shift is heavily away from carbonated soft drinks," Wescott said.

Overall, shipments of all beverages to schools, when measured in ounces, dropped 27 percent between 2004 and the 2006-07 school year.

The biggest declines were in sugary fruit drinks, 56.2 percent, and full-calorie soft drinks, 45.1 percent. Meanwhile, there was a 22.8 percent increase in the volume of bottled water in school vending machines.

Neely said that the guidelines led the beverage industry to invest millions of dollars to retrofit vending machines and repackage products. Those efforts will continue as companies work toward fully ending sales of nondiet soft drinks by the 2009-10 school year. 9-17-07

(www.stuff.co.nz)
By PAUL GORMAN and JOHN MCCRONE

An explosive new book will tomorrow accuse the dairy industry of keeping the public in the dark about the health risks of the milk variety dominating New Zealand supplies.

The book, which will hit book shops tomorrow, is by a respected academic, Lincoln University Professor Keith Woodford, who has spent three years unravelling the links between serious illnesses and A1 milk. The alternative is known as A2 milk.

Woodford says the industry has been quietly converting herds to A2 milk producers through artificial insemination - a change expected to take 10 years.

His new book on the subject - Devil in the Milk: Illness, health and politics, A1 and A2 milk - claims:

There is a large body of evidence from more than 100 peer-reviewed medical and science papers linking one of the proteins in A1 milk to illnesses such as type 1 diabetes, heart disease, autism, schizophrenia, auto-immune diseases and Crohn's disease.

The mainstream New Zealand dairy industry has worked to ensure the public remain uninformed on the issue of alternative milk by holding back key information and manipulating public opinion.

The New Zealand Food Safety Authority has been compromised because of its dual responsibilities for food safety and promoting food exports.

The New Zealand dairy industry has been arguing to the rest of the world that A1 versus A2 milk is not an issue, while moving its herd towards A2 milk.

A2 milk, which does not contain the A1 beta-casein protein fragment that is implicated in many serious illnesses, is available in a limited number of supermarkets and shops in New Zealand.

Woodford said there was no doubt the protein should be avoided. "It has the potential to create mayhem in our bodies."

But New Zealand dairy giant Fonterra said it had no plans to change to a largely A2 herd on health reasons.

Group technology director Dr Jeremy Hill said there was no compelling evidence of the need to do so.

"Our view hasn't really changed in recent years, which is that until the balance of the science presents a plausible case for this being an issue, we haven't necessarily seen the need for an accurate assessment of the A1-A2 issue," he said.

Woodford told The Press yesterday the issue was "hugely important". "I realised there were lots of scientists who knew little bits of the story, but nobody was in a position or willing to try to bring the story together," he said.

"Once all the bits came together, then the evidence (for A2 milk) just becomes incredibly compelling.

"We have had mainstream dairy industry people arguing there is no evidence out there, and that is just totally inconsistent with the reality.

"My advice to Fonterra has been that they need to embrace A2 and see it as an opportunity, albeit with short-term difficulties."

All milk was A2 until several thousand years ago, when a natural mutation occurred in the ancestors of modern European cattle. Herds throughout much of Asia, Africa and southern Europe remain naturally high in A2 cows.

Woodford said the mainstream dairy industry had "tried consistently to ignore and denigrate the science".

"As a result, most consumers and also many dairy farmers know nothing about these issues," he said.

Peter Gatley, general manager of genetics at Livestock Improvement Corporation, which is responsible for the artificial insemination of four out of five cows, denied there was any deliberate policy to shift the New Zealand herd towards A2 milk production.

Gatley said about a third of cows were A2. By chance, 60 per cent of the 40 or so bulls used for all insemination were of the A2 type, so there would be a marked shift towards A2 over the next few years.

Gatley said this was not planned, but if Fonterra wanted to encourage such a shift, it only had to offer a small premium for A2 supply, and farmers would be at it "like hungry dogs". No such price signal had been sent.

Auckland University former medicine professor Sir John Scott said about 20% of the population could be susceptible to A1-associated health problems.

Scott said that created a terrible dilemma for the industry.

"My policy would be to say there is evidence which we're taking seriously. It's not proven. If we change to A2, it might be better," he said. 9/15/07

(DOW JONES NEWSWIRES)
By Ray Brindal and Rachel Pannett

PARKES, Australia --Amid harrowing tales of farmers committing suicide, a crisis meeting here Tuesday proposed yet more measures that might help Australian farmers and rural communities survive in the face of yet another drought.

The meeting took place as cabinet approved a further A$714 million in funding for drought-affected farmers, increasing the overall support spent or committed since 2001 to more than A$3.5 billion.

"We will stand shoulder to shoulder with (farmers) through this terrible drought, in the hope that the support that we are providing will lift their spirits, and it will provide them with the assistance they need to carry on," Prime Minister John Howard said when he announced the latest funding.

After a sudden turn for the worse in seasonal conditions midyear and without immediate widespread rainfall, winter crops including wheat in many parts of eastern Australia look like failing for the second consecutive year, which would make it the third year in the past six.

Feed for livestock is dwindling and water inflows to the Murray-Darling basin, the food bowl of Australia and the major area for irrigated agriculture, are at record low levels.

The low level of irrigation water available has led to talk of a need to cut water to permanent agricultural plantings, such as citrus trees, to preserve supplies for humans and livestock.

Potentially at stake is the viability of many farming areas and communities in rural Australia.

"We need something like a war cabinet formed," to confront the crisis, Bruce Wilson, the Mayor of nearby Cowra Shire and the president of lobby Shires Association of New South Wales state, told the Parkes meeting.

Farmers need access to grants to replant crops, increased support for mental health problems, subsidies for local government rates and more water storage, he said.

A call for a larger exit package for farmers and better access to existing drought assistance was met in Howard's announcement.

Wilson wants clear bipartisan support for these measures from both sides of politics ahead of a general election likely to be called within weeks. Without this support, little will happen for the next several months given that the government is traditionally restricted in what decisions it can take during the formal election campaign, he said.

"Many individuals and communities just can't wait that long," he said.

Margaret Brown, New South Wales vice president of the Country Women's Association, said 7 to 9 people are committing suicide a week in some drought-affected country areas, and that doesn't include the many involved in single vehicle accidents. She voiced strong support for major increases in funding for visible mental health support, workers and community centers.

Jock Laurie, President of lobby New South Wales Farmers' Association, said the situation is dire for many grain growers. Some owe hundreds of thousands or even millions of dollars, after committing early in the growing season to forward sales, hedges or swaps only to see their crops fail and prices soar, he said. They now face or have already washed out these contracts at huge losses, he said.

Many livestock producers including dairy are being forced to sell their core breeding stock, making any recovery from the drought difficult, he said.

Production from much of horticulture could fall to next to nothing with zero allocations of irrigation water, he said.

Laurie urged state and federal governments and banks to make long-term commitments to farmers and rural communities.

"The banks are carrying enormous debt loads" in rural communities and need to be involved, he said.

John Cobb, junior federal minister for the environment and water resources, in committing the government for "the long haul," said 23,000 farmers, or about a fifth of full time farmers, have taken up exceptional circumstances drought assistance.

He said the government won't be able to keep all farmers on their land, given that the drought is "going to get a damn sight worse than it is now."

"Our aim is to have at the end of the day when this drought does recede as many people on their land as possible," he said.

But both he and opposition Labor Party agriculture spokesman Kerry O'Brien conceded some farmers will lose their land. "It is probable that if there is a permanent change (to the weather) that some regions won't be viable in the long term," O'Brien said.

The new measures announced by Howard included an increase in an off-farm income limit to A$20,000 from A$10,000, raising the off-farm asset limit for access to interest rate subsidies to A$750,000 from A$473,000, and providing a A$150,000 exit grant to farmers wanting to leave the land, raising the asset test on the grant to A$350,000.

The government will provide enhanced advice on retraining and irrigation, and more funding for counseling and to charitable agencies providing emergency assistance to farmers. It will extend emergency assistance to small businesses reliant on farmers for income to all those in towns of up to 10,000 population that have suffered a downturn.

The package provides interim assistance to the remaining agricultural land in New South Wales and South Australia not currently covered by the government's Emergency Circumstances program. Four areas of southern Australia currently being assessed for full emergency assistance will have immediate access to full support. 9-24-07

(Washington Post)
By Jane Black

A billion-dollar battle over selling sports drinks and "enhanced" water in public schools has spilled into Congress and threatens to derail a major attempt to cut back the sale of junk food from school vending machines and snack bars.

In an attempt to limit the sale of high-calorie sodas, candy bars and other snacks in schools, Sen. Tom Harkin (D-Iowa) has introduced a bill that would have the government set new nutritional standards for the foods and drinks that schools sell to students outside cafeterias. But just what those standards should be is the issue.

Public health advocates want the standards to ban the sale of Gatorade and Powerade, which typically contain as much as two-thirds the sugar of sodas and more sodium, as well as sweetened waters such as VitaminWater and SoBe Life Water. Excessive sodium intake by young people could fuel a surge in high blood pressure, which until recently was considered a health threat only in later life, they said.

The trade group representing Coca-Cola, Pepsi and other bottlers, whose annual sales of sports drinks reached $7.5 billion last year, counters that sports drinks and sweetened waters are lower in calories, "appropriate" for high school students and "essential" to young athletes. In 2006, sports drinks were the third fastest growing beverage category in the United States, after energy drinks, such as Red Bull, and bottled water, according to the trade journal Beverage Digest.

Under current law, meals served in school cafeterias must meet some standards, but snack bars, school stores and vending machines may sell anything that contains at least trace amounts of protein, vitamins and minerals. The result: Many students make a meal out of a bag of chips, a sports drink and a chocolate bar.

The current version of the legislation requires the Agriculture Department to begin developing the rules behind the standards, but industry and public health advocates both favor speeding things up by writing the standards into the legislation itself.

Having agreed voluntarily to phase out full-calorie sodas from schools by 2009, bottlers are heavily promoting the sports drinks, and not just to athletes. A recent television ad for the new product Gatorade A.M. shows NBA player Kevin Garnett dressed like a milkman, dropping bottles of Gatorade at the doorsteps of active suburban parents and kids.

Harkin's bill, which he hopes to incorporate into this fall's farm bill, has been co-sponsored by 25 senators. More than 100 organizations, from the American Federation of Teachers to the Yale Prevention Research Center, support the plan. Eager to avoid bad publicity, even the Grocery Manufacturers Association and the American Beverage Association, which have historically resisted any regulation, say they are "open to discussing" federal standards to avoid a patchwork of state and county rules.

But the bottlers do not want the standards to prohibit sports drinks and enhanced waters. Without bottler support, it will be difficult to sign up members of the Senate Agriculture, Nutrition and Forestry Committee, which is chaired by Harkin but includes beverage industry supporters such as ranking Republican Saxby Chambliss, who represents Coke's home state of Georgia.

Nutrition experts contend that sports drinks are not as healthful as manufacturers claim. A 12-ounce bottle of Gatorade Rain contains 75 calories, 21 grams of sugar and 165 milligrams of sodium, compared with 150 calories, 40.5 grams of sugar and 52 milligrams of sodium in a can of Coke.

In April, the Institute of Medicine released a report urging that sports drinks be made available in schools only to student-athletes participating in more than one hour of vigorous activity. And a report from the University of California at Berkeley's Robert C. and Veronica Atkins Center for Weight and Health warned that students who drink one 20-ounce sports drink every day for a year may gain about 13 pounds.

Nutritionists also warn of excessive salt consumption among more sedentary students. A 20-ounce bottle of Gatorade contains approximately 275 milligrams of sodium, almost 12 percent of the recommended daily allowance for people ages 14 to 18. Already, more than 75 percent of children consume more than the recommended 2,300 milligrams of sodium each day, according to the Institute of Medicine.

"Most kids you see carrying around sports drinks are not athletes," said Mary Story, a professor of nutrition at the University of Minnesota's School of Public Health and one of the authors of the institute's report. "When you look at the ingredients, it's water, high-fructose corn syrup and salt. The question is, who is really benefiting? Is it the kids or the companies that make [the drinks]?"

Sales in schools are rising. The beverage association reported that sports drinks increased their market share in schools from 14.6 percent in 2004 to 20 percent in the 2006-2007 school year. During the same period, full-calorie sodas' share dropped from 39.9 percent to 29.8 percent.

Sports drinks are particularly good for the bottom line. Pepsi-owned Gatorade, which has an 80.2 percent market share, contributed 15 percent of Pepsi's profit growth in the 2006 fiscal year, according to Robert Van Brugge, an industry analyst at Sanford Bernstein. Powerade isn't as significant a profit driver for Coca-Cola, but, Van Brugge notes, the company spent $4.1 billion in May to purchase VitaminWater parent Glaceau. "They have to make that investment work," he said.

Beverage companies have spent millions making sure that sports drinks are associated with health and athletics. According to Competitive Media Research, Pepsi spent $81 million promoting Gatorade for a three-month period that ended in May. Ending up on a list of school junk foods could undermine that healthful, sporty image.

"For years we've been programmed to believe that sports drinks are healthy and you need to replenish those electrolytes after you go out and walk the dog," said Margo Wootan, director of nutrition policy at the Center for Science in the Public Interest. "They don't want any official sanctioning of the idea that sports drinks are associated with obesity."

A few school districts have already fought nutrition battles over sports drinks, and Connecticut last fall became the first, and so far only, state to have passed legislation barring sports drinks and enhanced waters in schools. Both Maryland and Virginia rules permit them, though Montgomery County has mandated that sports drinks be available only in the sports education areas. The District of Columbia's new wellness policy, which awaits final approval from Schools Chancellor Michelle Rhee, also rejects sports drinks.

The president of the Connecticut Senate, Donald Williams, said the beverage industry's high-pressure lobbying made his state's bill one of the most contentious in his 14 years in office. "People were throwing themselves in front of the bus on behalf of the soda companies," he said.

Kevin Keane, the beverage association's vice president for communications, said the attack on sports drinks is misguided. "These drinks are low in calories and the portion sizes are capped," he said. "They have benefits to the student. Where you have students competing in athletics throughout the day, it's an essential beverage to make available. These are very reasonable, common-sense things."

For Harkin, allowing sports drinks and enhanced waters to remain in schools could be a deal-breaker. "Our most recognized national health watchdog -- the Institute of Medicine -- said sports drinks are equivalent to flavored water, noting their high sugar content," he said. "If the beverage industry is serious about the health of our kids, as it repeatedly claims to be, science and sound health should be the guiding principle." 9-26-07

Hoping to ride one of the food industry's hottest trends, Steve Demos, the eccentric founder of White Wave, whose Silk soy milk is now found everywhere from Wal-Mart to Starbucks, will debut Goodbelly, his latest product, at the Expo East natural foods show in Baltimore this weekend.

Goodbelly is an organic fruit juice containing a patented probiotic culture.

Probiotics are microorganisms that, studies show, can confer a health benefit on our bodies, counterbalancing the effects of a poor diet or stress. Nutritionists are increasingly recommending probiotics for digestive problems or to aid the immune system.

Carbonated yogurt: Sizzle or fizzle?
     "There is a logic to the use of probiotics," says nutritionist Ed Blonz. "The positive potential of these foods and the beneficial organisms they contain are a good reason to include them in the diet."

Widely consumed in Asia and Europe, probiotic products are just starting to gain traction in mainstream American retail channels. Worldwide, sales of so-called "functional" yogurt products -- mostly probiotics -- total $15.9 billion dollars. But only about 5% of those sales are in the U.S., according to data tracker Euromonitor.

"Based on success abroad, there seems to be a lot of potential, but the category is very much in the early adopter phase here," says John Craven, publisher of the beverage industry newsletter BevNet.

Among the early adopters was Dannon, the American subsidiary of Groupe Danone of Paris, which made a big bet on probiotics last year with Activia, a yogurt containing a natural probiotic culture that battles constipation. While it certainly presented a marketing challenge -- the concept of "digestive transit" makes most people blanch -- Activia is now a $200 million brand in the U.S. and available in Wal-Mart.

"They can buy feed more economically if they're located near an ethanol facility," Endres said. "You take the transportation out."

Wet distillers grains are cheaper than dried distillers grains, but they also have a short shelf life. The grains will begin to grow mold within 5-7 days in the summer unless they're in bunkers or silo bags, said Ken Kalscheur, an associate professor at South Dakota State University.

Among the early adopters was Dannon, the American subsidiary of Groupe Danone of Paris, which made a big bet on probiotics last year with Activia, a yogurt containing a natural probiotic culture that battles constipation. While it certainly presented a marketing challenge -- the concept of "digestive transit" makes most people blanch -- Activia is now a $200 million brand in the U.S. and available in Wal-Mart.

Activia's success has inspired a probiotic procession of sorts. Among others, General Mills' Yoplait has launched YoPlus yogurt, Kraft now has a probiotic-laden cheddar cheese, and Kellogg's Kashi last year launched a probiotic cereal.

Dannon, meanwhile, is already on its second probiotic launch, re-branding the Actimel yogurt drink that it already sells around the world as DanActive, and which claims to "strengthen your body's defenses."

An organic milk ripoff
     "We are on the cusp of a major shift in the market for products with digestive health benefits," says Colleen Zammer, a food scientist formerly with beverage giant Diageo. "Probiotics are definitely for real," adds Scott Van Winkle, managing director at Canaccord Adams, who covers Whole Foods and other "healthy living" companies.

Demos wants to cash in on this emerging market with Goodbelly. The drink contains a probiotic called Lactobacillus plantarum 299V, which he has licensed from Probi, a Swedish biotech company. This particular bacterium has been around for over a decade and is currently found in the ProViva brand of products, made by Swedish dairy giant Skane to calm queasy stomachs and reduce gas in the intestines.

"In the European market, there is a huge amount of square footage dedicated to probiotic products [in stores], but in the U.S., it's almost like there is a vacuum," says Demos, who spoke to Fortune just hours after returning from a trek through the highlands of Papua New Guinea.

"We are convinced that this opportunity exists. There's an untapped market of aging people [in the U.S.] whom the marketers have dismissed. I'm an old geezer. My body is starting to talk to me and I don't like conversation."

Demos plans to pilot test Goodbelly in the natural food mecca of Boulder, and if that goes well, says he will take it national next year. But will probiotics play in Peoria?

The man who brought organics to Main Street
     "They told me soy wouldn't work in Peoria," counters Demos, who made his first batch of soy in a bathtub in the 1970s. Sales of soy milk were meager in the early years, but skyrocketed in the mid-1990s when Demos had the bright idea to put Silk in shelf-stable cartons.

Dean Foods of Dallas acquired White Wave in 2002 for over $200 million, a far cry from Demos's initial investment of $2,000. At one point Demos, a Buddhist, sued to keep Dean from taking his company over, then agreed to stay on as CEO of a $1.1 billion unit of Dean that included Silk, Horizon organic milk, and Hershey's chocolate milk.

When Demos left Dean in March 2005, he vowed to start another organic food company at some point. After circumnavigating the globe three times with his family, Demos says now is the time.

"To return to capitalism and to influence health once more time, and to get some benefit from it, is exciting," says Demos, who believes his new venture, which he's self-funding, could be a billion-dollar entity over time.

That remains to be seen, but it will be fun watching to see if Demos can catch lightning in a bottle once again. 9-27-07

(Wall Street Journal)
By SCOTT KILMAN

Rising prices and surging demand for the crops that supply half of the world's calories are producing the biggest changes in global food markets in 30 years, altering the economic landscape for everyone from consumers and farmers to corporate giants and the world's poor.

"The days of cheap grain are gone," says Dan Basse, president of AgResource Co., a Chicago commodity forecasting concern.

This year the prices of Illinois corn and soybeans are up 40% and 75%, respectively, from a year ago. Kansas wheat is up 70% or more. And a growing number of economists and agribusiness executives think the run-ups could last as long as a decade, raising the cost of all kinds of food.

In the past, such increases have been caused by temporary supply disruptions. Following a poor harvest, farmers would rush to capitalize on higher crop prices by planting more of that crop the next season, sending prices back down. But the current rally, which started a year ago in the corn-futures trading pit at the Chicago Board of Trade, is different.

Not only have prices remained high, but the rally has swept up other commodities such as barley, sorghum, eggs, cheese, oats, rice, peas, sunflower and lentils. In Georgia, the nation's No. 1 poultry-producing state, slaughterhouses are charging a record wholesale price for three-pound chickens, up 15% from a year ago.

What's changed is that powerful new sources of demand are emerging. In addition to U.S. government incentives that encourage businesses to turn corn and soybeans into motor fuel, the growing economies of Asia and Latin America are enabling hundreds of millions of people to spend more on food. A growing middle class in these regions is eating more meat and milk, which in turn is increasing demand for grain to feed livestock. In the U.S., a beef cow has to eat roughly six pounds of grain to put on a pound of weight, and a hog about four pounds.

The reversal of a long-term trend toward lower grain prices could have profound effects on the world's ability to feed its poor. Global grain stockpiles are being drawn down to their tightest levels in three decades, leaving the world vulnerable to shocks brought on by bad harvests. And it's far from clear how much more land could be brought into production or to what extent advances in biotechnology might increase crop yields in the future.

American families, which spend 9.9% of their disposable income on food, are facing the fastest-rising food prices in 17 years. The consumer's cost for everything from yogurt and popcorn to breakfast cereal and fast-food french fries is climbing. In U.S. cities last month, the average retail price of a pound loaf of whole-wheat bread was up 24% from a year ago, according to the Bureau of Labor Statistics. Whole milk hit $3.807 a gallon, up 26%.

Similar increases are showing up abroad. Italian shoppers are protesting soaring pasta prices, and Mexican authorities have capped the price of corn tortillas. Pakistan is curbing wheat exports to counter rising food-price inflation while Russian authorities, worried about rising bread prices, are considering a similar clampdown.

Food companies are struggling to figure out how to pass on higher costs to supermarkets and restaurant chains, which have gotten bigger and thus gained clout since the last prolonged rise in food prices in the 1970s.

"We're in uncharted territory," says Christopher Fraleigh, chief executive of the food and beverage division of Sara Lee Corp., which earlier this month raised its bread prices 5%.

The biggest winner is the U.S. Farm Belt, which is primed for an unusually long expansion, even as a nationwide housing slump damps the broader economy. The Agriculture Department expects U.S. net farm income to soar 48% this year to a record $87.1 billion.

"I sold wheat here just the other day for $7 [a bushel]. That's the first time I've ever done that," says Doyle Johannes, a fourth-generation grain farmer in Underwood, N.D. With prices so high, he bought his first new harvesting combine, a $250,000 Caterpillar decked out with computerized controls and a built-in cooler.

An expected spending spree by farmers is igniting the stocks of several farm suppliers. Shares of implement maker Deere & Co. are up about 76% from a year ago, while seed and herbicide giant Monsanto Co.'s stock is up 79%, and fertilizer maker Mosaic Co.'s shares have more than tripled.

The grain rally shows few signs of slowing even though U.S. corn farmers are expecting a record harvest. Futures traders are betting that the price of corn, used for everything from sweetening soda to putting the crunch in snack foods, will climb above $4 next March and stay above that level into 2010. In recent days, Iowa farmers have been selling corn for $3.25 a bushel.

Next year is shaping up to be the third in a row in which the world consumes more grain to make fuel, food and livestock feed than it harvests. The trend is helping reduce global grain stockpiles to their lowest point relative to consumption since the mid-1970s, when Asia struggled with chronic food shortages and the Soviet Union suddenly emerged as a big grain importer.

Part of the reason for the drawdown can be seen in China, where soaring demand for milk has increased the number of dairy cattle threefold so far this decade. Half of the world's hogs now live in China, which is importing about 13% of all the soybeans grown in the U.S. to help fatten its livestock. The Chinese government, caught off guard by a nearly 50% rise in retail pork prices, is throwing cash at farmers willing to produce more of the nation's most widely consumed meat.

The prospect for a long boom is riveting economists because the declining real price of grain has long been one of the unsung forces behind the development of the global economy. Thanks to steadily improving seeds, synthetic fertilizer and more powerful farm equipment, the productivity of farmers in the West and Asia has stayed so far ahead of population growth that prices of corn and wheat, adjusted for inflation, had dropped 75% and 69%, respectively, since 1974. Among other things, falling grain prices made food more affordable for the world's poor, helping shrink the percentage of the world's population that is malnourished.

The recent grain drain has stirred a new set of worries in the developing world. Developing nations used to complain their farmers were hurt by rich subsidies offered to producers in the U.S. and European Union, which encouraged price-depressing gluts. Now, their concern is shifting to how sharply high grain prices will erode the buying power of the world's hungry.

Humanitarian groups are cautioning that their budgets for food aid won't go nearly as far as they did in the past. Roughly 200 million of the 850 million malnourished people in the world's poorest nations receive some food assistance. "My major concern is that we will lose ground against hunger," says Josette Sheeran, executive director of the United Nations' World Food Program.

That outlook is increasing the urgency of nascent efforts to end foot shortages in sub-Saharan Africa, the one region in which hunger is worsening. "I think we are going to be facing a food crunch," says former U.N. Secretary-General Kofi Annan. "So we have to really take charge and begin to produce our own food," Mr. Annan, a Ghanaian, said during an interview at his Geneva office, where he heads a push by the Bill & Melinda Gates Foundation and Rockefeller Foundation to help bring to Africa the agricultural revolution that spread across Asia and Latin America decades ago.

U.S. farm exports, meanwhile, are climbing, dousing the fears of just a few years ago that the U.S. farm sector was on the verge of generating a trade deficit. Agriculture Department economists expect exports to hit a record $79 billion in the fiscal year ending Sept. 30, up 15% from last year.

For food-company executives, life is getting more complicated. "One year it's oil, the next it's grain," says General Mills Inc. Chief Executive Kendall Powell. "But it's all underpinned by one thing: strong global demand for those commodities." The Minneapolis food giant, which had sales of $12.4 billion in its latest fiscal year, expects raw-material costs in the fiscal year ending in May to jump $250 million, mostly due to costlier farm commodities.

To cope, General Mills is shrinking the size of its breakfast-cereal packages, effectively raising the price per ounce. At a Dominick's supermarket in suburban Chicago, a 15.6-ounce box of Wheaties recently cost $5.16, more per ounce than the round steak London broil at the meat counter. Grain typically has accounted for a small part of the cost of packaged products like bread and ready-to-eat cereals.

Fast-food chain Burger King Corp. is importing more grass-fed beef to make its U.S. hamburgers, and its Asian outlets are switching to french fries made from cheaper New Zealand potatoes rather than Washington state spuds.

So far, the burden of higher grain prices is falling heaviest on small businesses, which don't have the wiggle room that large companies do.

Hit by a 35% increase in wheat-flour costs since December, Michael Kalupa, owner of Kalupa's Bakery in Tampa, Fla., said he has put off plans to buy a new walk-in refrigerator. "Guys like us pretty much have to bite the bullet," said Mr. Kalupa, president of Retail Bakers of America, a bakers trade group. 9-28-07

(TIME)
By Krista Mahr/Hohhot

Kevin Timberlake digs the toe of his cowboy boot into the caked earth and gives the coffee-colored dirt a scuff. Some 70 acres of scrubby land spread out in front of him under the washed-out blue sky. "See the soil. This is junk," Timberlake says. Under his breath, he counts a thin herd of cattle hanging their heads over the weeds. Once a horse trainer and breeder in Missouri, Timberlake now spends his days thinking about cows, and this time next year, he and his employer, Western Cattle Company, would like to see about 10,000 more living on this land. "I'd be taking the ground and turning it into something," he says.

Timberlake's dusty patch is not in Missouri - it's in China. Earlier this year, Western Cattle started to raise Holsteins on an American-style ranch and feedlot built in the wide open spaces of Inner Mongolia. Their goal: deliver truckloads of well-marbled beef to the waiting plates of urban China's growing middle class. With a target herd of 75,000, U.S.-based Western Cattle has the potential to be the leading company in the third-largest beef-producing nation in the world. And if the company's Western take on raising cattle catches on in the East, it could kick start the consolidation of China's disorganized beef-production chain, bringing to Inner Mongolia all the high-volume efficiency - and social and environmental concerns - that go with big agriculture.

A few years back, China wasn't much of an attraction for cattlemen. The Chinese traditionally serve beef sparingly, usually in stir-fried dishes, stews and hot pots for which tough, lean meat suffices. But the rise of McDonald's in China in the 1990s is credited with popularizing the all-beef patty, and today upscale restaurants and hotels in major cities commonly put steak on the menu. Consumption has risen 31% in the past five years alone, according to the U.S. Department of Agriculture. "The beef market is exploding," says Western Cattle president Jim Mueller. He's not exaggerating. Owing to soaring demand, China could face beef shortages as early as next year, says the Asian Agribusiness Research Center, a situation exacerbated by a dramatic decline in pork production brought on by an outbreak of blue-ear disease earlier this year. And for now, Mueller doesn't have to worry about competition from back home. Imports of beef from America - a top global supplier - have been banned in China since mad cow disease appeared in Washington State in 2003.

Mueller and his partners chose to set up their first feedlot outside Hohhot, Inner Mongolia's capital, partly because of the local government's aggressive pro-investment policies. Among other things, officials helped the company find land and provided introductions to potential business partners. Ultimately, though, it came down to the fact that Hohhot is a cow town. Two of China's biggest dairies, Mengniu and Yili, have headquarters in the area, and buy milk from thousands of farmers who raise dairy cows in their front yards. There are more than a million cows around Hohhot; the bustling city is plastered with garish advertisements for yogurt and ice cream, and nearby farming villages have developed de facto affiliations with whichever dairy buys their milk. By offering the farmers more money for milk than they earn for crops, the dairies have helped breathe life into Inner Mongolia's struggling economy.

Western Cattle is counting on the same farmers to help them push their agenda for beef. The private company doesn't breed cows; it buys them, fattens them up on a feedlot and then trucks them off to the slaughterhouse. Today, the half million male calves born every year around Hohhot are mostly sold to blood-serum companies that render the animals' plasma into products such as cosmetics. Timberlake, who is the on-site manager for Western Cattle in China, has been going head to head with serum companies since he arrived six months ago, hitting the dairies and villages with competitive offers for calves. The rangy 48-year-old, who has a salt-and-pepper moustache and shock of white hair, says he thinks he's offering the farmers a good bargain, but the deals he makes have got to be win-win. "We're here to do a service and to make money," he says. "We're not over here for our health, or I wouldn't be breathing smog."

Farmers are no less pragmatic about their relationship with the cattle buyers and big dairies. In the village of Bingzhouhai, the whims of the market rule the daily rhythms of life. Every morning, farmers who live in courtyard-style homes walk their cows past the patches of lettuce and squash gardens to the small milking station that Yili operates there. Before dairy became a local industry, people used cattle to plow the fields, but there was a better living to be made selling milk than grain. Now, that seems to be changing. "The price of feed is going up, but the milk price is stable," says He Erwen, a farmer who lives in Bingzhouhai with his family of seven. Though his cows cost more to feed now, he's keeping them with hopes that milk prices will climb, restoring his profits. As for the prospect of selling his surplus male calves to a newcomer like Western Cattle, He laughs. "Depends on the price."

Some worry that the livelihoods of small farmers will be threatened as Inner Mongolian agriculture modernizes. Western Cattle is providing farmers with an additional source of income, and the farmers are providing the company with inexpensive labor. But big feedlots in the U.S. are essentially factories, much larger than the biggest in China today, maintaining herds of tens of thousands of animals supplied by dedicated cattle ranches. As the industry grows, farmers could be squeezed out. Even now, they are at the mercy of middlemen like the dairies, which have some control over pricing. The farmers have none. "Only the big companies have the power," says professor Jiang Gaoming, a plant biologist with the Chinese Academy of Sciences.

No one expects China's beef industry to be transformed overnight. Others have tried Western production methods and failed. Steffen Schindler, a German butcher who runs two Beijing restaurants and a small meat plant, oversaw the first feedlot and slaughterhouse to sell hamburger meat to McDonald's in China. That joint venture went under after a local company set up a competing operation nearby. But as China keeps growing, Schindler thinks it's inevitable that the mom-and-pop industry will coalesce into large operations. "You cannot meet the demand if you're doing it the old-fashioned way," Schindler says.

Still, if more feedlots like Western Cattle's crop up around the country, communities can expect to deal with a new set of problems. Disease outbreaks in concentrated animal populations can be devastating. Even if the cows and their meat are well monitored and safe, feedlots foul the air and can be a source of water pollution. Growing the massive amount of corn needed to feed herds also means fertilizer and pesticide runoff in water supplies, and trucking feed and meat around the country is a big carbon emitter. Wen Bo, China program director with the NGO Pacific Environment, acknowledges that China's cattle industry needs modernization, but says slapping an American model onto the Chinese landscape won't work. "The situation in China is completely different," he says. "In many rural areas, they do not have the infrastructure for environmental treatment." To mitigate damage, Wen says, big companies and governments will need to invest in the communities they're developing, including funding for programs that help displaced farmers find new lines of work. Without investment, "the booming beef and cattle industry would mean the destruction of the community and environment they rely on," says Wen.

Officials in Hohhot don't see it that way. In the past seven years, the city has almost doubled in both population and physical size, a trend that's in keeping with Inner Mongolia's recent double-digit growth rates. Officials welcome Western Cattle's feedlots as a way to use marginal land, create jobs and produce more food. "If we have a very good feedlot here, it will help people become wealthy," says Teng Guiyuan of Hohhot's Bureau of Investment Attraction. "Small farmers want to make money, but they aren't powerful enough. They need a big company to lead the way."

The whole of China is wrangling with how to develop industry responsibly. But for a farmer like He, the question gets drowned out by how his seven cows are going to make the most money for him and his family. Officials like Teng are busy trying to figure out how to ensure their province does not get skipped in China's race to prosperity.

Timberlake, meanwhile, is buried in the day-to-day realities of getting a business off the ground - choosing a new site for the next feedlot and ranch, getting the word out that he's in the market for cattle, and preventing disease outbreaks in the herd. "Every time you try something new, you have your naysayers," Timberlake says. But he insists Western Cattle is offering Inner Mongolian farmers a better way of life - and some nice, juicy steaks, too. 9-27-07