"Traditionally, China had been a market for bulk commodities. Obviously it's still a very important market for U.S. soybeans, but we've seen tremendous growth in consumer-oriented foods," said Sindelar, citing urbanization of the Chinese population and an ever-growing middle class with more disposable income.

In comments to Michigan Farm Bureau members and others on a Sept. 1-15 China trade study tour, Sindelar said ATO's analysis of import trends for the processing, retail, and hotel, restaurant and institution (HRI) sectors suggest U.S. producers may need to take another look at the Chinese marketplace.

"We need to be focused in our approach. We need to understand what we have to offer and how we can get it into specific segments of the market," Sindelar advised. "Our enthusiasm for the Chinese market needs to be balanced with a realistic look at the opportunities."

Calling the growth potential in the processing sector "tremendous," Sindelar said China currently processes only 25 percent of its agricultural production, compared to 80 percent for most countries. "Exports in the food processing sector have grown an average of 14 percent annually, based on output value since 1981 - that's a 20-year track record of double-digit growth," he said. "China's gross value in the food processing sector in 2000 was $80 billion, while the U.S. value was $458 billion, so there's just tremendous potential here in China."

The "Retail Revolution" has also seen phenomenal growth in China, according to Sindelar, adding that the traditional "wet markets" (farm markets) are quickly falling out of favor for "hypermarkets" including Wal-Mart, Sam's Club and Metro, which are notorious for large volumes and low costs. On the other end of the spectrum, Chinese convenience stores, which are actually small supermarkets, are becoming prevalent, with stores such as City Mart located on nearly every block in Shanghi.

"We see the retail market growing at both ends," Sindelar said. "We're going to have these huge hypermarkets and small-scale convenience markets. The middle area is going to have a hard time competing as what we call supermarkets, stores such as Giant, Safeway, and Kroger. They're going to have a very hard time competing in China."

Turning to the HRI sector, Sindelar says sales growth has almost doubled since 1998, with 15 percent annual growth in each of the last 10 years. "This is where we really see just tremendous potential," he said. "Consumers in Shanghi and other urban consumers are starting to face the same lifestyle pressures as U.S. consumers - two-income families, not a lot of time, and a need for convenience. The opportunities in this sector will run the gamut from very basic institutional type foods to very high quality, five-star type restaurants."

Case in point is the growth in U.S. red meat exports to China. Calling red meat one of the "rising stars" in consumer-oriented food exports to China, Sindelar said 2001 was a record year for U.S. beef exports to China.

"For 2002, just six months into the year, we're already up 40 percent on a record last year. That's simply tremendous," he said. "We're seeing some real growth in this sector, which means higher valued products, (hence) better returns for our farmers and our businesses."

According to ATO figures, American agriculture has been leading the way in the battle for consumer-oriented food sales to China, capturing 33 percent of the market share last year. However, competition from Australia and Canada is escalating.

"We're not the only ones trying to increase imports to China," Sindelar warned. "In fact, the biggest competition is from China's own domestic agriculture."

What's driving the market shifts?
Sindelar said the liberalization of China as it moves away from a centrally organized and command economy under a communist system to a more market-oriented society is leading to significant changes throughout the country. High on the list, he said, is the urbanization of the general population, which is still pegged as 69 percent "rural."

"The urban middle class of China is now estimated at more than 350 million people," Sindelar said. "Analysts believe that more than 200 million of these consumers can purchase U.S. food products on a regular basis - 200 million people; that's more than the U.S. population!"

Continued growth in China's Gross Domestic Product, which has averaged 7 percent to 8 percent for several years, is also expected to continue. And while that growth is concentrated primarily in urban areas along the eastern China coast, it will allow more urban consumers to purchase high-value, high-quality food products.

"The Chinese diet is shifting as incomes rise," Sindelar said. "People are moving away from the traditional grain-oriented diets and shifting to more meat, more fruit, and more vegetables. There's also a growing recognition for brands now, particularly U.S. brands, which is reflected in higher volumes and values of U.S. exports to China."

Despite all the good news, Sindelar warned that a stable transition within China from a rural to an urban society must be backed by substantial foreign investment. "We estimate that, on each day, there is $12.5 million of foreign investment just in Shanghi alone," explained Sindelar.

China's entrance into the WTO could help maintain the investment momentum, due in large part to China's desire to be recognized as an internationally integrated economy that provides improved rule of law, along with credit and banking reforms.

"It's going to take a while for the real benefits of WTO to accrue to us. The risk to us is that they move into other trade-distorting practices, much like we saw with soybeans and poultry," Sindelar said. "WTO won't be the end of the challenges we face in this market, but it does provide a starting point for some ground rules and a process to resolve them."

"I'm a mom, and I take my kids to the beach, too," said Connie Kramer, who operates the 160-cow dairy with her husband Terry. "I always tell people that I'm a mom first, and then I'm a farmer. So I'm not going to do anything in the name of farming that's not right for families or for people in general."

Kramer represents a growing movement of Michigan Farm Bureau (MFB) members who are choosing to reassess their farm management practices in order to earn state verification as "environmentally assured." The program they're doing it through is the voluntary Michigan Agriculture Environmental Assurance Program (MAEAP).

Now targeting livestock operations, MAEAP has farmers complete plans that assess everything from how manure is hauled to how farm inputs are stored. If a plan meets standards developed with input from agricultural groups, the state recognizes the farm as MAEAP-verified.

In some cases, a farmer would have to make many improvements before earning MAEAP verification. In other cases, it might simply be a matter of documenting and verifying existing good practices of a farmer.

Currently, there are 10 MAEAP-verified farms, said Jan Wilford, who manages the program through the Michigan Department of Agriculture's Environmental Stewardship Division.

Estimating the number of producers currently working toward MAEAP verification is difficult because "there's no formal registration process," until a farm requests state verification, Wilford said. But more than 1,200 farmers and environmental resource people have attended MAEAP educational sessions and about 200 farmers worked on a Comprehensive Nutrient Management Plan - the core element of MAEAP - during meetings with Michigan State University Extension specialists this past winter, Wilford said.

The state hopes to have 85 percent of all livestock production participating in MAEAP by 2005. MAEAP systems still to be launched will focus on crop production and farmsteads, providing opportunities for additional farmers to join the movement.

Reasons for wanting to become MAEAP-verified vary from producer to producer, but Kramer sums up a common theme of wanting to be known as a "good neighbor farm."

"In this day and age, farmers have to be proactive rather than reactive," she said. "(Through MAEAP) we finally have agencies working on our behalf with our best interests at heart and the best interests of the environment at heart. They've developed creative incentives that are going to help us be better managers and to be more effective in pollution control."

Changes in store for the Kramer farm include adding a filter strip near the cattle feed storage area to collect any rainwater runoff. The strip will be beneficial, explained Kramer, because the wildflowers and grass varieties that will be used are ones that can utilize the nutrients in the runoff.

Rob Richardson's 3,500-head hog nursery and 2,000-acre Kalamazoo County farm was MAEAP-verified this summer.

A new environmental safeguard that Richardson learned through the CNMP development process was a better way of handling medical wastes. Instead of simply collecting used veterinary hypodermic needles in a bucket and periodically disposing of them, Richardson now seals the used needles in concrete - a safer disposal method.

"We've had real good positive feedback from both the farm community and the non-farm community," said Richardson of his farm's MAEAP verification. "They think it's great that there are people out here who are working to try to do things better to manage nutrients on the farm."

Pat Albright - one of the MFB state board members developing a CNMP for eventual MAEAP verification - hopes he'll receive the same response in his community and be a role model for additional farmers to get on board.

"Our Branch County farm sites are relatively close to lake populations, and we own lake property ourselves," said Albright. "So the concern about surface water and contamination is on our minds all the time ... Participating in MAEAP is just the right thing to do."

Albright's currently in the process of developing a CNMP for property northwest of Coldwater where he has a 600-head hog finishing barn and is adding a second finishing barn of the same size. He plans to develop a CNMP for his home farm south of Coldwater and hopes to have the Branch and Hillsdale County farmers he contracts with to raise 6,000 to 7,000 head of swine annually become active in MAEAP, too.

Albright said MAEAP should give him public recognition for the proactive, "good neighbor" deeds he's already doing, such as avoiding hauling manure on weekends and busy holidays.

And the program is a management tool to find more ways to utilize manure as a valuable resource on the farm, he said. "If I look at manure not as a waste but as a fertilizer source, then from a simple economic standpoint I don't want it to leave my field because I'm not going to get the value out of it," he said.

Concluded Wilford: "Being proactive and looking comprehensively at a farming operation are two crucial elements to preventing agricultural pollution, and they're also key to describing MAEAP.

"Through MAEAP, producers first learn about potential impacts of their livestock system on the environment. Then they assess their own farm, working with local resources to evaluate current practices and to develop a plan for future actions. Only with producer action and involvement in their management plan can we hope to see long-term change and adoption of new techniques.

"MAEAP not only links producers with the best local resources for their specific operation, it also provides an objective look at implementation to verify that concerns have been adequately addressed."

Sometime between Thursday night and Friday morning, research materials, including small samples of bacteria used to develop swine vaccines, were taken from the Biomedical and Physical Sciences Building. The stolen material is Actinobacilllus pleuropneumoniae, or APP, a bacterium in swine that can cause serious respiratory infection in young pigs, encephalitis and rapid pig mortality.

The bacterium is not a threat to humans, either by direct contact with the agent or by eating meat from an infected animal. APP, however, is of concern to the pork industry, which is why MSU has been working to develop vaccines to protect swine and why the theft prompted the U.S. Department of Agriculture's Animal and Plant Health Inspection Service and the National Pork Board to issue a precautionary advisory to hog producers in Michigan and throughout the country.

"There are no known reports of APP," said Ernie Birchmeier, Michigan Farm Bureau (MFB) livestock specialist. "But hog producers and veterinarians should pay specific attention to swine populations and be alert to any unusual symptoms in pigs, such as encephalitis, acute pneumonia and sudden death."

Birchmeier stressed that rapid diagnosis is critical to minimizing the bacteria's impact since the disease can be treated with injectable antibiotics. Vaccines are also available as a preventative measure.

While MSU Police Chief Jim Dunlap said there is no indication that the theft was related to political activism, Birchmeier advises all hog farmers to evaluate their security measures. "That could be as simple as checking door locks and making sure facilities are properly lit," he said.

According to APHIS, while there are some reports of APP swine infection via contaminated clothing or airborne transmission, most cases of infection occur by nose-to-nose contact after the introduction of infected carrier pigs.

Clinical signs of the endemic strain of APP are difficulty breathing, fever, reduced appetite, and rapidly occurring death, APHIS reported. Cough and, in some cases, frothy and blood-stained nasal discharge can also be seen.

"Producers should be vigilant but not panic," cautioned Sam Hines, executive director of the Michigan Pork Producers Association.

The National Pork Board is urging producers to "go on a heightened state of alert" and do the following:

• Review the farm's biosecurity and security plans. The Pork Checkoff-funded Biosecurity Guide and Security Guide are available online at www.porkboard.org or by calling (800) 456-PORK.
• Report any suspicious activity or people around a farm to local law enforcement officials.
• Alert a veterinarian to any unusual health situation on the farm.

The grants were awarded under the state's Julian-Stille Value-Added Agricultural Development Act. Created two years ago, the Act aims to enhance the overall value of Michigan-grown commodities through food or agricultural processing activities.

Initial funding was made possible due to a one-time federal appropriation from the U.S. Department of Agriculture with the stipulation that the money be allocated for projects involving Michigan's specialty crops. Specialty crops are generally fruits and vegetables, but are specifically defined as any agricultural crop except wheat, feed grains, oilseeds, sugar beets, cotton, rice, peanuts and tobacco. Livestock and poultry were also ineligible for grants this funding cycle.

Under the Act, competitive grants were available in four categories: 1) marketing research and technical assistance, 2) detailed business plan development, 3) utilization of innovative technology, and 4) various land, facility, equipment or infrastructure development.

Grant applications were evaluated, scored, and ranked by both Michigan Department of Agriculture (MDA) and independent, third-party review teams according to several criteria established by the Act. According to MDA Director Dan Wyant, 75 applications were received with requests totaling $4.5 million.

"The response for the competitive grants was overwhelming, highlighting the agriculture industry's commitment and desire to help develop or strengthen its markets and add value to the commodities Michigan grows," said Wyant.

"All of the projects had merit, but with limited resources only the top proposals could be selected," he added. "We encourage those that couldn't be funded to work with the Department's agriculture development staff and others to identify potential funding resources."

Projects selected to receive funding are:

• Category 1 - Marketing Research and Technical Assistance
  • Michigan Apple Committee, DeWitt - $47,500 to conduct marketplace research for fermented and distilled Michigan apple beverages.
  • Leelanau Fruit Co., Suttons Bay - $45,000 to develop a brandied cherry product targeted to both the domestic and international baking industry.
  • Great Lakes Glads, Inc., Bronson - $41,500 to conduct market research to determine the potential for flowering potted peonies.
  • Michigan Cherry Committee, DeWitt - $40,000 to determine extended potential for a new Michigan Balaton tart cherry.
  • Michigan Grape and Wine Industry Council, Lansing - $30, 000 to develop web-based resource manual for existing and potential Michigan vintners and wineries.
  • Asparagus Enterprises, Inc., DeWitt - $25,000 to provide technical assistance for launch of new product line, "Chunky Asparagus Salsa."
  • Chateau Chantal, Old Mission Peninsula - $20,000 to develop a pilot "Great Lakes Wine Academy" to partner with local community college culinary school to teach consumers wine characteristics and pairing with foods.
  • SubTerra, LLC, White Pine - $15,000 to conduct research on potential markets for re-utilizing the White Pine Mine as a biosecure growth chamber for plants.
  • Cherry Marketing Institute, DeWitt - $10,000 to identify positioning strategies for high value, new Michigan Balaton tart cherries.
  • Michigan Potato Industry Commission, DeWitt - $10,000 to conduct comprehensive research on the potential for a potato hydration plant.
  • Uncle John's Cider Mill, St. Johns - $2,500 to provide technical assistance for the development of a pilot, small scale fermented apple beverage production facility.
• Category 2 - Business Plan Development
  • 21st Century Alliance of Michigan, Ubly - $50,000 to develop a business plan for an integrated and coordinated dry bean supply chain.
• Category 3 - Utilization of Innovative Technology
  • Great Lakes Packing Co., Kewadin - $50,000 to develop technology capable of recovering and recycling cherry juice lost in the pitting process.
  • Michigan Apple Committee, DeWitt - $50,000 - to apply technology for the production of fermented apple beverages.
  • Sills Farm Market, Lawrence - $50,000 to adapt technology to enable production of fresh cut apple slices.
  • Great Lakes Glads, Inc., Bronson - $28,925 to utilize software that will allow for partnerships with non-profit fund-raising organizations in the sale of flowering, potted peonies.
  • St. Julian Wine Co., Paw Paw - $28,800 to apply technology for the construction of wine barrels made of Michigan white oak.
• Category 4 - Land, Facility, Equipment or Infrastructure Development
  • Leelanau Fruit Co., Suttons Bay - $75,000 for the purchase of equipment and infrastructure to re-open the Buckley, MI sweet cherry processing facility
  • Peterson Farms, Inc., Shelby - $75,000 for the purchase of state-of-the-art equipment to increase value-added fruit juice processing capacity.
  • Stokes' Blueberry Farms and Nursery, Grand Junction - $75,000 to purchase equipment allowing for the grading and sorting of fresh blueberries.
  • Honee Bear Canning, Lawton - $72,750 for the expansion and renovation of the company's fresh asparagus line.
  • Rocky Top Farms, Ellsworth - $71,300 for the expansion of the processing and packaging operations at the family fruit orchards.
  • Great Lakes Glads, Inc., Bronson - $56,250 for the construction of a production facility for flowering, potted peonies.
  • Crosby Mint Farms, St. Johns - $45,000 for the purchase of mint processing equipment.
  • JD Farms, Rogers City - $37,500 for the development and construction of a specialty, edible bean milling and bagging facility.
  • Black Star Farms, Suttons Bay - $33,000 to expand the winery's distillery operations.
  • St. Julian Wine Co., Paw Paw - $30,400 for the purchase of fermenting processing equipment to produce premium wines from Michigan-grown red Vitis vinifera grapes.
  • Northern Michigan Natural Growers, LLC, Kaleva - $24,575 for the purchase of equipment to produce premium organic fresh pressed fruit and vegetable juices.

Netting nearly $155,000 for the youth exhibitors and scholarship funds, the 2002 auction easily surpassed the $1 million mark for gross sales since 1996, according to Michigan Department of Agriculture (MDA) Director Dan Wyant. As well, more market steers, lambs, and hogs were shown than recorded previously, and more than 200 youth competed in various skill events.

The Michigan Youth Livestock Scholarship Fund, now in its third year, granted six $1,000 scholarships and $21,000 in educational awards to more than 120 youth livestock exhibitors in skill contests, said Ernie Birchmeier, MFB livestock specialist and Michigan Youth Livestock Scholarship Fund President.

For more on scholarship recipients and top auction items, consult the MDA Web site at www.michigan.gov/mda.

Contact: Ernie Birchmeier, (800) 292-2680, ext. 2024

The EDEN survey will be conducted from Sept. 1 through November. To take the survey, producers may visit the EDEN Web site at http://www.agctr.lsu.edu/eden and click on "Homeland Security Surveys," then click on "Survey of Ag and Horticulture Producers." The survey is anonymous and takes less than 10 minutes to complete. It can be taken anywhere producers have access to the Web, including libraries and Extension offices.

"There are factors concerning agriculture that lead experts to disagree about whether or not farming and the food supply are at risk to bioterrorism," said Steve Cain, EDEN delegate and Purdue University Cooperative Extension Service specialist. "Whether or not there is a real threat to the American food supply, the risks bring up issues that society must deal with."

A local interviewer from the Michigan Agricultural Statistics Service will contact vegetable producers to gather information on vegetable crop chemicals used, acres treated, and rates applied. Data collection will begin Oct. 7, and end Dec. 6. Data will be gathered from more than 600 vegetable growers in Michigan. Individual grower information is strictly confidential and individual reports are combined to set state and national estimates.

The Michigan Department of Agriculture has agreed to grant one credit of private pesticide recertification credit to those operators who complete the survey, which is conducted every other year.

The survey results are official U.S. Department of Agriculture estimates and help establish the facts about chemical use in agriculture. Accurate and timely information on actual usage is used in the decision-making process for the Food Quality Protection Act which has an impact on the product registration, re-registration, and product alternatives. This information also helps to justify and support section 18 applications.

The National Agriculture Statistics Service will publish the resulting state and national estimates of vegetable growers' use of agricultural chemicals in July 2003.

"The board administers soybean promotion and research programs to enhance domestic and foreign markets for soybeans and soybean products," said Secretary of Agriculture Ann M. Veneman. "I am pleased these individuals have agreed to provide their time and expertise to serve on this board."

The 62-member board is authorized by the Soybean Promotion, Research, and Consumer Information Act.

The U.S. Department of Agriculture (USDA) selected the appointees from soybean producers nominated by Qualified State Soybean Boards.

USDA's Agricultural Marketing Service monitors operation of the board.

New York-based Gourmet Impression has invented two hand-held tools that allow restaurants, caterers and other food businesses to turn pizzas into edible advertisements. The "Stamper" and the "Roller" allow companies to emboss their logo or advertising messages on food. Initial prototypes are designed for pizzas, calzones, bread sticks, cheeses, melons, white bread, pita breads, brownies, pies, butter sticks and baked potatoes, the company said. The Stamper tool works like a rubber stamp and easily and quickly embosses a text message or an image into a food item. Everything from personalized 'Happy Birthday' messages to advertisements and company logos can be embossed within seconds.

The Korean market has increased 600 percent over the past few years, and the United States supplied 64 percent of the $14 million pet food exports to Korea in 2000. Over the next few years, the pet food market is expected to grow 15 percent to 20 percent annually, according to the Mid-America International Agri-Trade Council and Food Export USA-Northeast.

According to the Mid-America International Agri-Trade Council and Food Export USA-Northeast, South Korea is the sixth largest U.S. export market, importing more than 70 percent of its agricultural needs. 2002 growth rates are expected to exceed 2001 U.S. agricultural import totals of more than $3.3 billion. Primary opportunities for growth include fresh, processed, and frozen fruits and vegetables; healthy food; home-meal replacements; snacks; confectionaries; and dairy products.

Editor's Note: For more information, contact Michigan Department of Agriculture spokeswoman Sara Linsmeier-Wurfel at (517) 241-4282.