under siege - CLFPclfp.com/documents/nv/nv2011edition2_web.pdfVIBXPERT® II & Geometric Measurement...

T h e V o i c e a n d a d V o c aT e f o r T h e c a l i f o r n i a f o o d P r o c e s s i n g i n d u s T r y

e d i T i o n 2 , 2 0 1 1

addiTional chemicals associaTed wiTh Processed

foods added To ProP 65 lisT

under siege

CordeliaRoad

Chadbourne Road

Downtown

42 Miles to Sacramento

38 Miles to I-5

45 Miles to San Francisco

Fairfield

CordeliaRoad

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Rail Line

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±52.4 Acres

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±46.8 Acres

Rail Line

U P TO ±99.2 A ±2 AC R E S

G A T E W A Y 8 0 B U S I N E S S P A R K | F A I R F I E L D , C A

Solano Community College±4.5 miles from site

U.C. Berkeley±36 miles from site

Stanford University±73 miles from site

SFO Intl. Airport±56 miles from site

OAK Intl. Airport±47 miles from site

SITE

Port of Oakland±40 miles from site

U.C. Davis±30 miles from site

PROJECT HIGHLIGHTS:• Zoned for Industrial, Manufacturing and R&D Type Uses

• Excellent Street Frontage; Flat Topography• Fairfield Features Two State-of-the-Art Water Treatment Plants, Providing Extensive Water and Sewer Capacity ideal for Food and Beverage Industries• Access to 12,000 Volts & 115,000 Volt Electrical Transmission Lines• Business-Friendly City Supportive of New Development; Streamlined Building Approval Process• Primary Exits from Interstate 80 and Highway 12 are Designated as STAA Terminal Access Routes• Affordable Labor Pool in Solano County and Surrounding Areas & Affordable Housing for Employees• Located in Fairfield’s Premier Business Park Featuring Companies such as Jelly Belly, Anheuser Busch, Guittard Chocolate, Calbee, Amcor Packaging & Meyer Cookware

LOCATION, LOCATION, LOCATION...

Gateway 80 Business Park is conveniently located in Fairfield, California, adjacent to Highway 12 and Interstate 80; Interstate 680 is only a few miles to the west. Fairfieldis near several transportation junctions and almost equidistant between San Franciscoand Sacramento. This strategic location allows Fairfield to draw from a tremendous local labor pool serving the greater Bay Area Region.

w w w . g a t e w a y 8 0 b u s i n e s s p a r k . c o m

FOR MORE INFORMATION CONTACT:Glen Dowling, Matt Bracco, Chris NeebCushman & Wakefield (707) 421-2900

California League of Food Processors 1

In Every Issue

5 President & CEO Message26 Regulatory Report28 Legislative Update 58 New Members

E d i t i o n 2 , 2 0 1 1

Features

8 2012 CLFP Expo & Showcase of Processed Foods 16 Fall Board of Directors' Meeting 20 CLFP Supplier Host Council Golf Tournament 24 CLFP Inducted into California Agricultural Heritage Club

34 Twist & Shout Do voters know what's really killing California?

38 Measuring Success: Assembly Bill 333 44 California Air Resources Board AB 32 Cap-and-Trade Program Summary

50 CLFP Scholarship Program 2011-2012 Recipients Updates from past Recipients

305-591-8935 • www.ludeca.com

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2 news & Views magazine Edition 2, 2011

clfP Board of DirectorsChairDoug Burroughs, Del Monte Foods

First viCe ChairTracy Mihas, Kraft Foods

seCond viCe ChairVaughn Koligian, Sun-Maid Growers of California

Bell-Carter Foods, inC. Ken Wienholz

CaliFornia Fire-roasted, llCKirk Bewley

CampBell soup supply Company Timothy Gruenwald

Conagra FoodsPat Coe

Culinary FarmsKirk Bewley

del mar Food produCts Corp.P. J. Mecozzi

del monte FoodsDavid Withycombe delallo italian Foods, inC.George Hoag diana Fruit Co., inC.Eugene C. Acronico

Frito-lay, inC.Scott Kinghorn

gFF, inC.Farrell Hirsch

gills onions, llCSteven H. Gill

giulianos’ speCialty FoodsCorey Giuliano

h. J. heinz CompanyScott Ruffe

haliBurton international Corp.Jesse Cabral

hilmar Cheese CompanyBurt Fleischer

ingomar paCking CompanyGregory R. Pruett

J.g. Boswell tomato Co. llCDave Johnson

kagome, inC.Ann Hall

kraFt FoodsTracy Mihas

los gatos tomato produCtsStuart Woolf

mad will's Food Company, inC.Gilbert Hilleary

mariani paCking Company, inC.George Sousa, Sr.

the morning star paCking Co.Chris Rufer

musCo Family olive Co.Janet Edwards

nw paCking/san Benito FoodsSteve Arnoldy

olam spiCes & vegetaBle ingredientsChristoph Rudolf

paCiFiC ChoiCe Brands, inC.Allan Andrews

paCiFiC Coast produCersDan Sroufe

patterson vegetaBle Company llCEric Schwartz

satiCoy Foods Corp.Glen A. Fischer

seneCa Foods CorporationTim Nelson

sensient dehydrated Flavors llCPat Laubacher

smuCker Fruit proCessing Co.Al Yamamoto

stanislaus Food produCtsTom Cortopassi stapleton-spenCe paCking Co.Brad Stapleton

sun-maid growers oF CaliForniaVaughn Koligian

sunsweet growersMelvin Ward

supherB FarmsMike Brem

teasdale Quality FoodsMelanie Jones unilever supply Chain, inC.Randall Ledet

v s p produCts, inC.Robert Benech

wawona Frozen FoodsWilliam S. Smittcamp

west Coast produCtsDan Vecere

wilBur paCking CompanyRichard R. Wilbur, II

www.benzair.com | 888.203.7224

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edition 2, 2011May 2011 - October 2011

editor Amy Alcorn

layout & designAmy Alcorn

Content editorAllyson Rathkamp

ContriButing writersTrudi HughesJohn LarreaRob NeenanTony Quinn

Ed Yates

news & views is puBlished semi-annually By:

The California League of Food Processors1755 Creekside Oaks Drive, Suite 250

Sacramento, CA 95833Phone: 916-640-8150

Fax: 916-640-8156Email: [email protected]

For most recent updates, please visit our website:www.clfp.com

FRont CoVER:Brass Scales Isolated provided by iStockphoto

Artwork by Marissa Derengowski

Contents © 2011. All rights reserved. No part of this magazine may be reprinted in whole or part without written permission of the publisher.

The Future is Now.

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Source: Euromonitor International :"Canned/preserved Food Packaging-US" Report, January 2011


President & CEO Message

One of several significant issues confronting the food processing industry in California and elsewhere was highlighted at CLFP’s 2011 Fall Board of Directors meeting. Special presentations were made on California’s “Safe Drinking Water and Toxic Enforcement Act of 1986”, otherwise known as Prop 65. They pointed to the increasing concerns with Prop 65’s enforcement experience and state government activity related to identifying chemicals.

These concerns are the result of additional chemicals associated with processed foods being added to the Prop 65 list and the increased focus on food in Prop 65 litigation. One could agree that in large parts foods are under siege by the attorney general’s office, private citizen/bounty hunter attorneys and Cal-EPA’s office of Health Hazard Assessments. Some chemicals of note include lead, pesticides, mercury, acrylamide and sulfur dioxide. These concerns were heightened recently by the filing of a lawsuit against 28 specific processors and retailers. The suit alleges these defendants failed to warn Californian’s that they and their children are exposed to lead when they eat fruits and fruit juices and fruit and vegetable baby food. Lead is listed as both a carcinogen and a reproductive toxicant by the state. For reproductive toxicants, Prop 65 provides a unique and unscientific level of exposure limit – 1,000 times lower than food regulatory limits. This means that food otherwise safe and suitable for consumption under federal and state food safety limits can be subject to Prop 65’s warning requirements if a reproductive toxicant is detected at a level within a 1,000 fold range below a safe level. Quite a predicament.

Although this predicament has been evident for the past 25 years of Prop 65’s existence, efforts to replace the arbitrary safety limit with science based safety/risk factors have failed. This is due to the limitations to changing Prop 65 which provide only for a new ballot initiative or a 2/3 vote of the legislature and only if changes are “in furtherance of the act”.

CLFP will continue its efforts to remain engaged on Prop 65 issues as appropriate and join with others in seeking a science based solution to the reproductive toxicant predicament.

Companies who value their own longevity and the integrity of their products turn to us for their most challenging packaging and processing demands. They know they can expect comprehensive, turnkey solutions from us: solutions that build their plants, package their products, upgrade their systems—and increase their profits— on time and on budget..

NMI’s vast experience within the food & beverage industry delivers sweeping capabilities that few other industrial contractors possess: a 50,000-square-foot Sacramento-based plant. Access to the finest machinery on the market. The industry’s highest safety and sanitation records. Seasoned, certified technicians who develop prototypes, repair and upgrade equipment, and re-locate entire plants. 24/7 Predictive & Preventive Maintenance service.

From small-scale bottlenecks to full-scale facility installation, our unique ability to design, build and install has been helping companies process their materials, package their produce and move their products to market—maximizing their performance and maintaining their competitive edge… all at the speed of Now.

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by Ed yatesCLFP President & CEo


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Food processing is a complex industry. At Wells Fargo Insurance Services, our professionals provide the knowledge, experience, and tools to reduce the total cost of risk so our customers can focus on what they do best – manage their business.• Crop insurance• Workers’ compensation• Educational seminars• Employee benefits• Risk management services• Product contamination and

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January 31 & February 1, 2012Sacramento Convention Center

For more information, visit www.clfp.com/expo, or call (916) 640-8150


TOMATO PROCESSING SCHOOL

Register online at www.clfp.com/expo

WORKSHOP COORDINATORMark E. Kimmel, Stanislaus Food ProductsSenior VP - Total Quality and GMPsMr. Kimmel has worked in the canning industry for 35 years, with 26 years spent at Stanislaus Food Products working with canned tomatoes as QC Manager, Production Manager, VP of Operations, and Senior VP of Operations and Contract Sales. He holds a BS Degree from Purdue University in Food Science, and CCPS Degree from the Culinary Institute of America in Hyde Park, NY. He is a past President of the Food Processor’s Sanitation Association. He has received Distinguished Ag Alumni Award from Purdue in 2006, Outstanding Food Science Award in 2004 from Purdue.

COURSE INSTRUCTORSDiane Barrett, Ph.D., UC DavisDr. Barrett’s research program addresses the effects of raw material quality and processing on color, flavor, texture and nutritional quality of fruit and vegetable products.

Tom Dambak, ConsultantMr. Dambak retired after a long career specializing in aseptic processing of bulk tomato and citrus fruit products. He remains active through consulting and involvement in projects.

Steve Demuri, Campbell Soup CompanyMr. Demuri joined Campbell Soup Company in 1993 as a Senior Research Scientist in its Tomato Processing Research group at Campbell’s Research & Development in Davis, CA.

Rey Elizondo, Ph.D., California State University, FresnoDr. Elizondo is a lecturer in both the Food Science and Industrial Technology Departments at CSU, Fresno. Prior to CSU, Fresno, Rey worked for FMC FoodTech (now JBTC) for 29 years with extensive involvement in equipment design and testing, food processing system development and fruit and vegetable processing technology.

Linda Harris, Ph.D., UC DavisDr. Harris works with food producers, processors, consumers, and representatives from State and Federal Government on issues related to microbial food safety.

Mark E. Kimmel, Stanislaus Food ProductsSee above for bio.

Glenna Matthews, JBT FoodTechMs. Matthews works for JBTC and is active in the aseptic portion of the tomato industry. Her experience is based upon commissioning, training and performing audits of aseptic systems throughout California and globally.

WHO SHOULD ATTENDThe Tomato Processing School (TPS) is designed for current employees of tomato processing companies who wish to expand their knowledge of the entire operation of the business. Line operators may be familiar with one or more facets of their own processing line, however an understanding of all the unit operations involved in tomato processing, even those not presently utilized at their own facility, may be desirable.

This workshop is also intended for individuals not immediately involved in the day-to-day operations of a tomato processing facility who wish to broaden their understanding. These individuals might include management and supervisory personnel, engineers, sanitarians, research and development personnel, government inspectors and suppliers to the industry.

WORKSHOP COST Early Registration by December 16, 2011

$375.00 - CLFP Processor and Affiliate Members

$475.00 - Non-CLFP Members

After December 16, 2011

$410.00 - CLFP Processor and Affiliate Members

$510.00 - Non-CLFP Members

Registration includes: refreshments, lunch, course binder and entrance to the 2012 Expo & Showcase of Processed Foods, January 31 & February 1. Ticketed events are an additional cost.

Cancellation Policy Cancellations must be submitted in writing by Friday, January 13, 2012. Registration will be refunded less a $50.00 processing fee. No refunds will be issued after January 13, 2012. Substitutions are allowed. For more information, visit www.clfp.com.

Attendees must be pre-registered to attend.

TOMATO PROCESSING SCHOOL HOURSMonday, January 30, 20127:30 am - 8:00 am Registration open8:00 am - 4:00 pm Tomato Processing School11:30 am - 12:30 pm Lunch (included)

COURSE AGENDA

Intro to TPS • CLFP • Speakers • Coordinators • ScheduleGoals • Purpose • AcknowledgementsStatistics • Global • US • CaliforniaLab Analyses • Terminology • Dice • Paste • GradingMicrobiologyInspection • PTABVarieties • Soil/location/maturityOrganicReceivingDiced & Whole Peel • Sizing • Sorting • Peeling • Dicing • Calcium treatmentFilling Bulk • Sterilization/cooling • Bins/drum filling • Packaging Canning • Packaging • Can filling • Cookers • PalletizingPaste • Hot & cold break • Pulper/finisher • Evaporation • Aseptic processing & cooling • Filling • Storage and shipping • Railroad tests

Sheraton Grand SacramentoMonday, January 30, 20128:00 am - 4:00 pm

SPONSORS:


TOMATO PROCESSING SCHOOLOpen to all attendees. (Ticketed event)8:00 am – 4:00 pm, Sheraton Grand Hotel (See page 9 for more information)

The objectives of this course are to provide employees of tomato processing companies, and individuals affiliated with the tomato processing industry, with an overview of tomato processing from the receiving of the raw product to shipment of the final product to the customer. This workshop is designed to increase knowledge of the individual tomato processes so that each employee will better understand how they fit into the "big picture" and how they contribute to the success of their company.

Sponsored by:

CLFP BOARD & EXHIBITOR RECEPTION5:00 pm – 6:30 pm, Sheraton Grand Hotel

Hosted by the CLFP Board of Directors, this event is open only to 2012 Exhibitors. Meet one-on-one with key representatives of the California food processing industry.

Sponsored by:

KICK-OFF BREAKFASTOpen to all attendees. (Ticketed event)8:00 am – 10:00 am, Sheraton Grand Hotel CROSSING THE GENERATIONAL DIVIDE

Speaker: Jason Ryan Dorsey

Known as The Gen Y Guy®, Dorsey is a bestselling author, acclaimed speaker, and award-winning entrepreneur. He has been featured as a Gen Y expert on 60 Minutes, 20/20, The Today Show, The View, and in Fortune magazine as well as more than 100 additional media outlets. A proud member of Gen Y (who text messages his mom every day), Dorsey has delivered 1,800 keynote presentations around the world—consistently earning standing ovations from audiences as large as 13,000.

Sponsored by:

WORLD PROCESSING TOMATO COUNCIL MEETING & LUNCH (Tentative)10:00 am – 1:00 pm, Sheraton Grand Hotel

EVENTS & SESSIONSMonday, January 30, 2012

Tuesday, January 31, 2012


NCIFT ANNUAL LUNCHEONOpen to all attendees. (Ticketed event)11:30 am – 1:00 pm, Sacramento Convention Center THE TOP FOOD AND NUTRITION TRENDS OF 2012 Speaker: Dr. Clare Hasler-Lewis, Robert Mondavi Institute for Wine and Food Science, UC Davis

Dr. Clare Hasler-Lewis has been the founding executive director of the Robert Mondavi Institute for Wine and Food Science at the University of California, Davis since 2004. Dr. Hasler-Lewis is an internationally recognized authority on functional foods. From 1992-2000, she served as the founding director of the Functional Foods for Health Program at the University of Illinois (Urbana-Champaign and Chicago campuses). Dr. Hasler-Lewis has published more than 60 research and position papers, invited reviews, book chapters and bulletins and has given hundreds of lectures on diet and health in more than 20 countries. Since 2005 she has served on the Board of Directors of Chiquita Brands International, Inc. and also chairs the Food Safety, Innovation and Technology Committee. In 2011, Dr. Hasler-Lewis was honored with the President’s Award from CAST (The Council for Agricultural Science and Technology).

PG&E’S NEW ENERGY EFFICIENCY INITIATIVES FOR FOOD PROCESSORS Open to all attendees.2:00 pm – 3:00 pm, Sacramento Convention Center

Speaker: Francois Rongere, Industrial Customer Energy Solutions, Pacific Gas & Electric

Pacific Gas and Electric and the California Public Utilities Commission are promoting innovative new programs designed to provide tools, performance measures, and other resources to food processors and other industrial customers seeking to increase energy efficiency and certify advanced energy performance. Francois Rongere with PG&E will discuss the pilot Superior Energy Performance program, the new ISO 50001 International Energy Management Standard, and other options available to food processors and how your company can develop cost effective programs to save energy.

HAPPY HOUR ON TRADESHOW FLOOROpen to all attendees.3:00 pm – 4:00 pm, Sacramento Convention Center

What better way to wrap up your Tuesday than with a Happy Hour on the tradeshow floor! Mingle with other show attendees and exhibitors as you enjoy a drink or two from our fully hosted beer and wine bars. All registered attendees and exhibitors are welcome to attend. Must be 21 to drink alcohol.

Sponsored by:

EVENTS & SESSIONSTuesday, January 31, 2012 continued


EVENTS & SESSIONS

SUPPLIER HOST COUNCIL RECEPTION & SILENT AUCTION Open to all attendees. 5:00 pm – 7:00 pm, Sheraton Grand Ballroom Sponsored by a select group of industry suppliers, this event is a fun-filled evening, a great networking opportunity, and supports a worthy cause. Join hundreds of food processing representatives for a cocktail reception and silent auction. Proceeds benefit the CLFP Scholarship Fund.

GENERAL SESSION BREAKFASTOpen to all attendees. (Ticketed event)8:00 am – 9:30 am, Sacramento Convention Center

2012 TRENDS INTELLIGENCE FOR THE AGRI-FOOD CHAIN

Speaker: Sharon McNerney, Executive Vice President, Nuffer Smith Tucker Public Relations

Sharon McNerney is an executive vice president at NST and is always keeping her eyes open for trends. For the last 25 years, she has been tracking trends that will impact the future of nutrition, food and the agri-food chain. Sharon has long been known for seeing the “big picture” and has a legacy of listening and guiding people and organizations in strategies that will lead to successful futures.

ENERGY BEST PRACTICES AND PROCESSING RESIDUE ASSESSMENT FOR CALIFORNIA FOOD PROCESSORS Open to all attendees. 12:00 pm – 1:00 pm, Sacramento Convention Center Speaker: Ricardo Amon, CIFAR, UC Davis

A new ISO 50001 energy efficiency management certification program is being implemented and the value to food processors is being studied. A California Energy Commission study has been completed on assessing the energy potential from conventional and organic food processing residues. This includes not only residual byproducts, but low and high moisture materials (process/rinse water) as well. This will highlight a whole systems approach to this issue of process energy, water resources and residue management.

AB 32 CAP & TRADE UPDATEOpen to all attendees.1:00 pm – 2:00 pm, Sacramento Convention Center

Speaker: Edie Chang, Assistant Division Chief, Stationary Source Division, CARB

Update on CA Air Resources Board AB 32 Implementation effort and status of Cap-and-Trade regulation development.

Tuesday, January 31, 2012 continued

Wednesday, February 1, 2012


MORE REASONS TO ATTEND HOW TO REGISTER

Early RegularGENERALREGISTRATION By12/16/11 After12/16/11FOODPROCESSORAllFoodProcessors $35 $65

SUPPLIERCLFPAffiliateMember $55 $95Non-MemberSupplier/Buyer/Broker $110 $160

OTHERGrower $35 $65Assn/Edu/Gov’t/Press FREE FREETOMATOPROCESSINGSCHOOL(Monday,January30,2012)(IncludescomplimentaryentrancetotheExpoonJanuary31&February1,2012)

CLFPProcessorMember $375 $410CLFPAffiliateMember $375 $410Non-MemberFoodProcessor/Grower $475 $510Non-MemberFoodIndustrySupplier $475 $510EVENTTICKETS Tuesday-Kick-offBreakfast $50 Tuesday-NCIFTAnnualLuncheon $45Tuesday-PG&ENewEnergyEfficiencyInitiativesSession FREEWednesday-GeneralSessionBreakfast $50Wednesday-EnergyBestPracticesSession FREEWednesday-AB32Cap&TradeUpdateSession FREEVegetable,Fruit&NutPuttingContest $5

Expo Refund Policy: $20.00 handling fee retained for cancellations. Tomato Processing School Refund Policy: $50.00 handling fee retained for cancellations.NO REFUNDS will be issued after 1/13/12. Substitutions are allowed.

3EASYWAYSTOREGISTER1)ONLINEatwww.clfp.com/expo2)MAILcompletedregistrationform*3)FAXcompletedregistrationform**Registrationformmaybefoundonlineatwww.clfp.com/expo

CaliforniaLeagueofFoodProcessors1755CreeksideOaksDr.,Ste.250Sacramento,CA95833Phone:(916)640-8150Fax:(916)640-8156www.clfp.com

EXPOREGISTRATIONFEES&EVENTTICKETS PUTTINGCONTEST

SAVE MONEY Register by December 16, 2011

CaliforniaLeagueofFoodProcessorsOpen

Sponsoredby:

Vegetable,Fruit&NutPuttFundraiserChampionship

(Locatednexttobooth#1034)

3Puttsfor$5 1Tomato 2points 1BrusselsSprout 3points 1Walnut 4points

Winner receives the CLFP Open GoldenPutter.Winner'snameshallalsobeengravedontheCLFPPuttingTrophyandbestofall...braggingrightsforoneyear!

ALLPROCEEDSBENEFITTHECLFPSCHOLARSHIPFUND

From incoming ingredients to the final product, whether it’s juices, sauces, cheeses, snacks, nuts, seasonings, baked goods or any other items that are incorporated into your products – color plays an important role in food processing.

Does YourFood LookGood EnoughTo Eat?

color plays an important role in food processing.

With its large 50mm aperture, this highly accurate, multi-functional and user-friendly instrument is great for purees, pastes, powders, granules & larger foods.

CR-410CM-5

The versatile CM-5 Spectrophotometer is capable of both reflectance and transmittance measurements. It offers many features including a PASS/FAIL grade based on user-set tolerances.

Konica Minolta Sensing Americas wants to know…

- How does your company make color decisions?

- Are you having issues with inconsistent coloring?

- Are you looking to decrease downtime and reduce product waste?

- Would you like to increase color consistency with your supply chain or other locations?

With Konica Minolta You Can.

Konica Minolta colorimeters and spectrophotometers play a key role in increasimg quality in the food industry.

Konica Minolta offers a full line of color evaluation instruments to help ensure the color of your product meets your quality control standards.

Control quality…Measure color of your products…Translate color in numerical values…Create simple pass or fail tolerance tests…Measure raw materials through final product...Increase customer satisfaction...

To learn more about Konica Minolta and to view our full product line,visit konicaminolta.com/sensingusa

When it comes to color measurement, the world’s food industry looks to Konica Minolta.

The BC-10 Baking Meter measures the color of baked, fired and processed foods, as well as ingredients, in various environments to ensure consistency in appearance.

BC-10The CR-10 Color Reader is a very compact, battery powered, hand-held portable colorimeter for quick color control.

CR-10Konica Minolta Sensing Americas, Inc.101 Williams DriveRamsey, NJ 07446konicaminolta.com/sensingusaToll Free: 888-473-2656Outside USA: 201-236-4300

From incoming ingredients to the final product, whether it’s juices, sauces, cheeses, snacks, nuts, seasonings, baked goods or any other items that are incorporated into your products – color plays an important role in food processing.

Does YourFood LookGood EnoughTo Eat?

With its large 50mm aperture, this highly accurate, multi-functional and user-friendly instrument is great for purees, pastes, powders, granules & larger foods.

CR-410CM-5

The versatile CM-5 Spectrophotometer is capable of both reflectance and transmittance measurements. It offers many features including a PASS/FAIL grade based on user-set tolerances.

Konica Minolta Sensing Americas wants to know…

- How does your company make color decisions?

- Are you having issues with inconsistent coloring?

- Are you looking to decrease downtime and reduce product waste?

- Would you like to increase color consistency with your supply chain or other locations?

With Konica Minolta You Can.

Konica Minolta colorimeters and spectrophotometers play a key role in increasimg quality in the food industry.

Konica Minolta offers a full line of color evaluation instruments to help ensure the color of your product meets your quality control standards.

Control quality…Measure color of your products…Translate color in numerical values…Create simple pass or fail tolerance tests…Measure raw materials through final product...Increase customer satisfaction...

To learn more about Konica Minolta and to view our full product line,visit konicaminolta.com/sensingusa

When it comes to color measurement, the world’s food industry looks to Konica Minolta.

The BC-10 Baking Meter measures the color of baked, fired and processed foods, as well as ingredients, in various environments to ensure consistency in appearance.

BC-10The CR-10 Color Reader is a very compact, battery powered, hand-held portable colorimeter for quick color control.

CR-10Konica Minolta Sensing Americas, Inc.101 Williams DriveRamsey, NJ 07446konicaminolta.com/sensingusaToll Free: 888-473-2656Outside USA: 201-236-4300

16 news & Views magazine Edition 2, 201116 news & Views magazine Edition 2, 2011


The fall Board of Directors' meeting, held at the picturesque Carmel Valley Ranch, was well attended. A considerable amount of information was provided for directors and others participating and important business was conducted both by the Executive Committee and the Board. Highlights include:

Fall Board of Directors'Meeting

Carmel Valley Ranch, Carmel, CAoctober 27 & 28, 2011

California League of Food Processors

exeCutive Committee• Approved $29,000 in CLFP Scholarship awards• Adopted a 2012 preliminary budget for

recommendation to the Board of Directors

general session - Board oF direCtorsJames R. Coughlin, Ph.D. President of Coughlin & Associations made a presentation addressing the history of Proposition 65, California Environmental Protective Agency’s Office of Environmental Health Hazard Assessment’s (OEHHA’s) listing of over 800 chemicals - 500 carcinogens and 300 reproductive toxins/DARTS, of which only one third have been have been given a risk assessment. He provided the progression and outcomes of several legal cases addressing the alleged and inaccurate dangers of chemical risk assessments in food manufacturing. He urged food manufacturers to be proactive in utilizing science to help identify the real risk assessments for the two thirds of chemicals remaining on the list.

John Hewitt of the Grocery Manufacturers Association (GMA) addressed the Board to outline GMA’s efforts to represent the safety of consumption products utilizing their means including legislative experts and scientific data to develop the best approach in dealing with some of the chemical listings.

Patrick Kennelly, Chief, Food Safety Section of the California Department of Health provided an update of activity in 2010 through 2011 including the type and number of inspections (GMP compliance, complaint investigations, organic fraud, unlicensed practice of medicine, unapproved cancer treatments), food recalls, education and training, food program activities – FDA Manufactured Foods’ Regulatory Program Standards, Food Safety Modernization Act – FDA is working to develop a group of third-party certified auditors to provide certification on commodities coming in from other countries with lower regulatory/food safety policies, and legislation.

Business session - Board oF direCtors• Reports on AB 32, storm water, water use efficiency,

fees, CV Salts and other related regulatory affairs• Supplier Host Council report on fund-raising activity

and further plans to raise money for the CLFP Scholarship Program

• Information on the progress of planning the 2012 Expo & Showcase of Processed Foods was provided

• Approved preliminary 2012 budget


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longest driveRob Stevenson, Seneca Foods CorporationKathy Foushee, Bell-Carter Foods, Inc.

Closest to the pinRoss Oliveira, The Morning Star Packing Company

tomato putting ContestAaron Blank, Hydro-Thermal Corporation

1st plaCe low grossRob Hamilton, Capital Corrugated and CartonRoss Oliveira, The Morning Star Packing CompanyJeff Wong, The Morning Star Packing CompanyGordon Gardner, The Morning Star Packing Company

1st plaCe low netAaron Blank, Hydro-Thermal CorporationCraig Goble, Bank of the WestJohn Larrea, California League of Food Processors

CALIFORNIA LEAGUE OF FOOD PROCESSORS

SUPPLIER HOST COUNCIL GOLF TOURNAMENT

CLFP’s 15th Annual Supplier Host Council Golf Tournament was held on October 17, 2011 at the Stockton Golf and Country Club in Stockton, CA. With the sun high in the sky and a turn-out of 121 food processor and SHC Affiliate Members, the day could not have been better.

Thanks to our ever generous processor and SHC Affiliate members, this year’s tournament was one of our most successful yet. All sponsorships were sold and a great variety of raffle donations were provided for the closing reception and dinner. Thank you to all who contributed to this annual event by sponsoring, donating and most of all attending.

Congratulations are in order to the following individuals for their outstanding game of golf:

All proceeds benefit the Supplier Host Council Reception and Silent Auction, scheduled for January 31, 2012 at the Expo and Showcase of Processed Foods. This annual event raises funds for the CLFP Scholarship Program.


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CLFP Inducted into California Agricultural Heritage Club

The California League of Food Processors was inducted into the California Agricultural Heritage Club at the California State Fair Grandstands in Sacramento on July 29, 2011. The California Agricultural Heritage Club, originally founded as The 100 Year Club in 1948, is a group that recognizes families, businesses and special agricultural interests that have maintained a financial responsibility in agriculture for at least a century. They also have special recognition for entities that have existed for over 125, 150 and 175 years.

The 2011 California Agricultural Heritage Recognition Ceremony & Brunch was co-sponsored by the California Farm Bureau, California Farmer Magazine, California Grain and Feed and the Friends of the California State Fair.

From left : John larrea, allyson rathkamp, Janet planck, alissa dillon, trudi hughes, amy alcorn, ed yates, and Chair of the California agricultural heritage Club, James van maren

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Cv-salts CLFP continues to actively participate in the Central Valley Salinity Alternatives for Long Term Sustainability (CV-SALTS) initiative. The objective of this effort is to develop revised regulations and standards for land application of saline wastewater or discharges of wastewater into surface waters. CLFP’s goal is to obtain more regulatory clarity, certainty, and flexibility for food processors. One of the key outcomes of CV-SALTS mandated by the Central Valley Regional Water Board is the development of a list of best management practices that may be used by dischargers. This may be one of the most important elements of the CV-SALTS initiative and CLFP will be working with agricultural groups and other stakeholders to ensure that any new requirements are based on sound science and can be implemented in a cost-effective manner.

state water Board draFt industrial general permit For stormwater disChargeThe State Water Resources Control Board (Board) released its Draft Industrial Permit for Storm Water Discharge on January 28, 2011. The proposed permit contains the most stringent storm water permit regulations in the country. The cost to food processors for monitoring and compliance will increase significantly if these rules are adopted. There will be a significant increase in the risk of third party lawsuits as well as the need for investment in structural modifications. The new permitting requirements go far and beyond federal EPA rules, are not based on sound science, and would impose arbitrary numeric limits. This

action could increase a business’ permit and monitoring fees as much as ten times the current costs.

CLFP has taken a lead role in opposing the draft permit and is currently co-chairing the “Workable Approach to Environmental Action” (WATER) Coalition. The WATER Coalition is made up of over 150 organizations representing industry, schools, and municipalities.

CLFP spearheaded a legislative oversight hearing on behalf of the WATER Coalition to highlight the problems associated with the Board’s proposed storm water permit and to underscore the need for structural reform of Board practices. Senator Rod Wright (D-Los Angeles) agreed to hold a hearing of his Select Committee on California Job Creation and Retention to focus on the impacts that the proposed permits would have on the California economy. In the over four-hour hearing on October 6, the State Water Board’s Executive Director Tom Howard, admitted the Board had done “too much and too fast” and would be scaling back the permits significantly. The hearing was also attended by Republican Senators Ted Gaines (R-Fair Oaks), Bob Dutton (R-Inland Empire), and Bob Huff (R-Diamond Bar), as well as Democratic Senator Michael Rubio (D-Bakersfield).

The revised IGP Stormwater permit is expected to be released for public review and comment by the end of November.

Regulatory Reportby trudi Hughes CLFP Government Affairs director


department oF water resourCes water use eFFiCienCy eFFortsThe Department of Water Resources is responsible for implementing the provisions of SBX7-7 enacted in 2009 which requires a 20% reduction in water use by 2020. CLFP continues to actively participate as a member of the Commercial, Industrial, and Institutional Task Force established pursuant to SB7X-7 which is charged with making recommendations to the Legislature about establishing reasonable metrics and water conservation management practices in the commercial, institutional, and industrial sectors. The Task Force will issue a report to the Legislature in April 2012. The biggest challenge that the Task Force faces in establishing water use efficiency metrics in the industrial sector is the limited water use data available and the high degree of variability within each industrial sector. CLFP believes that the Task Force should recommend that more data be collected by the Department of Water Resources before establishing arbitrary water use efficiency metrics. Further, CLFP has urged that the Task Force not recommend a “one size fits all” approach in the establishment of metrics and best management practices for water use efficiency.

state water Board Fee inCreases On September 19, 2011, the State Water Resources Control Board (Board) adopted a new core regulatory program fee schedule, which increases fees for NPDES permit holders by 60.6 percent and for waste discharge requirements by 24 percent. The fee increases are the result, in part, of the State Legislature’s decision to shift tens of millions of dollars of previously General Fund supported basin planning and Total Maximum Daily Load programs to fee support. CLFP expressed great concerns about the magnitude of the increase and the need to identify program efficiencies to stem the impact of future rate increases. CLFP joined many other interest groups in asking the Board to re-evaluate its programs in light of the significant fee increases, which affected all segments of the regulated community, including a more than 300 percent increase in the agricultural waiver fees to transition the program to full fee support.


by trudi Hughes CLFP Government Aff airs director

LegislativeUpdate



2011 CaliFornia legislative sessionThe Legislature adjourned on September 9, 2011, giving the Governor 31 days to sign or veto legislation that reached his desk. From mid-September to October 9, Governor Brown signed 466 bills and vetoed 97. The CLFP was tracking well over 100 measures throughout the Legislative Session and engaged on several key measures regarding air, water, energy, toxics, taxation and labor. The CLFP worked hard to promote a favorable climate for food processors to do business in California by supporting regulatory reform measures and opposing burdensome regulatory and tax and spend measures. Below is a list of priority issues that came before the Legislature that impacts the food processing industry.

regulatory reForm Regulatory reform continued to be a top priority this legislative session. CLFP believes that especially in these difficult economic times, government should make every effort to provide a favorable regulatory environment so California businesses have the best opportunity to succeed leading to job growth and improved quality of life for all Californians. CLFP continues to support the efforts of the Regulatory Oversight, Analysis and Reform Coalition (ROAR), a broad based business coalition that was formed to push for regulatory reform in California in an effort to foster job creation and growth. A myriad of bills were introduced this session in an effort to improve economic analysis and review of proposed regulations, performance based budgeting for regulatory agencies, and consolidation of economic development programs. CLFP supported several of these measures. However, despite the groundswell of support by the regulated community for these reform proposals, the Legislature sent only a few of these bills to the Governor’s Desk. senate Bill 617 (r. Calderon; d-montebello): One of the few regulatory reform measures that made it to the Governor’s desk was SB 617, which was drafted and passed by the Legislature at the last minute before the end of session. The bill was drafted with the input of Democratic leadership and the business community. The bill reforms the regulatory process by requiring an economic analysis of all major regulations at the beginning of the regulatory process, thus providing more transparency and better data on which to base selection of the most cost-effective regulatory alternative. This analysis will then drive the development and selection of regulations that fully meet the goals of the underlying statute, while having the least negative impact on the state’s economy. If the agency adopts anything other than the most cost-effective option, it must state on the record

why and justify its choice. Currently a proposed regulation’s fiscal analysis, if any, comes at the end of the process and is not based on uniform standards of analysis. While CLFP joined with the rest of the business community in support of the measure, we let the Legislature and the Governor know that this bill is just a first step and there is still much work to be done to reform California’s burdensome regulatory environment. The Governor signed the bill soon after it reached his desk. senate Bill 639 (Cannella; r-Ceres): CLFP co-sponsored SB 639 with the Western Growers Association which would help put more teeth in SB 617 by requiring the California Environmental Protection Agency (Cal EPA), including all departments under its jurisdiction and the Division of Occupational Safety and Health to complete a third party economic impact analysis when proposing to adopt, amend, or repeal an administrative regulation prior to the adoption, amendment, or repeal of the regulation. There are many examples of regulatory requirements placed on food processing operations that did not adequately assess the economic impact, including: the California Air Resources Board’s current AB 32 implementation plan; the San Joaquin Valley Regional Air Quality Control District’s boiler “best available control technology” retrofit requirements; the regional water quality control boards’ wastewater discharge requirements; and the State Water Board’s Draft Industrial General Permit for Stormwater Discharge. The economic impact assessments of these regulatory programs and many others have not adequately portrayed the “real” cost food processors pay to comply. The bill was held over in the Senate Environmental Quality Committee and will be taken up again in January when the Legislature reconvenes.

Bisphenol a (Bpa)Governor Brown recently signed AB 1319 (Butler), a CLFP opposed measure which prohibits the manufacture and sale of bottles and cups intended for children under 3 years of age that contain BPA at a level exceeding 0.1 ppb. CLFP continues to maintain that there is no scientific justification to ban BPA in any product. Allegations from the proponents differ sharply from the scientific assessments recently conducted by numerous international regulatory agencies, including the Federal Environmental Protection Agency and the U.S. Food and Drug Administration, that have found no health risks associated with exposure to BPA. This bill sets a precedence for future bans on products, potentially including canned foods.

Continued on pg. 30


It has been made clear by the proponents of the bill, that this is just a beginning and we can expect future legislation to ban additional products containing trace amounts of BPA. The Breast Cancer Fund stated in its press release on the signing of AB 1319: “Clearly this new law isn't our endgame. We took aim at baby bottles and sippy cups first because babies are most vulnerable to the effects of chemicals like BPA… Our aim: a BPA-free dinner table for all ages, all income levels, all degrees of BPA-savvy and all states.” The bill prohibits bottles and cups from containing BPA at a level exceeding 0.1 ppb. This level is extremely low and questions remain as to whether it is technologically possible to even measure or meet such a level. This level is also lower than many laboratories’ abilities to detect the compound in many types of foods. Even products labeled as “BPA-free” and those where BPA is not intentionally added during the manufacturing process may not be able to demonstrate compliance. Finally, CLFP argued that the Legislature established the Green Chemistry Initiative, a process by which state scientists would be empowered to evaluate chemicals in consumer products and implement a variety of regulatory actions if necessary. DTSC continues to work on developing implementing regulations. A key component of this regulatory effort is a focus on “alternatives assessments” with an eye toward avoiding “regrettable substitutes.” AB 1319 requires manufacturers to use the “least toxic alternative” but provides no clear indication of what that is or what regulatory body will make such a determination. CLFP believes that science, not politics should guide chemical policy. AB 1319 made an arbitrary decision on what products should be banned. This type of political decision making is a good example of why the Legislature was wise to establish a science-based chemical evaluation process at DTSC.

taxationSingle Sales Factor. The Legislature considered two measures, SB 116 (De Leon; D-Los Angeles) and ABX1 40 (Fuentes; D-Los Angeles) in the final hours before the end of session that would require all businesses to use the Single Sales Factor (SSF) to source the California share of income for corporate income taxes. When adopted as part of the February 2009 budget package, the SSF was elective and intended to promote investments for manufacturing and other industries in the state whose markets and business models would benefit from such an incentive.

These bills were introduced to address concerns that the current election provision may allow some taxpayers to manipulate their tax liability on an annual basis, thus leading to the potential for uncertainty and lack of predictability to the state with regards to revenue. Supporters of mandatory SSF suggest that a double-weighted sales apportionment is an invalid method to calculate state tax liability. Many business organizations opposed these measures arguing that long-standing California companies that have multi-state operations have business models that would subject them to exceedingly high tax liability under a single sales calculation. Many companies have significant investments of property and payroll in California going back many decades, but the size of their sales into the state, one of the largest markets in the world, renders those investments trivial by comparison. Increasing those companies tax burden by up to 60%, in some cases, does not send the right signal to such businesses, especially in a time when we need jobs and economic growth. Both measures were debated extensively in Senate Policy Committees and on the Senate Floor just hours before the Session was adjourned. Both measures were ultimately defeated.

Gas Tax. Senator Steinberg (D-Sacramento) crafted SB 791 during the final days of session, which would give Metropolitan Planning Organizations(MPOs) the authority to initiate county elections to raise gasoline taxes in unlimited amounts with the approval of only a simple majority of local voters. CLFP joined a large coalition in opposition to this measure arguing that increasing motor fuel taxes at the height of the state’s most serious recession since the Great Depression would cause severe financial harm to businesses, taxpayers and consumers at a time they can least afford it. The pain of SB 791 would not stop at the pump but would be felt throughout the economy as farmers, manufacturers and service providers pass along the increased fuel costs to their customers in the form of higher prices for everyday necessities such as food products. Charging a gas tax for the purposes of reducing congestion, which is broadly and loosely interpreted by the bill, contradicts Proposition 26 and should require a two-thirds vote. The bill was held over in the Senate Rules Committee and will be taken up in January when the Legislature reconvenes.

continued from pg. 29


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In 1970, California’s Legislature was declared the model for America, and it was an honor well deserved. It has “all the right characteristics that a legislature should have.” In the mid-‘50s California purged the legislative process of lobbyists such as Artie Samish who once boasted he was “governor of the men (all men in those days) who were elected, and he ran the place.

By the 1960s, legislatures around the country were wakening from their long naps as political backwaters. The idea the federal government had all the answers was fading, and states were once again seen as laboratories for democracy, exactly what the founding fathers wanted them to be.

California led the way. It had a professional staff writing and analyzing bills; members were paid decent salaries; and legislative service attracted some of the best and brightest. Most importantly, the legislators of the 1960s and 1970s knew how to govern; they knew how to make deals.

But today’s Legislature is blamed for most everything wrong with California. The two parties cannot get along. They cannot govern. They do nothing but fight between themselves, and the public has pretty much turned off to the legislative process. The Legislature’s approval rating wobbles between 10 and 20 percent, depending upon the poll – the only approvals these days seem to come from staffers and blood relatives.

So what went wrong; what caused the decline; and can it be turned around? In liberal circles it is fashionable to blame Proposition 13 and the emergence of direct democracy for all the ills. Those cranky citizens have made it impossible for legislators to govern, complain the liberals.

This is an odd argument, and it’s also not true. The people have had the power to make their own laws for a century.

They passed Proposition 13 in 1978 after nearly a decade of failure by legislators to provide property tax relief. Despite the fact this state becomes more democratic every year, the voters have refused opportunities to raise taxes, even on the rich or on Big Oil and Big Tobacco. They have purposely limited the Legislature’s discretion in areas such as law enforcement and school finance.

So the voters have taken out their anger at a dysfunctional legislature by clipping its wings, but their exercise of direct democracy is not the reason for the dysfunction, it is the product of the dysfunction. The reasons go deeper.

One reason often cited is term limits. There is some justification. For 20 years we have operated under term limits that allow six years of service in the Assembly. (Senators can have eight years of service.) Six years is too short, and that is one reason for generally weak leadership in the Assembly. But help is on the way. At the next statewide election, an initiative will give voters the option of allowing a legislator to serve 12 years in either house. So you can serve on 12-year term in either the Assembly or the Senate. That will go a long way to alleviate the power vacuum, especially in the Assembly, that term limits bring about.

A number of acute observers have noted that campaign finance reform is also a major villain. That may sound odd, but in 2000 legislators themselves placed a ballot measure to limit direct campaign contributions. The measure was an alternative to an existing campaign finance initiative opposed by politicians.

As with everything else, there were unintended consequences. The leadership was no longer able to raise huge sums of money for individual legislators. That reduced the clout of the leaders and made it harder for the leaders to impose their will on members.

Twist & Shoutdo voters know what’s really killing California?

By tony Quinn Reprinted from Comstock’s, July 2011

Continued on pg. 36


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Power always flows somewhere; in this case, it flowed to the interest groups. They are able to spend unlimited amounts of money through independent expenditures, and that has replaced legislative leaders as the source of campaign funds. This means these special interests call the shots, and the consequence is apparent every day. Democrats are unable to cross the powerful public employee unions who bankroll their campaigns, and Republicans are scared to death of the anti-tax groups who threaten them if they wander off the reservation.

So you have a legislature with weak leaders and members unwilling and unable to buck the special interests who got them elected.

But changes are coming. New districts created by the California Citizens Redistricting Commission rather than sweetheart districts drawn by legislators themselves may inject some democracy back into the process and make legislators more responsive to their voters, not just the moneyed interests groups.

And the new open-primary law with a runoff of the top two contenders regardless of party should also lead to the election of legislators more attuned to all the voters in their districts, not just ideological activists who dominate the old closed-primary system.

Whether these two reforms, whose impact will be seen in the 2012 election, actually work to improve the Legislature is an open question. But given the public’s unhappiness with legislative performance today, structural reforms may be the best hope and only way to restore California’s Legislature to the glory that it once knew.

Tony Quinn is co-editor of the California Target Book, a nonpartisan analysis of legislative and congressional elections.


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Sometimes what seems to be a failure may actually be successful when viewed in the proper context. Take the Spartans at Thermopylae. Though King Leonidas of Sparta failed to contain the 100,000 strong Persian army, those 300 Spartans, even in defeat, bought the time necessary for Greeks to prepare for, and eventually win, the war. AB 333 in its own small way is a lot like those Spartans.

When first examined, the bill seems no different than other industry backed AB 32/climate change bills all of which suffered the same inevitable fate: one committee hearing and out. But life of AB 333, short as it was, needs to be carefully examined.

AB 333 began its existence as a rehashing of Proposition 23, but with a few changes. To recall, Proposition 23 required the state to suspend the implementation of AB 32 until the state’s unemployment level reached 5.5% for four consecutive quarters. Under AB 333, the Air Resources Board (ARB) would have been required to exempt from an emissions reduction requirement under AB 32 any emissions source located within a county that had an

unemployment rate of 7% or greater, until that county’s unemployment rate dropped below 7% for 6 consecutive months. The bill’s aims were much more reasonable than Proposition 23 and, for CLFP in particular, were nominally aimed at aiding food processors. But politically, it had zero chance of passing out of its first committee.

Then in January 2011, the uncertainty surrounding the start of the cap-and-trade program escalated. A lawsuit filed against the ARB in 2009 by the Association of Irritated Residents (AIR) challenging ARB’s implementation of AB 32, was the subject of a tentative ruling by the court. AIR had challenged ARB on the grounds that the agency had failed to meet mandatory requirements of AB 32 and CA Environmental Quality Act. The tentative ruling denied the challenge on AB 32 but sided with AIR as to CEQA.

As a result of the ruling, ARB went into a veritable public blackout: No workshops or meetings were scheduled; no news or status regarding the implementation schedule. Speculation was rampant as to whether the ARB could even complete the cap-and-trade regulation in time for

Measuring Success: Assembly Bill 333by John LarreaCLFP Government Affairs director


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the January 1, 2012 start. Meanwhile, the Legislature continued to display no interest in the developments at ARB and the Governor was neck deep in the weeds on the budget.

A couple of months passed with no movement. Lobbyists were getting complaints from their individual companies in the process of planning their 2012 budgets. The complaints, arising from the growing uncertainty surrounding the unfinished regulation, were beginning to highlight the difficulty companies were having in reasonably planning for the significant costs associated with the cap-and-trade in their annual budgets. That’s when CLFP, along with the CA Manufacturers & Technology Association (CMTA) and the Western States Petroleum Association (WSPA) began discussing how to address the delay.

Assemblywoman Shannon Grove (R-Bakersfield) was contacted as to whether she would consider amending her bill, AB 333. To her credit, Grove was more than cooperative; she took the suggested amendments and ran with them and the bill was amended on May 11, 2011.

The concept was simple. The new version of the bill did not ask for anything that the ARB staff wasn’t already required to provide – a report on the status of the cap-and-trade regulation on July 31. However, the bill did require that the same report be given to the Legislature as well. The language also cleared up one other point, that the ARB, if it so desired, could delay the implementation of the cap-and-trade for one year.

More importantly, AB 333 seemed also to be taken as a reminder to the Legislature of their obligation to oversee ARB’s efforts to implement AB 32, and especially to understand the ramifications of the proposed cap-and-trade regulation and to acknowledge responsibility for this policy direction.

AB 333 begged the question: Why wasn’t the Legislature already asking for this information on its own? Why was a bill, directing the ARB to keep the Legislature informed, even necessary given the magnitude of the impact of cap-and-trade on California industry? The effort in support of AB 333 began in earnest as CLFP, CMTA, and WSPA began lobbying members of the Assembly Natural Resources Committee to support the bill.

Continued on pg. 40



On June 27 at 1:30pm, the bill appeared in its first and last committee. The hearing lasted six hours and AB 333 was the very last bill heard. Of the supporters, only CLFP was able to provide an actual company executive to testify to the uncertainty surrounding the start of the cap-and-trade and to the difficulty the regulation presents for industry in its current form and timing. No big surprise, AB 333 failed passage on a 3-2 vote in the nine member committee.

However, just two days later, at a Senate Select informational hearing on cap-and-trade, in the midst of fielding numerous softball questions from a friendly committee, Mary Nichols, Chair of the ARB, dropped a bombshell. She announced that the January 1, 2012 start date of cap-and-trade would be delayed by one year to 2013.

Whether or not AB 333 was the catalyst behind Nichols’ decision is impossible to determine, but the timing did raise eyebrows among industry stakeholders with the announcement following so closely on the heels of the AB 333 hearing. Adding to the intrigue, some ARB staff involved in cap-and-trade regulation development alluded to rumors of a delay having filtered down from ARB executive levels only a few days after AB 333 surfaced in its amended form at the Legislature.

Whatever the true impetus behind Nichols’ decision, AB 333 may have bought industrial stakeholders a bit more time to try to improve the cap-and-trade. Like the Greeks, we can’t afford to waste this small reprieve and should redouble our efforts to prepare for the difficult days ahead we know are coming.


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CLFP_2011_ ad_8.375x10.875.indd 1 11/7/11 3:34 PM


Cap-and-trade program objectiveThe objective is to reduce greenhouse gas (GHG) emissions from 600+ facilities by about 15 percent during the period 2012 – 2020. At least 40 food processing facilities will be required to participate, including 21 CLFP members. Regulations have not been promulgated regarding the status of the program after 2020, but a goal of AB 32 is to achieve significant further emissions reductions by 2050.

Facility ghg emissions reportingSince 2008 all facilities with GHG emissions >25,000 mt CO2e have been required to report their emissions to CARB and must obtain periodic third-party verifications of their reports. For food processors the reporting will be focused on combustion emissions from the use of boilers, dryers, dehydrators, and other stationary sources. Starting in 2013 all facilities with GHG emissions >10,000 mt but less than 25,000 mt must begin reporting but they will not be subject to third-party verification requirements. It is important to note that carbon emissions resulting from the combustion of biogas do not count towards the facility GHG footprint.

how do Facilities Comply?There will be three compliance periods, 2012-2014, 2015-2017, and 2018-2020. In each of these periods facilities must surrender to ARB (via holding accounts) sufficient “compliance instruments” to cover their total GHG emissions in the period. For example, if a facility emitted 25,000 mt in each of the first three years, they must submit a total of 75,000 compliance instruments after the completion of the period. Facilities must demonstrate during each compliance period that they are making progress towards meeting their three-year target. Facilities will receive no direct credit for past reductions in combustion emissions or reductions in their use of electricity (so called “secondary emissions”).

what is a ghg “Compliance instrument”There are three main types of instruments (i.e. credits) that a facility can use to demonstrate compliance:1. Sector Credits: Some sectors will receive free

allowances based on an assigned “leakage risk” which is essentially the risk of businesses in the sector leaving the state due to high compliance costs. ARB assigned a “medium” leakage risk to the food processing sector. As a result, food processors will get 100% free allowances (with one caveat regarding the boiler efficiency benchmark) in the first compliance period, 75% in the second period, and 50% in the third period.

2. Auction Allowances: Credits that are purchased at the prevailing market price in the periodic ARB GHG auctions.

3. Offsets: Offsets are approved emissions reduction credits based on established protocols that are purchased in private transactions with offset producers or through GHG emissions brokers (not the ARB auction). Examples include dairy manure digester offsets or forestry management offsets. It is important to note that regulated facilities can only purchase validated California offsets, and they can only use offsets to cover a maximum of 8 percent of their total compliance obligation. Also note that the buyer is responsible for non-performance of an offset contract (e.g. the forest burns down).

why does Boiler efficiency matter in terms of ghg Credits?The allocation of sector credits (see above) will be based on an equation generated by ARB that varies by sector, and on an efficiency performance standard. ARB chose to use an energy-based efficiency metric (GHG emissions/energy input) for food processors rather than a product-based metric (GHG/unit of production). ARB is in the process of setting a benchmark for boiler steam conversion efficiency at food processing plants. If the benchmark is

California Air Resources Board AB 32 Cap-and-Trade Program Summary

by Rob neenanCLFP Senior Vice President

An overview of the issue. For further details regarding the program, contact the CLFP office.

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set at 85%, and a regulated facility’s boilers are below that level, the facility will have a higher compliance

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