Do USDA Standards Encourage Food Waste?

Written by Shannon Kenny, GW Visiting Scholar

Are you ever struck by the “Instagrammable” beauty and bounty of the uniform, perfect produce (especially tomatoes!) at your local supermarket? Many of us are – and many supermarkets believe that this is an important factor in our choosing where to shop and what to purchase.

Unfortunately, many fruits and vegetables are culled along the way from farm to supermarket, in order to bring you that display. Some of the “less than perfect” (but still equally tasty and healthy) products are left unharvested and tilled into the soil, or culled and diverted for processing, donated to charity, fed to animals, or composted.  But others are simply discarded. Researchers believe as much as 30% of produce grown on farms is left unharvested or culled.

Many conversations about food waste (at least here in DC) focus on new government policies that could help.  But we should also explore a second question – are any existing government policies part of the problem?

One area ripe for further exploration is the produce standards set by the US Department of Agriculture (USDA).

For many fruits and vegetables, USDA sets “grades” based on appearance, including size, shape, texture and ripeness. Farmers and/or distributors pay USDA to inspect their produce and assign it a grade. This is voluntary, but retailers and restaurants typically use these grades to make purchasing decisions.

For 15 fruits and vegetables, USDA also issues “marketing orders” (at the request of industry) that require all produce sold to meet “minimum quality standards” for appearance. This is a mandatory program, unlike the voluntary grading program. Produce that does not meet these standards may not be sold “fresh” (i.e., unprocessed) for human consumption; hence the homogenous display at your supermarket. Marketing orders may also limit the amount of a particular item that may be sold in a given year.

Unfortunately, USDA standards may encourage food waste.

By grading produce, USDA is picking winners and losers. Retailers, only wanting the best for their customers, may buy only the higher-graded produce. And retailers willing to purchase less perfect produce may find it difficult to do so.  The grading system may bunch together different kinds of imperfections (some acceptable to consumers and some not) or a marketing order may prohibit the sale of any imperfect produce. For example, had there been a marketing order covering Texas potatoes or Washington apples, Walmart would not have been able to sell its “Spuglies” potatoes and “I’m perfect” apples, without the explicit permission of the industry board governing the marketing order.

In addition, farmers are more likely to leave unharvested or cull less perfect produce that will receive a lower grade, since its value in the market is diminished.  The standards may also cause farmers to breed tomatoes for uniform appearance over other factors, such as taste or nutrition.

But what if USDA grades or minimum quality standards aren’t perfectly aligned with consumer preferences? Then we may be wasting lower-graded produce unnecessarily – since this imperfect produce may be acceptable to consumers but not make it to supermarkets where it can be purchased.

Let’s look at tomatoes as an example.  

USDA inspectors assign a grade to each batch of tomatoes, on a scale from “No. 1” (best) to “No. 3”.  To receive any grade, tomatoes must be safe to eat and be mature, clean, and well-developed; not overripe or soft; and free from decay or freezing injury. The differences among the grades are mostly in texture (No. 1’s must be “fairly smooth”) and shape (only No. 3’s may be “misshapen”). The grading system was developed by USDA, with significant input from industry. There was an opportunity for public comment, but it may not have been well-utilized by consumers or other stakeholders.

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For field-grown tomatoes sold in the US during the colder months (October-June), a mandatory marketing order also applies. The marketing order was developed and is regularly updated by industry, then approved by USDA. For the upcoming season, tomatoes may only be sold if they have been graded by USDA (mandating the otherwise-voluntary grading program), they have received at least a “No. 2” grade, and they are at least 2 9/32-inches in diameter. Consumers will not be able to purchase ungraded, lower-graded, or smaller tomatoes. Florida tomato packers estimate that up to 40% harvested tomatoes do not meet the marketing order standards and cannot be sold “fresh”.  (Note: There are exceptions for Roma and cherry/grape tomato varieties.) 

So, do the USDA grades and minimum quality standards match consumer preferences? It’s unlikely given that consumers consistently rank tomatoes at or near the bottom of produce customer satisfaction surveys, yet for many months of the year, they can only buy highly-graded tomatoes.

Would consumers purchase a misshapen tomato, rather than let it go to waste, if it were equally (or more) tasty and nutritious?  It’s hard to say for sure, but in recent years US consumers have shown an openness to purchasing less attractive produce at farmers markets and in pilots in stores such as Walmart and Whole Foods. However, the current USDA standards make it difficult, and sometimes impossible, for this produce to make it to the supermarket.

In the case of tomatoes, a misshapen fruit can receive only the lowest USDA grade (“No. 3”), even if it meets all of the other criteria for a higher grade.  Under the marketing order, field-grown “No.3’s” cannot be sold between October and June. During July, August, and September a retailer may order “No. 3” tomatoes, but in addition to misshapen tomatoes, they may also receive tomatoes with other less-acceptable cosmetic imperfections, such as texture that is “more than slightly” rough or “sunscald” (a yellow or white area that may blister). There is no common language to order just the misshapen “No. 3’s”.

 

Tomato taste and nutrition may also be important to consumers, but current USDA standards do not provide any judgments in these areas.  A highly-graded tomato may lack the flavor and nutrition desired by consumers. For example, studies demonstrate consumers prefer the flavor of tomatoes ripened on the vine compared to those ripened in rooms with ethylene gas; however, virtually all of the “No. 1” tomatoes sold under the marketing order are room-ripened. In fact, tomato producers once used marketing order provisions to prevent the sale of vine-ripened imports preferred by customers (though this was struck down by the court).  Consumers may also appreciate signals to help them purchase the most nutritious tomatoes on offer, especially given the overall decline in supermarket tomatoes’ nutritional value.  (Did you know today’s tomatoes contain, on average, considerably less calcium, vitamin C, thiamin, and niacin, and considerably more sodium, than in the 1960’s?)

Marketing orders may also contain volume controls, limiting the amount of an item that may be sold in a given year.  Though the tomato order does not contain such a provision, the producers of seven types of produce (but not tomatoes) are authorized by USDA to impose volume controls (through their marketing order).  These provisions are intended to keep prices stable, but they can lead to waste of high-quality produce. For example, in 2009, supply controls for tart cherries led to more than 40% of tart cherries grown in seven states being left to rot in the field.

Could we prevent food waste by modifying USDA standards?

Currently, USDA standards may discourage (or prohibit) the sale of imperfect but safe, edible, tasty, and nutritious produce, increasing the chance it is wasted.

While some of the unsold produce may be donated to food banks, diverted for processing, fed to animals, or composted, rather than discarded, we cannot count on this. Farmers often face labor and transportation costs that make it infeasible, and processing facilities (e.g., canning or freezing operations) cannot always handle unpredicted surpluses.

USDA may be able to modify the grades, standards, and orders in ways that prevent food waste and better balance the needs of producers, retailers, and consumers. But this is a complex issue, and additional research in the following areas would be very useful in informing policy choices:

  • Producers’ business needs. The grading system and marketing orders were built in partnership with industry, at their request, and may reflect business needs unrelated to consumer preferences. The impact of loosening grade standards on farmers should be examined. For example, would the sale of less uniform produce impact the operation of harvesting, washing, and packing machinery? Would the sale of imperfect produce harm producers’ reputations or reduce overall sales?
  • Retailers’ cosmetic standards. Retailers often impose additional, more stringent cosmetic standards for produce purchases on top of USDA grades. A survey of these practices could prove useful. Would retailers embrace loosened USDA standards and stock less perfect produce, or would they impose new specifications just like the USDA grade standards in place now?
  • Consumer preferences. Consumer preferences regarding uniformity of produce may have been shaped by their supermarket experiences (i.e., have we been taught to expect perfection?). Can we change consumer preferences through new experiences (i.e., “normalizing” imperfect produce by making it readily available), education campaigns, samples, or pricing strategies? Are retailers underestimating consumers’ current willingness to purchase imperfect produce? Are some imperfections more acceptable to consumers than others?
  • State policies. States often run programs similar to marketing orders. The impact of these policies on food waste, and their interaction with USDA standards, should be examined.
  • Types of produce wasted. Anecdotal evidence suggests that different types of fruits and vegetables may be culled at vastly different rates due to USDA grades and retailer cosmetic standards. Better quantification of culling rates (and associated causes) could help target efforts to modify standards.
  • Impact of climate change. Extreme weather and movement of pests and disease due to changing climate may increase produce imperfections. For example, higher temperatures and abundant rain lead to “growth cracks” in tomatoes, a safe and edible, but aesthetically unfortunate attribute.
  • Lessons from the European Union. What impact will the European Union’s decision to dramatically reduce its number of produce standards in recent years have on food waste?

Stay tuned!