PFMA President & CEO Alex Baloga joined PFMA members at the Mid-Atlantic Fruit and Vegetable Convention in Hershey last month. From left, Lela Reichart, Sterman Masser, Inc. Potato Farms; Ryan Krebs, Rutter’s; Atif Bostic, Uplift Solutions; Alex Baloga; and Joe Dirzius, Weis Markets.
A provision in President Donald Trump’s budget proposal would replace SNAP benefits for certain recipients with a monthly package of 100% American-grown staple goods, such as cereals, pasta, peanut butter, beans and canned fruit, vegetables, meat, poultry, and fish. The changes would affect households receiving more than $90 in SNAP benefits, with a portion of the benefit arriving as a “Foods Box” and the rest going onto the recipient’s EBT card.
According to the U.S. Department of Agriculture, the Food Box is estimated to save more than $200 billion over ten years by reducing “waste, fraud, and abuse by limiting opportunities for benefits to be misused or trafficked.” A number of critics have disputed those claims, however, including the Food Marketing Institute and other organizations PFMA regularly partners with, contending the cost of the initial and ongoing implementation of the program would fall largely on state governments. Others contend the changes would not result in significant savings, and could cost governments more money as they become responsible not just for the cost of the original product, but also for those products’ transportation and distribution to beneficiaries, which is now covered by SNAP retailers.
PFMA urges members to contact their U.S. Senator and Representative to ask them to oppose attempts to replace a portion of SNAP benefits in certain households, as is currently outlined in the President’s budget proposal.
Governor Tom Wolf delivered a short budget address in early Februaryunveiling a plan that included additional funding for schools, social services, jobs training, and pension obligations, largely through the imposition of a Marcellus Shale natural gas severance tax. His proposal would also increase revenues through additional income tax collections and reduced spending on human services by raising the minimum wage from $7.25 to $12 an hour. As would be expected in an election year, the speech had strong bipartisan undertones, and Governor Wolf did not call for any new broad-based tax increases. Since then, the state’s Senate and House Appropriations Committees have been holding budget hearings with state department officials and interested parties, and will continue to do so into March. Upon completing the hearings, state legislators will return to Session to begin budget negotiations in anticipation of the June 30 budget deadline.
With Philadelphia’s school district facing a nearly $1 billion deficit over the next five years and control recently returned to the local level, Mayor Jim Kenney unveiled a budget proposal on March 1 that includes a 6 percent increase to property taxes and an 8.5 percent increase to real estate transfer taxes. According to his administration, the tax hikes would result in an additional $541 million in revenue collected by the city for the school district. Additional funding to fill the budget deficit would come from slowing down planned wage tax rate reductions and the city’s general fund, for a total of $980 million additional funds for the Philadelphia School District. Critics of the Mayor’s plan have raised concerns that the tax increases do not address the cause of the escalating costs, mainly unfunded pension obligations.
Although just one segment of the city’s budget, the school district’s financial issues are expected to remain a top concern as negotiations move forward. PFMA plans to do an in-depth summary and analysis on the mayor’s proposal in the coming weeks, and will keep members updated as more information becomes available.
In Pennsylvania, the price of milk is regulated. The Pennsylvania Milk Marketing Board sets different minimum prices for all fluid milk products at the producer, wholesale and retail levels in each of six different Milk Marketing Areas.
At the producer, raw milk level, Pennsylvania minimum prices are based primarily on federally established minimum prices which change from month to month and can vary dramatically over time. Retail minimums reflect raw milk prices, dealer/wholesale costs, retail costs and a profit margin.Those prices change monthly with raw milk prices.
In order to determine the costs of dealers and retailers, the board holds annual hearings at which the dealers and retailers present evidence regarding their costs. For the past 11 years, PFMA has based its presentation of retail costs on the 2007 costs of stores which were deemed representative of the stores in the six Milk Marketing Areas in 2007. Each year, PFMA asked the Board to take those 2007 costs and adjust them monthly by the consumer price index.
Two years ago, the board’s staff and one board member began questioning whether the group of stores (“cross-section”) used to determine retail costs in 2007 were still representative of the market. Unfortunately, given dramatic changes in the retail industry, their skepticism was reasonable.
For example, the group of stores selected in Area 1 in 2007 included three Wawas, two CVS’, two Giants, a Rite Aid, a K-Mart, and an A Plus Sunoco. Walmart, Target and Costco were not included, because they did not exist or were not significant factors in the retail milk market in Area 1 or any other area.
As a result, this year, PFMA, in conjunction with the Pennsylvania Association of Milk Dealers, has directed its accountants to make a fresh calculation of retail costs using stores that are currently representative of the stores selling milk in each area. That process is ongoing and will be completed in time for the 2019 cost hearings. For a variety of reasons, including, but not limited to the inclusion of larger, presumably more efficient stores, retail costs and, therefore, minimum prices will likely fall. It is too early to predict how much. Clearly, efficient dairy operations will become even more Important.
PFMA will continue to represent retailers at the Pennsylvania Milk Marketing Board hearings and will provide updates in the Spectrum and other communications.
Allen C. Warshaw is a retired partner of Rhoads & Sinon, LLP. He represents PFMA members on milk issues and at the Pa. Milk Marketing Board hearings.
Kinect Energy, Inc., a World Fuel Services company, recently announced the acquisition of OnDemand Energy Solutions (OnDemand) of Moon Township, Pennsylvania. The acquisition was completed on January 1, 2018.
OnDemand is an energy management firm serving commercial, industrial, and residential clients in its base markets of Pennsylvania, Ohio, and Maryland. The company provides electric and natural gas procurement services and manages thousands of clients across the Mid-Atlantic and Northeast regions.
“We provide energy management consulting services to more than 5,000 clients,” said John Zbihley, president, OnDemand Energy. “Based on the load we represent, we are the largest energy management consultant in the Mid-Atlantic region and one of the largest in the nation. Joining Kinect Energy Group will allow us to grow and expand services even further across all of PJM and North America.”
OnDemand specializes in managing the complexities of energy supply, delivery, and consumption. They offer competitive energy management solutions that meet each individual client’s operational, financial, and risk tolerance requirements and are focused on helping business customers control the impact of energy on their bottom line.
”OnDemand consistently delivers the broadest range of electric and natural gas supply solutions to their clients,” said Peter Brown, president of Kinect Energy, Inc. “These energy solutions will enable our clients to fully benefit from the promise of deregulation. OnDemand’s focus on client care makes this acquisition an excellent complement to Kinect Energy Group’s energy management suite
About Kinect Energy Group Kinect Energy Group was established in 2016 but the roots of the company have been around for decades. The company represents the collective talents of Bergen Energi, Nordisk Energipartner, U.S. Energy Services, UX Energy, Beach Front Energy, Public Utilities Board (Australia), Orchard Energy (UK) and KTM, Inc. Each company brought regional expertise and unique insights to make Kinect Energy Group who it is today: a leading global energy management company. For more information, visit www.kinectenergy.com.
About World Fuel Services Corporation Headquartered in Miami, Florida, World Fuel Services is a global energy management company involved in providing energy procurement advisory services, supply fulfillment and transaction and payment management solutions to commercial and industrial customers, principally in the aviation, marine and land transportation industries. World Fuel Services sells fuel and delivers services to its clients at more than 8,000 locations in more than 200 countries and territories worldwide. For more information, call 305-428-8000 or visit www.wfscorp.com.
For additional information, please contact our PFMA representative Cheryl Hefft at 717-575-4807.
The Pennsylvania Food Merchants Association (PFMA) recently selected Federated Insurance Companies as the recommended insurance carrier for Property & Liability Insurance, Workers Compensation and Financial Protection Services.
“PFMA is pleased to partner with Federated Insurance for our members’ insurance, workers’ compensation and financial protection services,” said Alex Baloga, president and CEO. “Their experience working with trade associations, robust product portfolio, exceptional customer service and great value make them an excellent choice to assist PFMA members with these services.”
“Federated is proud to support the great work of the Pennsylvania Food Merchants Association through our marketing team, our commitment to trade associations, and our specialized insurance products and risk management services,” said David Szymanski, Federated 1st Vice-President and Director of ARMS-Home Office Marketing Services.
For more information on Federated Insurance’s services, contact Daniel Dowdy at 706-318-5051.
The Pennsylvania Food Merchants Association (PFMA) announced a new officer and six new members to its board of directors last month.
Lou Mola, Loss Prevention manager for Wawa, Inc. will take on the role of PFMA vice chairman from Rich Wood of Wawa, who has resigned his positon on the board of directors. Mola currently chairs PFMA’s Loss Prevention (LP) Committee as well as LP committees for the Delaware Food Industry Council and the New Jersey Food Council. During his tenure, he was instrumental in getting legislation passed to combat Organized Retail Crime, and worked with the industry, law enforcement and government leaders to enact legislation creating the first dedicated retail crimes prosecutor in the United States. Prior to joining Wawa in 2013, he served as the Investigations Team Leader for Target Corporation and led a 44-person team focused on organized crime.
“PFMA is excited to have Lou Mola take on this leadership role as PFMA Vice Chairman,” said Alex Baloga, PFMA president and CEO. “He is an effective leader for our Loss Prevention Committee and I know he will bring the same energy to our board of directors. Our thanks to Rich Wood for his leadership and service to the PFMA board for the past six years.”
PFMA also appointed six new board members due to the retirement of Rich McMenamin, McMenamin Family ShopRites; and the departure of Lisa Silberman, A.J. Silberman & Company; and Gary McGuirk, Jr., Liberty USA, who sold their companies to Eby-Brown. The new board members are:
• Patrick Burns, owner, Burns Neighborhood Markets, Philadelphia; • Brent Cotten, senior director, Global Customer and Industry Affairs, The Hershey Company, Hershey; • Gary Gloeckl, vice president of sales, A.J. Silberman, a division of Eby-Brown, Indianola, Pa; • Scott Kolat, senior vice president of sales & business development, Eby-Brown, Naperville, Ill.; • James Pulsifer, senior manager, State Relations and Regulatory Compliance, Altria Group Distribution Company, Richmond, Va.; and • Robert Sincavich, president of Team Sledd, Bridgeport, Ohio.
“Our sincere thanks to Rich McMenamin, Lisa Silberman and Gary McGuirk for their ideas, friendship and support through the years,” Baloga said. “We wish them all the best.”