Are federal cuts threatening food safety?

Summary

Marketplace Morning Report: Are Federal Cuts Threatening Food Safety? Released June 23, 2025

In this episode of Marketplace Morning Report, host David Brancaccio delves into the pressing issue of federal budget cuts and their potential impact on food safety in the United States. The episode also provides a comprehensive market update amidst geopolitical tensions and covers developments in the pharmaceutical industry. Below is a detailed summary of the key discussions and insights from the episode.

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1. Market Update Amidst Geopolitical Tensions

Timestamp: 01:09 – 03:38

David Brancaccio opens the episode with an overview of the current state of the U.S. and global markets. Early trading shows mixed movements with the Dow Jones Industrial Average up by 78 points (2.10%), the S&P 500 increased by 3.10%, and the NASDAQ rose by 10%. Crude oil prices experienced a slight uptick of 3.10%, reaching $73.50 per barrel.

The market sentiment is influenced by recent U.S. military actions against Iran’s nuclear facilities. Iran's state-run Press TV announced that the Iranian parliament approved a plan to close the Strait of Hormuz, a critical chokepoint for global oil shipments. U.S. Secretary of State Marco Rubio has urged China to intervene and prevent such an action.

Expert Insight: Fernando Valli, Managing Director of Energy at HedgeEye Risk Management, provides his perspective on the oil price stability despite the geopolitical tensions.

• "There is no real belief from the market that the Strait of Hormuz is going to be closed. Otherwise oil would be significantly higher." [02:07]

Valli explains that the market does not anticipate an actual closure of the Strait, citing the high costs Iran would incur and the robust international response that would likely prevent such an action.

• "It's a very difficult to close, but it'd be very costly to Iran itself... China gets over five and a half to six million barrels a day of crude through the Strait of Hormuz." [02:41]

The discussion underscores the resilience of global oil markets and the complex interplay of international politics that influence market behaviors.

2. US Senate's Tax and Spending Bill Challenges

Timestamp: 03:38 – 05:00

Brancaccio transitions to the legislative arena, highlighting the hurdles faced by the U.S. Senate in passing a significant tax and spending bill. The bill aims to streamline reconciliation, allowing it to pass with a simple majority vote. However, Senate Parliamentarian Nancy Marshall Genser reports setbacks due to provisions that do not meet the reconciliation criteria.

Key Points:

• Provisions Under Scrutiny: Requirements for plaintiffs to post a bond before suing the government over Trump administration policies, mandates for states to share SNAP costs, and cuts to the Consumer Financial Protection Bureau were deemed violations.

• Impact: These rulings create uncertainty around the bill's passage, despite the looming July 4th deadline set by Democrats.

Genser emphasizes the challenges in aligning the bill’s provisions with budgetary constraints to secure legislative approval.

3. Budget Cuts Threatening Food Safety

Timestamp: 05:56 – 08:56

A significant portion of the episode is dedicated to exploring how federal budget cuts are jeopardizing America's food safety infrastructure. Last week's listeria outbreak linked to Ready-to-Eat pasta meals sold at major retailers like Walmart and Kroger resulted in three fatalities and numerous hospitalizations. This incident has heightened concerns over the nation’s food safety mechanisms amidst ongoing budget tightening.

Expert Contributions:

• Barbara Kowalczyk (Institute for Food Safety and Nutrition Security, GWU): "The biggest effect so far has been on the information side of things, especially at the Food and Drug Administration." [06:18]

• Sandra Eskin (Stop Foodborne Illness): Emphasizes the strain on the food safety oversight and outbreak response systems due to reduced administrative and communication staff.

• Sarah Sorcher (Center for Science in the Public Interest): Highlights the reinstatement of previously cut staff but notes that the FDA remains 20% understaffed, affecting critical functions like food testing and quality control.

• Stephen Mondernach (Association of Food and Drug Officials): "The cuts did far more harm than DOGE [Department of Government Efficiency]." [07:12]

• Don Schaffner (Rutgers University): States that enhanced technology allows for earlier detection of outbreaks, but ongoing underfunding poses a long-term threat.

Brancaccio underscores that while some staff have been reinstated, persistent understaffing and funding issues continue to undermine the effectiveness of food safety programs.

Conclusion from Experts: While immediate impacts are mitigated by reinstated staff and improved detection technologies, the sustainability of food safety remains precarious without adequate funding and resources.

• "If we invest less in food safety, eventually we'll have less safe food." [08:43]

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4. Pharmaceutical Industry Developments: Wegovy and Hims & Hers

Timestamp: 08:56 – 09:49

In the latest pharmaceutical news, Novo Nordisk, the maker of the popular weight loss drug Wegovy, has terminated its partnership with online telehealth retailer Hims & Hers. The decision comes after Hims & Hers continued to sell compounded versions of Wegovy that Novo Nordisk deems illegal following the drug’s reclassification from a short supply status.

Key Details:

• Impact on Hims & Hers: The breakup has significantly affected Hims & Hers' stock, leading to a 27% decline.

• Alternative Retailers: Despite the split, other telehealth companies like LifeMD continue to distribute genuine Wegovy, maintaining market availability through authorized channels.

Brancaccio reflects on the implications of this move for both companies and the broader telehealth market.

• "Wegovy is cutting off Hims & Hers after just over a month of partnership." [08:56]

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Conclusion

This episode of Marketplace Morning Report sheds light on the intricate connections between federal budget allocations and public health safety, emphasizing the critical need for sustained investment in food safety infrastructure. Additionally, it highlights the resilience of global markets in the face of geopolitical tensions and provides updates on legislative challenges and pharmaceutical industry shifts. Through expert interviews and detailed analysis, listeners gain a comprehensive understanding of the current economic and public health landscape.

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Notable Quotes:

• "There is no real belief from the market that the Strait of Hormuz is going to be closed." — Fernando Valli [02:07]
• "If we invest less in food safety, eventually we'll have less safe food." — Don Schaffner [08:43]

Transcript

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[David Brancaccio]

We'Ll update markets and the Middle East. I'm David Brancaccio in Los Angeles. In early trading here, stock indexes are mixed, but the movements are tentative given the U.S. bombing of Iran's nuclear facilities this weekend. The Dow is up now 78 points, 2. 10%. The S&P is up 3. 10%. Now the NASDAQ is up by a 10%. Crude oil up just slightly 3. 10 of a percent. Using the New York price, now 73.50 a barrel, Iran's state run Press TV reported that parliament had approved a plan to close the Strait of Hormuz. US Secretary of State Marco Rubio has called on Iran's ally China to try to prevent this. I spoke to Fernando Valli this morning. He's managing director of energy for the investment firm Hedge I Risk Management. Welcome.

[Fernando Valli]

Good morning.

[David Brancaccio]

I have it on my screen here. But when you look at the price of crude oil traded in New York this morning, what does that price tell you?

[Fernando Valli]

There is no real belief from the market that the Strait of Hormuz is going to be closed. Otherwise oil would be significantly higher. There's a fear that at least the shipments are going to take longer. They could be more costly to ensure. But there's no real belief that the Strait of Hormuz itself is going to be closed.

[David Brancaccio]

What accounts for that I mean, we're consulting experts who say it is a possibility that the Iranians could, could do that. They don't necessarily have to, but they might have the capability to do so. So why are the oil traders so chill on that point?

[Fernando Valli]

I think the reason is it's a, very difficult to close, but B, it'd be very costly to Iran itself. Most of its exports are going through the Strait of Hormuz itself and it's not going to be closed on just one side. You'd expect that rivals and the opponents of Iran, us, Israel, others would be very contentious to Iran closing the Strait of Hormuz. And it would mean that the 1.3 to 1.4 million barrels a day of oil that go through Kharg island in Iran cannot get it out of the strait. And that's essentially the lifeblood of the Iranian economy. And on top of that, China, which has been one of its bigger supporters, gets over five and a half to six million barrels a day of crude through the straight of Hormuz.

[David Brancaccio]

Fernando Valli is managing director of Energy at HedgeEye Risk Management. Always good to catch up.

[Fernando Valli]

My pleasure. Thanks for having me.

[David Brancaccio]

The US Senate has a lot of work to do this week on the big tax and spending bill, which is facing some setbacks despite a self imposed deadline of the fourth of July. Marketplace's Nancy Marshall Genser has that.

[Nancy Marshall Genser]

The Senate parliamentarian has ruled that some parts of the huge tax and spending bill violate the rules for reconciliation, which allows legislation to pass with a simple majority vote. Reconciliation only applies to measures that affect the federal budget. Senate Democrats say. The parliamentarian ruled that some provisions in the bill don't meet that test, like a requirement that anyone suing to block Trump administration policies must post a large bond first to cover the government's expenses if it loses. A provision requiring states to shoulder some of the costs of SNAP also failed the test, as did another part that would have cut off funding for the Consumer Financial Protection Bureau. I'm Nancy Marshall Genser for Marketplace.

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[Fernando Valli]

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[David Brancaccio]

Budget cuts and public health for instance, last week there was a listeria outbreak linked to Ready to Eat pasta meals sold at Walmart and Kroger. Three people died and many more were hospitalized. Now there were foodborne illness outbreaks before DOGE government efficiency cuts, but experts worry about further weakening of America's food safety. Marketplace's Kimberly Adams reports.

[Kimberly Adams]

The biggest effect so far, says Barbara Kowalczyk at the Institute for Food Safety and Nutrition Security at George Washington University, has been on the information side of things, especially at the Food and Drug Administration.

[Nancy Marshall Genser]

It's important that you communicate well with both the industry as well as with consumers and other public health agencies such as cdc.

[Kimberly Adams]

Some of the major DOGE cuts targeted administrative and communications staff at food safety agencies. Just the folks you might need to track down and disseminate information about an outbreak. Sandra Eskin is with the advocacy group Stop Foodborne Illness.

[Nancy Marshall Genser]

The whole infrastructure of food safety oversight, surveillance what's happening outbreak when there's a.

[Kimberly Adams]

Problem responding and then trying to put.

[Nancy Marshall Genser]

In place policies to improve food safety to has definitely been impacted.

[Kimberly Adams]

But all the experts I spoke to say you can't say at this point that the Trump administration's job cuts or funding changes have actually harmed food safety. Many fired or laid off staff at food safety agencies have been reinstated, either by administration officials choice or because of court orders. Sarah Sorcher is with the center for Science in the Public Interest. While the workers who carry out the scientific and legal work have largely now been brought back to fda, which should mean that programs like food testing, quality control can be resumed, et cetera. Many workers have simply opted to retire or take work elsewhere, she says. That means the FDA is still about 20% understaffed across the board. Plus food safety funding and staffing at the federal level has been an issue for years, including major cuts to funding for state food safety programs under the Biden administration. And those cuts are, says Stephen Mondernach at the association of Food and Drug Officials, did far more harm than doge.

[Fernando Valli]

When you look at produce, 93% of the inspections are completed by state folks. When you look at milk, grade A milk and shellfish. 100% of the work is done by state folks.

[Kimberly Adams]

Mondernach and other experts say no one outbreak can really give you a sense of how the food safety network is holding up. Better technology means we're catching outbreaks sooner than but, says Don Schaffner, a food microbiologist at Rutgers, in general, you know.

[David Brancaccio]

If we invest less in food safety.

[Kimberly Adams]

I think eventually we'll have less safe food. And that's the case regardless of who's in the White House. In Washington, I'm Kimberly Adams for Marketplace and Novo Nordisk.

[David Brancaccio]

Maker of a top weight loss drug, Wegovy is cutting off online telehealth retailer Hims and Hers after just over a month of partnership. The pharma company accuses Hims and Hers of continuing to sell versions that it says are against the law. The knockoff compounded versions, they're called, were restricted after Wegovy was no longer deemed in short supply. LifeMD and others will still sell WeGovy. All of this has had a slimming effect on Hims and hers stock down 27% now. In Los Angeles, I'm David Brancaccia, Marketplace Morning Report from APM American Public Media.

[Nancy Marshall Genser]

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[David Brancaccio]

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[Podcast Host]

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[Kimberly Adams]

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[Nancy Marshall Genser]

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