Shippers often call me to discuss the results of their timely USDA inspection and for help determining if it meets contract specifications. There are two distinct types of defects listed on the inspection that can help you determine that. When reading a USDA inspection certificate, the inspector will list two types of defects: Quality (or permanent) and Condition. Under the terms of an FOB or Delivered no-grade contract, you should only focus on the condition defects. Quality defects, unless in excess of 33%, are not scoreable against meeting Good Delivery. Condition defects, on the other hand, affect the merchantability of the product, which determines whether your shipment makes contract.
What’s the difference?
A quality defect is permanent and does not continue to worsen over time, meaning you would have the same amount of permanent defect(s) at shipping point that you would have at destination. Examples include hollow stem in broccoli, seed stem in lettuce or celery, misshapen bell peppers and scarring in citrus.
In contrast, condition defects progress with age, such as decay, live insects, bruising and discoloration of your product.
The Perishable Agricultural Commodities Act (PACA) has developed guidelines to help determine if product sold on a “No Grade Contract” meets contract specifications as shown in the FOB Good Arrival Guidelines Table.
When reviewing a USDA inspection, if you require clarification on the type of defects listed (quality or condition), please do not hesitate to contact me at 949-885-2392 or firstname.lastname@example.org to discuss.
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