NATIONAL MEAT ASSOCIATION h 1970 Broadway, Suite 825, Oakland, CA 94612

(510) 763-1533 Fax (510) 763-6186 h Email Address: [email protected] h http://www.nmaonline.org

Edited by Jeremy Russell

July 2, 2001

MANDATORY PRICE REPORTING CONFERENCE

USDA’s Chief Economist Dr. Keith Collins released his report on mandatory price reporting this afternoon. It is available at http://www.usda.gov/oce/mp-report/index.htm.

Dr. Collins and USDA’s Agricultural Marketing Service have scheduled a meeting for 2 o’clock on Tuesday, July 3, at the Department where Dr. Collins is expected to review his findings and AMS will describe how it proposes to remedy the confidentiality concerns that have limited the qualtiy and quantity of data that they have been able to generate in the mandatory system.

NMA Executive Director Rosemary Mucklow plans to attend the meeting. She has expressed her concern about the scheduling of such a meeting with less than 24 hours notice on the afternoon immediately preceding Independence Day. Such arrogant disregard for his subjects cost George III his country in 1776.

The finding of the Chief Economist mirror the urgent complaints voiced by the industry since MPR was introduced:

· The implementation timeframes did not provide sufficient time to fully develop and test the system

· AMS did not develop a sufficiently rigorous plan to test and validate formulas and algorithms

· Incomplete test data was utilized to test the accuracy of the system

· Appropriate testing methods were not applied after implementation

· Lack of Industry involvement hampered testing the LMPR system's accuracy

It will come as no surprise to readers of Herd on the Hill that Mandatory Price Reporting as designed by producers, filtered through Congress, implemented by AMS and foisted on packers and processors has had negative market impact. Since it was launched on April 2 MPR has, in the words of one Associated Press reporter, “suffered technical glitches, reporting errors, and complaints from farmers that they were getting less market data than before.” Fortunately, National Meat Association and others are looking for a way out of this deplorable state of affairs, a way to keep the quality of the voluntary system in combination with the level of reassurance that MPR is meant to provide.

NMA today received a letter from USDA/AMS Acting Administrator Kenneth Clayton in response to a request to make MPR for lamb a better fit with the make-up of the industry. The letter expressed gratitude for the suggested improvements, which call for adjusting all lamb reporting basis to a central location with all lambs included in one report.

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NEW MEAT HEALTH STUDY

Fresh red meat may not be cancer causing at all according to a study done in Lyon, France by the World Health Organization’s International Agency. However, the study does suggests that processed meats could increase the risk of bowel cancer by 50%. In previous studies fresh and processed meat had been linked together, now researchers are looking toward separating the two. These results are considered preliminary, but experts say the study does show that any connection between meat and cancer is more complex than previously thought. “The only firm conclusion is that lumping fresh and processed meats together is inappropriate,” said a professor at the Institute of Human Nutrition.

E. coli O157:H7 RECALLS

Excel is voluntarily recalling 190,000 pounds of fresh ground beef and pork from its Newman, GA plant that may be contaminated with E.coli O157:H7 after a suspected illness was associated with the product this week. The products were distributed to Kroger stores in Alabama, Georgia, Kentucky, South Carolina and Tennessee. Excel has receieved a flurry of press coverage for this recall. Nearly a year ago, the another Excel plant was linked to an outbreak of E. coli after 109 people became ill and a 3-year-old girl died from eating foods that were cross contaminated with raw meat at Sizzler restaurants in Milwaukee, WI. The Milwaukee outbreak led to negative media reports which misinformed the public on the cause of the outbreak, blaming the government and industry instead of the errors of restaurant workers who failed to follow strict hygiene principles to prevent cross contamination.

Although troubling, the higher incidence of E. coli O157:H7 outbreaks in summer months is no surprise. Warm weather encourages bacterial growth and is therefore less forgiving of any oversights by food handlers or consumers. FSIS microbiological sampling last week led Palmer Fish Company Inc. in Rochester, NY to voluntarily recall 4,000 pounds of fresh ground beef patties that may have been contaminated with E.coli O157:H7. No illnesses have been reported.

USMEF ANNOUNCES REORGANIZATION

U.S. Meat Export Federation (USMEF) announced a refocusing of it senior staff roles to center on higher levels of service to its members and funding partners, reports CALF magazine in its June issue. USMEF says it will now be able to improve USMEF member support and advance the objectives of the funding organizations they work with daily to put U.S. meat on the world’s table. As part of this refocusing, Paul Clayton will continue as vice president, but Tom Lipetzky is being promoted to vice president of international programs and Richard Fritz will become vice president of trade development “I am excited about the changes we are announcing,” said USMEF CEO Phillip Seng. “These are three people with outstanding credentials.”

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TYSON/IBP

This is a story of two giants becoming a center of the plate behemoth. IBP and Tyson are now so far down the road into their merger, once seen as improbable at best, that they have already announced a new board of directors. IBP Chairman and CEO Robert Peterson and its President Dick Bond have agreed to join the Tyson board upon completion of the agreement. Under a Stipulation and Order modifying the existing merger agreement, Tyson will acquire all outstanding shares of IBP on the same economic terms provided by the original agreement.

As in the original agreement, Tyson will pay $30.00 in cash for 50.1% of IBP's common shares and the remaining IBP shares will be converted into Tyson Class A common stock. The stock portion of the consideration is subject to a maximum exchange ratio of 2.381 and a minimum exchange ratio of 1.948 Tyson Class A common shares if Tyson’s average trading price for an agreed period of time is outside the range or “collar” of $12.60 and $15.40.

Under the modified agreement Tyson will commence a cash tender offer to purchase up to 50.1% of the outstanding shares of IBP no later than July 5, 2001 and will complete the offer no later than September 1, 2001, subject to terms and conditions set forth in the merger agreement, as modified. Conversion of remaining IBP shares will occur no later than November 15, 2001, subject to terms and conditions set forth in the merger agreement, as modified.

The man who made the merger happen, Judge Leo E. Strine, has become something of a celebrity since his order. According to the Wall Street Journal, “Once criticized for lacking business experience, Judge Strine now is considered a key player in the influential court that oversees the nation’s important business cases, though he still has his critics.”

The fact is, although consolidation has been a key factor in the meat industry for many years, the entire merger has many critics. Many companies perceive that the new behemoth will begin to cut into their bottom line as it crashes through the marketplace. Analysts fear that it can only drive concentration. Already, Excel Corp. has announced plans to purchase Emmpak Foods, allowing it to expand into value-added processed meats. For an analysis of effects of the Tyson/IBP merger, see Steve Kay’s Monthly Meat Lookout in this week’s newsletter.

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ELIMINATING Listeria

The Department of Food Science at Pennsylvania State University recently conducted a study to find a way to kill Listeria monocytogenes (Lm) in fermented products. The study found that a combination of low pH and high heating temperatures resulted in a more than 5-log reduction of Lm per gram of sausage mixture during the processing of Lebanon bologna. The study conclude that an existing commercial process, which was validated for destruction of E. coli O157:H7 was also effective for the destruction of more than 5 log of Lm.

MOTHER JONES ARTICLE FICTITIOUS OFFENSE

An article featured in Mother Jones magazine this month, “The Chain Never Stops,” features one of the most disgusting and outlandish attacks yet on the meat industry by the latest anti-big business crusader Eric Schlosser. Schlosser, the author of Fast Food Nation, also published a scathingly distorted tirade about food safety in USA Today last week. Schlosser believes that no less than the darkest of corporate malfeasance is responsible for workplace accidents and food safety problems and, like Upton Sinclair before him, he seeks through vitriol rather than fact to sway public opinion against the U.S. meatpacking industry.

IBP responded to Schlosser’s attack with the following statement to Mother Jones:

Upton Sinclair's 1906 book 'The Jungle' was fiction. The same is true of significant parts of Eric Schlosser's recent article in Mother Jones entitled “The Chain Never Stops.”

Contrary to the impression left by Mr. Schlosser's exaggerated portrayal of the meat industry, we do care about our employees and do not want to see anyone hurt on the job.  Most importantly, it is morally and ethically the right thing to do. It also makes economic sense from an employee retention and workers compensation standpoint. Our company works hard to make sure any injured employee receives proper medical treatment, as well as the workers compensation they deserve. 

Guest Choice Network, who’s founder Richard Berman will speak at NMA’s Summer Board Meeting, also took issue with the article. It noted in its newsletter that, “perhaps coincidentally, Mother Jones is being bankrolled by marketers of vegetarian, organic, and so-called ‘natural’ foods, all of which would stand to benefit financially if domestic meat consumption were to slow down in response to Schlosser's tirades. The issue in which his story appears includes nearly 10 pages of paid advertising from interested parties including Eden Foods, Nasoya, Spectrum Natural Foods, White Wave, Nutrition Now, and Imagine Foods. And, of course, an ad for Schlosser's book.”

NATIONAL MEAT ASSOCIATION

NMA - East: 1400 - 16th St. N.W., Suite 400, Washington D.C. 20036 Ph. (202) 667-2108

NMA - West: 1970 Broadway, Suite 825, Oakland, CA 94612 Ph. (510) 763-1533 Fax (510) 763-6186

Edited by Jeremy Russell

July 2, 2001

LEARN SYSTEM

Pat Abraham, a staff officer in the Office of Public Health & Science, FSIS, explained to members of Eastern Meat Packers Association (EMPA) at their Convention in Vermont on June 22 the details of the Laboratory Electronic Application for Results Notification (LEARN) system which the agency expects to implement this summer.

Laboratory results for individual samples will be made available electronically to the establishment from which they were taken so long as that company has completed the documents necessary to receive them by e-mail. They will be provided also to the assigned inspector. Firewalls will assure that non-authorized people do not gain access to the data. As sero-typing on micro samples is completed at USDA’s Ames, IA laboratory, they will also be made available. Residue results are not being reported by e-mail – they go to the Tech Center and the IIC. Also, results on canned foods, extraneous material, pathology and investigatory samples will not be reported electronically.

Currently, the agency is running about 6000 E. coli O157:H7 samples; 10,000 Listeria monocytogenes on RTE products; 10,000 Salmonella on RTE products and 60,000 Salmonella on Pathogen Reduction/HACCP performance standards. The 60,000 are not being reported individually, only in completed sets. NMA has long believed that it would be in the public interest that the Salmonella performance tests be reported individually, rather than after the completion of a full sample set which runs for 53 days, or about 11 weeks. The individual results are not as useful in terms of trying to identify the reasons, and especially when, obtained months after the testing through FOIA, they are found to differ from the results of companion testing done by the company. NMA has submitted a request to FSIS that the Salmonella tests be made available to companies who request it.

NMA plans to host a teleconference on the LEARN system on July 12 at 9:00am PST. Contact NMA Manager of Technical and Educational Services Teresa Frey at (510) 763-1533 for details.

ERGONOMIC RULES

The Labor Department is moving to suspend a Clinton administration plan to require employers to separately report workplace nerve, tendon or spinal-disk injuries, caused by repetitive motion reports the Wall Street Journal. The department plans to implement new rules on how companies should log workplace injuries, but will propose suspending a requirement that employers identify musculo-skeletal injuries sustained on the job. According to the Bureau of Labor Statistics, these types of injuries accounted for more than one third of the 1.7 million workplace injuries reported for 1999. The department said it wants to delay the musculo-skeletal reporting requirements for a year until it decides how to address such injuries.

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PATHOGEN REDUCTION IN LIVE ANIMALS

USDA’s Agricultural Research Service (ARS) has developed a method to prevent pathogens in live animals by feeding them low doses of sodium chlorate, announced the National Institute for Animal Agriculture (NIAA) in its Spring 2001 Cattle Health Report. ARS found that sodium chlorate, fed to pigs and cows before slaughter, selectively kills Salmonella typhimurium and E. coli O157:H7 while also reducing traces of the harmful bacteria in the animal’s digestive tract. Besides adding the chlorate to feed, the researcher suggests adding chlorate to drinking water for animals upon arrival at slaughtering facilities. Though awaiting FDA approval, ARS is seeking a cooperative research partner to further the development of these results.

NEW METHODS TO FIGHT PATHOGENS

The Associated Press ran an article last week describing various types of new and upcoming methods being introduced to the industry to fight food-borne pathogens. One of the more recent methods, presented at the Institute of Food Technologists convention, found that prune puree when added to ground beef in specific amounts can kill more than 90% of the E. coli O157:H7 due to acids the prunes contain. Other research indicates that a combination of cinnamon and carbon dioxide can destroy E. Coli in apple juice, a solution of salt and phosphates can kill Campylobacter and the herb ginkgo biloba, said to lower blood pressure, inhibit blood clotting and relieve muscle pain, is deadly to Listeria. A high-pressure system developed by Flow International has developed a method in which food is submerged in water and subjected to enough pressure to fatally damage bacteria. “There is a lot of work going on to see what works best,” said National Food Processors Association Director Alice Johnson.

FSIS Delivers Humane Slaughter Report to Congress

On June 14, FSIS delivered the report entitled, “Current Food Safety and Inspection Service Laws and Policies Regarding the Humane Handling or Inspection of Nonambulatory Animals,” to the House and Senate Agriculture Appropriations Subcommittee. The House Report accompanying the FY 2001 Agriculture Appropriations Act direct the Under Secretary for Food Safety (a position still currently vacant) to review the current laws and policies regarding the handling or inspection of nonambulatory animals and report back to the Committee. Access the report on the FSIS web site at http://www.fsis.usda.gov/oa/congress/rep_nonamb.htm.

WASTE & MANURE MANAGEMENT REGULATIONS SURVEY

A preliminary copy of an updated National Association of State Departments of Agriculture (NASDA) “State Survey on Waste and Manure Management Regulations” has been posted at http://www.nasda.org/. This new version of a survery originally completed in December 1998 reflects information received since March 1, 2001, from Alabama, California, Illinois, Iowa, Kansas, Kentucky, Maine, Missouri, North Dakota, Ohio, Oklahoma, Oregon, and Wisconsin. NASDA plans to use the data in discussions with the Environmental Protection Agency about CAFO (Concentrated Animal Feeding Operation) rules. NASDA also uses the survey to explain state activities and programs to other federal agencies, policymakers, agricultural and environmental organizations, and the media.

BURGER KING MAKES NEW ANIMAL WELFARE PLEDGE

Burger King Corp. pledged June 28 to serve only meat from animals that have been housed, treated and slaughtered with great care, the New York Times reported. The company announced that it would begin by checking some 160 slaughterhouses from which it buys meat to ensure proper stunning and by insisting on expanded cages for its chickens. “We have a moral obligation to treat [livestock] humanely, and, when we do slaughter them, to do so in a painless manner,” said a company spokesman. Burger King is now the second major fast food chain to insist on animal welfare reforms above and beyond what is required by law from its suppliers; McDonald’s introduced animal welfare audits last year.