Itís a great pleasure to be with you again. I like the wonderful locations that you select for your annual convention; and better yet, I like the people I meet at the Country Meatworks Association of New South Wales. Your warmth and friendship, your ability to have fun together, and your enthusiasm for your business is refreshing. Thank you for inviting me again. I am especially delighted that you invited one of the Directors of our Association to be with you this year. John Duyn, and his lovely wife Rita, are great people as I know you will find out for yourselves this week as you meet and visit with them.

John owns a family business, just like many of you. He truly is "johnny on the spot" in Carlton, Oregon, an otherwise sleepy and idyllic small town in a state that is superbly green, by contrast with the summer-burned brown of California. Oregonians pride themselves on their wonderful environment; I especially love to go there to eat their raspberries in the summer time, and I order roses from an Oregon firm each winter to enlarge my garden collection. I know that heíll tell you lots more about his business, its part in the entire United States business, and I have no intention of trying to steal his thunder! Iím just delighted that heís also your guest this year.

Quite frankly, you should thank your lucky stars that your United States guest is from Oregon, and not from Texas. I heard that ......

Martin has told me about some of the things that youíd like to know about meat production and inspection in the United States. Just as in your country, actual consumption of meat has been going down. All of us have not done as well as we should to inform consumers about how meat fits into a balanced lifestyle and how important its nutrients are for young, growing bodies. One of the problems is the long chain of production, from the farmer and rancher all the way through to the retailer and restaurant. The United States is a huge, populated country; over the past fifty years, the meat industry has consolidated substantially, so that different parts of the country can exploit their natural characteristics. It is for these reasons that just about all of the major abattoirs for beef animals have left the very populous state of California, and that the large scale abattoirs are located in such states as: Wisconsin, Nebraska, Kansas, Iowa and Texas where the land is cheaper than in California, the business environment is more friendly for cattle raising and finishing in feedlots, and the feed supplies for livestock is grown right there. In states like California where I live, and Oregon where John lives, there are ranchers who breed animals, and who have cow-calf operations. The calves then often move back into the midwestern feedlots when the summertime comes and the western grass ranges dry out, and they end up at one of the very large abattoirs in the midwestern states.

My good friend Steve Kay, with Cattle Buyers Weekly, has a large following of Australians who subscribe to his weekly marketing newsletter. I have a few copies of this weekís with me for your advance information. Some of you will be very interested to read the rankings of the large beef packers in the United States, an annual update that he does, in this weekís issue.

Quite separate from the young steers and heifers who are fed to meet high quality specifications (and are then graded by our government grading system) are the U.S. milking herd. California has the largest milking herd in the United States, followed closely by Wisconsin. Spent cows move to abattoirs after their milking life is finished, and California and Wisconsin have some of the larger abattoirs dedicated to this type animal, and also to spent cows from range herds. You will see these firms reflected in CBWís update. This meat is used substantially for further processing, both in hamburger and in cooked meats. Much of it is blended with lean beef that Australia and New Zealand send to the U.S. In fact, some hamburger chains, including Burger King, Jack-in-the-Box, and others insist on a constituent of imported meat. Your lean beef is of excellent quality and blends well with the meat from milking cows to make a good-eating finished product.

You eat a lot more sheep meat than we do in the United States. Somehow, back in World War II, the GIs were fed mutton, and the legend has lingered long in the U.S. Further, we have a relatively small sheep herd in the U.S., certainly by comparison with you and New Zealand. Our herd numbers about 6 million head, and is declining. Per capita consumption of lamb is about one pound per person, and over one-third of that consumption is imported lamb. The U.S domestic lamb producers like to blame New Zealand and Australia because of their poor market opportunities. I have been a member of a Sheep Industry Transition Team for the past year. Weíve tried hard to explain to the livestock members of the Team that the major problem is bringing lambs to market that will meet the quality and consistency standards that consumers want. Your lambs are small, and the meat is sweet and tender. It tastes a little different, being substantially grass fed compared to corn fed finishing in the United States. The lambs coming through the U.S. supply tend to be larger, and unfortunately the nature of the species is to add heavy fat with the additional weight.

For many years, the U.S. sheep industry enjoyed the benefit of a special subsidy: The Wool Act. The tariffs collected by the U.S. government were allocated to the industry representing producers for the purpose of education, research and promotion, and also payments to producers. This government handout was removed from the law in the 1996 Freedom to Farm Act -- the Congress passes a Farm Bill every five years, and there was a strong movement in the 1996 legislation to get the government out in terms of subsidies and fixing prices for agricultural crops. As a consolation to the sheep industry, the producers were able to persuade the government to fund a "Sheep Industry Improvement Center", intended to be a revolving account set up with $20 million, and another two increments of $20 million behind that, to support such projects as marketing alliances, development of "infrastructure", etc. that would assist in making the U.S. lamb industry more prosperous. The Center is still getting organized, and has not awarded any money yet. Itís a great mistake to get the U.S. government bureaucracy into activities that should be driven by the market! Meanwhile, the Wool Act money is running out, and should be pretty well gone by the end of September 1999, the end of the governmentís fiscal year.

Fear of losing the Wool Act funding is a terrible thing! At least it is to those who have been past beneficiaries. It is interesting and worth noting that the activities that were supported by the Wool Act for lamb (and wool production) are supported by Marketing Order check-offs for beef and pork in which importers of Australian meat participate. While the technical arrangements are less than perfect, and in fact the beef check-off is currently being challenged by a dissident group, at least the funds are raised by producers paying a fixed $, usually per animal and sometimes per pound, and the money is managed by a Board of Directors appointed by the Secretary of Agriculture under what is called a Marketing Order. The sheep people tried to develop such a check-off, but unfortunately arrogance got in the way of those who designed the legislation that had to get past the Congress, and although it passed the first time, it was challenged and when the Secretary looked more closely at who voted and how they voted, he disqualified the first vote and ordered another one which then failed.

Now this is all dirty politics in the U.S. of A. We really do have more going on than Presidential dalliances in the Oval Office. I am sure that it is more than you really want to hear. Iíll leave the subject, and if anyone wants to know more, catch me looking at the ocean and Iíll try to tell you.

Martin sent me an assignment list and Iíll run through some of the questions. He asks whether all processors in the United States are members of National Meat Association. My answer is: No, thank goodness! National Meat Association was organized as Western States Meat Packers Association in 1946. It was a break-away group from the American Meat Institute which was formed in 1908 in the shadow of Upton Sinclairís book: The Jungle written about the terrible social conditions in Chicago, at that time a huge metropolitan meat market. Western States Meat Association grew and we became National Meat Association in 1996, because a growing number of firms in other parts of the country felt that we were doing the right things for the industry and were focused on meat, rather than meat and poultry. The kinds of firms that we like to have as members are those that are medium-sized to large firms, focused on meat slaughtering or further processing. Some of these firms, certainly those in further processing, will also handle poultry. In the U.S. there are two statutory authorities: the Federal Meat Inspection Act and the Poultry Products Inspection Act. Some day, they will be merged by a brave and daring Congress, but until such time, firms in the commercial, interstate meat and poultry business must have a Grant of Inspection from the U.S. Department of Agriculture for both species in order to handle both. Some years ago, when these laws were substantially revised, the Congress provided in its wisdom that state inspection programs could continue and the federal government would pay for 50% of the cost, if they were "equal to" the federal system.

This provision has been a bone of contention for many years. The governors and the state lawmakers in some states, like California and Oregon, said: why should we pay anything to provide this service when the federal government will pay the whole thing if we give it up. Twenty-six states, including Texas, Wisconsin and Nebraska, still have a state program, and provide inspection services to mostly smaller-sized firms. Neither California nor Oregon, where John Duynís plant is located, have a state program. However, the products from state-inspected firms may not be shipped interstate -- only within that state. There are yet other firms that custom slaughter and wrap product, mostly for the home freezer trade. If they are slaughtering the family cow, and it is going back to the family, it must be marked "not for sale" and go back to the family that brought the animal in. The slaughter is exempt from the federal law.

If you add all the constituent parts, there are about 10,000 plus/minus meat and poultry plants under federal and state inspection in the United States. So, thank goodness they donít all belong to us; we have about 300 firms, and between them they probably have about 400 plants. Once again, we try to focus on those firms that are a good fit with NMA. We have some of the industryís largest; we have many in the mid-size range; and we have a few that are very small.

To give you a dimension, the plants with 500 or more employees, the so-called "Large" plants, were required to implement HACCP in January 1998, and there were just in excess of 300 plants that qualified. Poultry out-numbered meat by 2:1 just because there are so many more workers in poultry operations. This coming January, plants (federal and state inspected) employing between 10 and 500 workers will implement HACCP, and we expect somewhere around 4,000 plants to come under mandatory HACCP.

The Meat Authority in the United States is the U.S.Department of Agriculture. The inspection program is funded by the Congress annually in the huge billion dollar Ag. Appropriations Bill. President Clinton vetoed it ten days ago at the urging of Democratic legislators from the farm states, including Senator Tom Daschle from South Dakota, the Ranking Minority Leader in the United States. They want additional billions of dollars to help farm state constituents cope with the market conditions of a plentiful supply and low prices. As one of our political leaders wrote last week, the way the deals were cut in Congress make our President William Jefferson Clinton look more like William The Conqueror! The Democrats have used their political power extraordinarily well in the waning days of the Congress to get issues that will help them get re-elected next month. As I left town on Friday, the computer scribes were trying to catch up with the political solutions; we believe that the Country of Origin issue is still on its way to a study committee; meat pricing of boxed meat may be a one-year pilot study, or some such thing.

The Food Safety & Inspection Service is the U.S. government agency, within the U.S. Department of Agriculture, that developes the regulations and sends out inspectors to enforce them -- about 6,000 inspectors. As I am sure some of you know, we are in the middle of implementing a huge regulation called the "Mega Reg" of which HACCP is but one part. In 1996, every firm under inspection, federal and state, was required to have written Sanitation Standard Operating Procedures. All slaughter plants are required to conduct generic E. coli testing on carcass beef, and Salmonella testing by the USDA is being phased in. For those of you who like the Internet, we urge you to look up our page "" where you can quickly link with government pages of interest to you and tell you more than youíll ever want to know about such programs.

Martin said that someone wanted to know our associationís policy on Quality Assurance and/or HACCP from producer to consumer. We think that every segment in the production chain should meet standards for both quality and safety. It gets complicated, because the government is a great motivator of strong standards, and does not have the same kind of authority either back at the ranch or forward in the restaurant or retail store. Livestock producers in the United States are terrified at even the thought that the federal government might regulate them. Through their organizations, they have developed Quality Assurance Practices. Iíve brought some pamphlets to show you what the Pork industry has done; they are the most aggressive and their material is good. The beef industry is making progress, but many producers are so terrified that they will be identified as a source of E. coli O157:H7 that they are in denial that it may exist on their farm or ranch, and certainly that it may be associated with their livestock. We think that there is room to improve the handling of livestock to ensure just plain good handling practices and clean-up back on the ranch. And it has always been our policy at NMA that if we are faced with adversity, letís not waste time denying our responsibility; letís get on with fixing it

At the other end of the stream, we again have what we call: The Model Food Code. This is a document developed by the Conference on Food Protection, a quasi government entity, and made available to all fifty states who may then choose it in its entirety or select parts to include in state standards. Each state has sovereign authority for food operations within its own borders. Thatís the effect of a federal system. Thus, even five years after the disastrous Jack-in-the-Box foodborne illness from E. coli O157:H7 in the Pacific Northwest, we still donít have guaranteed, uniform cooking standards in restaurants throughout the fifty states, even though they are prescribed in the Model Food Code.

I read about a survey recently in which consumers gave high confidence marks to farmers and retailers, and low ones to meat packers and the government. This is in directly inverse proportion to the government oversight of these parts of the farm to fork continuum. The government, with its public access to the detailed records of packers and processors, has skewered us! Make no mistake about it.

Now, if I didnít spend so much time talking about food laws, we could spend a whole day on environmental issues. They are important, to this generation and certainly to future generations. Often, the requirements seem incompatible with todayís life styles. As with any movement, there is a broad spectrum of views, with extremes on each end. It is my opinion that politically the United States has moved a little to center in the past few years. But I would hesitate to say that this is permanent, especially since this is a major priority of Vice President Gore who is waiting in the wings. At the rate that we are burying ground beef that is allegedly tainted with E. coli O157:H7, the good Lord himself knows what will sprout up!

South American meat, at this time, is a niche market in the United States. Some is entering the United States, and with strong promotion by, I suspect, the government of the exporting country, it is moving in the marketplace. I do not see it as the constituent part of the U.S. meat supply that Australian and New Zealand meat has become. Your two countries have very strong ties to the United States. When I want an expert opinion, as I did a few months back, I am not at all hesitant to call your Dr. Barry Shay, an eminent microbiologist with your Meat Authority, for advice. New Zealand, Australia, Canada and the United States are what is known as the QUAD countries, and they meet regulatory to discuss and share regulatory information and philosophy. I think this is an excellent activity, and I am strongly supportive. Other wannabes lag far behind the QUAD countries; theyíll keep trying to catch up,

And having covered all of Martinís questions from members, I get "free time" talk now. Iíd like to tell you in some closing comments some of what I see as the big issues facing the meat industry, not just in the U.S. but worldwide.

1. Worldwide, but especially in modren, industrialized societies such as North America, Europe, and Australia and New Zealand, we see consumers cutting their meat consumption as a matter of choice. They are substituting both other flesh proteins, including poultry and fish, and some are adding to the growing vegetarian block. This should be of greater concern to all of us than it is; meat has been part of our diet for centuries, even back in Old Testament biblical times. It has built strong, healthy bodies, and election to reduce or even eliminate its role in the diet could have serious consequences for future generations. More needs to be done on a unilateral basis to position meat as a healthful, nutritious part of a balanced diet.

2. Those who think otherwise are extraordinarily clever at preying on our weaknesses. The beef industry, world-wide, is vulnerable when our meat, specifically our ground beef, may cause illness or even death because of invisible microorganisms. We must solve the E. coli O157:H7 problem. It has been with us, in real terms, since the Jack-in-the-Box outbreak that sickened over 500 people and 4 deaths of our most vulnerable, little children, in 1993. Weíve made progress, but it is not enough. Weíve moved into an era of extraordinary government and private testing, despite the known fact that we canít "test" it out of the product, and it occurs so randomly that there is no statistical confidence in the number of tests we run. Thereís more misinformation than information. One of my members, distraught by the stress of the publicity and government allegations that his ground beef was the source of E. coli O157:H7 illnesses and linkage to one death in a Water Park in Atlanta, Georgia, took his own life. The linkages were made by DNA-type testing. Just the end of last week, Frankís widow called me, because she read, yes read, in the local newspaper, that new tests showed there was not a link. This is a travesty! Her husband, under the pressure of scrutiny by government regulators and the victim of a midnight raid by government officials who even walked out with his computer and all his records, went out and killed himself the next day.

These are perilous times for our industry. The incidental warfare between species, between countries, and even between organizations must stop. Our forefathers learned that a team of six horses could pull a heavier weight that six individual horses could pull. We must learn to team together on the vital issues for our survival, let alone prosperity! It truly is time to look to the major issues that face the meat industry: rebuilding consumer confidence in the safety of our products, and building quality back into the image of meat.

Thanks for inviting me, and for inviting John Duyn, to be part of your team here in beautiful Ballina. Letís keep talking. As I was told the other day by a wag: If the English would learn to speak, and the Irish would learn to listen, together they could remake the whole world!