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 Kiran Kernellu

January 6, 2003

WELCOME TO 2003!

Any way you cut it, 2002 was a tough year for the meat industry. Without recounting the events, let’s think of it as a watershed turn-around and that 2003 is the year for growing optimism and opportunity. That’s the way we see it at NMA!

Remember the clichés: It takes very hot fire to make good steel. And when the times get tough, the tough get going! We’ve experienced very hot fire, and we’re ready at NMA to get going to better times for the meat industry!

And remember the bell shaped-curve: Coming out of a turn-around, the growth is slow, but those tough folks that get going have an opportunity to maximize growth right ahead of them! NMA is poised and ready to support its members to go full steam ahead. Remember what William Jennings Bryan said: “Destiny is not a matter of chance; it is a matter of choice. It is not a thing to be waited for; it is a thing to be achieved.”

Today, NMA’s Executive Director is on her way to San Antonio to participate with beef industry leaders in a Beef Summit, sponsored by NCBA and supported by industry and academia. Industry’s highest priority is to ensure that it delivers the safest possible meat to consumers. NMA cannot do this alone. But through cooperation with the industry leaders and organizations, real progress can be made.

NMA is planning an extraordinary event for the meat industry in its MEATXPO and Convention in Las Vegas the first week of March. NMA’s event is designed to satisfy the needs of large and small companies. It provides a unique opportunity for interactive dialogue, plus an unparalleled environment for attendees to learn and obtain information. There are also great supporting events, on the Expo floor, at the highly acclaimed Gourmet Sausagefest and more. NMA appreciates the support of its exhibitors, of cooperating organizations, including Southwest Meat Association, Eastern Meat Packers Association, and the American Meat Science Association (AMSA), which hosts its annual NMA/AMSA Science Conference in conjunction with MEATXPO.

And finally, NMA’s elected leaders are in charge of directing our agenda! NMA President Ted Miller, with the full cooperation of the Strategic Planning Committee, is actively recruiting leaders to serve on NMA’s committees and its Board. By design, NMA’s directors serve only consecutive three-year terms. This ensures development of new generational thinking for our industry. Individuals interested in making a commitment to serve as Directors are encouraged to contact Committee Chairs or members of the NMA Nominating Committee which will report at the Annual Meeting on Wednesday, March 5, in Las Vegas.

Are we excited about the year 2003? You bet we are! It’s our industry destiny. It’s a matter of choice, and it’s ours to be achieved!

JOIN US AT NMA’S MEATXPO‘03!

Sunday, MARCH 2- Wednesday, March 5, 2003

RIO ALL-SUITE CASINO RESORT,

LAS VEGAS, NV

Page 2

RESOLUTIONS

The current preoccupation with obesity may have prompted many to add dieting to their lists of resolutions for 2003. But some information indicates that the “obesity epidemic” talk promulgated in the recent past is mere hype. An exercise regimen may be a better resolution to ward off obesity.

The National Center for Policy Analysis (NCPA) website relayed that “the weight gain over the last century is equivalent to a 30-pound gain for a 6-foot man. But only in the last 10 years have the calories per person per day climbed significantly over 1909 levels. This suggests that most of the weight increase is due to too little exercise, not too many calories.” The Bureau of Labor Statistics “found that about 40 percent of the growth in weight in the last 20 years has been caused by the increased supply of food and 60 percent by the increase in sedentary employment.” Further, the Center for Consumer Freedom reported that Harvard University doctors Michael Glueck and Robert Cihak said, “statistically – and despite all the other fashionable fears – we’re actually getting healthier and living longer, better lives.”

WATCH THOSE LABELS!

An article about the new “Consumer Health Information for Better Nutrition Initiative,” entitled “Healthy Labels” appeared in last week’s Herd on the Hill. It seems that there are some groups that are dubious about labels touting the healthfulness of a product, despite the fact that this new initiative will attest to the accuracy of such labels. The new Food and Drug Administration (FDA) task force charged with overseeing the veracity of consumer information has already issued guidance and is building a task force to further the reliability of “healthy labels.”

According to the California Poultry Federation (CPF) Weekly News Update, the Physician’s Committee for Responsible Medicine (PCRM) has sued Tyson Foods, Inc. in an attempt to prevent the company from claiming its meat is all-natural and “heart-healthy.” The report pointed out that the USDA regulates any claims the company makes, according to Tyson. While PCRM claimed that regardless of how it is prepared, chicken is high in saturated fat and cholesterol, the American Heart Association has certified some of Tyson’s chicken products as “heart-healthy.”

In spite of the labeling controversy, meat consumption has risen steadily. In fact, according to a recent National Institute of Animal Agriculture (NIAA) Weekly News Bulletin, meat consumption has risen 32% in the past 40 years! Meat consumption rose 12% in just the past 20 years. Consumption rose 2.5% from 2001, 1.9% of which was a rise in beef consumption. According to a recent New York Times article, President George W. Bush appreciates beef. He reportedly told visitors at The Coffee Station, a small Crawford, TX café, that he “recommend[s] the burger.”

DON’T FORGET TO RETURN YOUR SAUSAGEFEST ENTRY FORMS BY

FEBRUARY 15, 2003!

Contact [email protected] for more information…

Page 3

FRAUGHT FREE LUNCH PROGRAM

The Oakland Tribune recently reported that the school free lunch program is in overuse. Reportedly, government and other studies estimate a 27% overenrollment. The Bush Administration is mulling over an option that could reduce the estimated $1 billion per year the program wastes.

As part of the 2004 budget proposal, parents may have to prove that they are low-income to qualify their children for free or reduced-price school lunches. Current requirements only necessitate a signed enrollment application with no proof of income. Reportedly, auditing is infrequent. USDA, which administers the program, has advocated additional auditing.

Federal government regulations stipulate that states audit 3% of applications received, but not that the results be shared with Washington, according to the Tribune. Since the school lunch program is used as a poverty gauge, a basis for awarding funds from educational programs, much more money than just the school lunch program is involved. Rep. George Miller’s (D-CA) spokesman Daniel Weiss said in the Tribune report, “They [the White House] always go after programs involving poor people, suggesting that’s where the abuse is. If they’re really interested in ferreting out inefficiencies, why don’t they look at corporations relocating to the Bahamas?” Amy Call, spokeswoman for the White House Office of Management and Budget (OMB) was reported as stating that the Administration’s goal is not to save money, but that “[they] want to ensure the integrity of the program and make sure the funds really are targeted to the most in need.”

RISING RESTAURANT SALES!

The National Restaurant Association (NRA) forecasts a 4.5% increase in restaurant sales in 2003. That would equal $426 billion in sales for the new year. The 2003 Restaurant Industry Forecast also predicts that on a typical day in 2003, the restaurant industry will post average sales of nearly $1.2 billion!

According to the NRA, should 2003 sales turn out as predicted, the restaurant industry would log twelve consecutive years of growth. According to the executive summary of NRA’s report, “in 2003, an improving economy and continued growth in disposable personal income will be the catalysts to propel the restaurant industry into another year of real growth.” For more information, visit NRA’s website: http://www.restaurant.org/.

Reassessment of HACCP Plan To Meet the Revised

E. coli O157:H7 Requirements

JANUARY 9, 2003

Los Angeles, CA

Space is limited, so register early!

EXPE EXPERT SPEAKERS:

Walter (Mickey) McEvers and John Miller

HACCP Consulting Group, LLC

Fairfax, VA (703) 385-1989

NMA REMEMBERS DONALD W.S. LAU

NMA was greatly saddened to learn of the death of Don Lau on December 24, 2002. He was 75. Don expanded Palama Meat Co. from a one-man meat market in Kalihi into the largest meat processing company in Hawaii. He was a charter member and former president of the Meat and Poultry Association of Hawaii, and his company was a member of National Meat Association and its predecessors. He sold the company in 1997. Don, in his 44 years in the meat business, always reached out to personally welcome visitors from the mainland, making them feel right at home in Hawaii, often in a restaurant serving the finest Chinese/Hawaiian food. We extend to his wife, Bernadette, his son Duane, and other family members our condolences.

NMA REMEMBERS DAN MARTINELLI

Dan Martinelli, owner of Martinelli Poultry Co., a 72-year-old business in San Leandro, died Monday, Dec. 30, 2002. He was 89. We extend our condolences to his family.

NMA reports news items that are of special interest to its readers, and provides information that they may want to be able to access. Below are links to the Federal Register, AMS, APHIS, and FSIS, respectively.

http://www.access.gpo.gov/su_docs/aces/aces140.html

http://www.ams.usda.gov/

http://www.aphis.usda.gov/

http://www.fsis.usda.gov/

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 Kiran Kernellu

January 6, 2003

DIVIDEND TAX REFORM-GOOD FOR AGRICULTURE

Tomorrow President Bush will announce a proposal to end the double taxation of dividends. During Sunday’s talk shows, the media and the not-so-loyal opposition were building a feeding frenzy against this long overdue reform.

Double taxation of dividends has been one of the driving forces behind corporate concentration in both agriculture and other industries. It's quite simple: because Congress has made it more attractive for successful companies to reinvest their earnings in the purchase of other companies, rather than to pay earnings out as dividends, big companies keep on buying up little companies, big packers buy up little packers and old tech companies buy up new tech companies. Nowhere is the issue of concentration more sensitive than in agriculture, yet some of the same legislators who want to impose regulatory controls on corporate mergers are now speaking out against dividend tax reform, which would remove a major incentive for these mergers.

The tax incentives for corporate concentration only begin with the double taxation of dividends. All corporations are entitled to substantial deductions for dividends received from other domestic corporations, and when one company owns 80 percent or more of another company’s stock, all of the dividends paid by the subsidiary to the parent are tax-exempt. These policies amount to the government favoring reinvestment by corporations, rather than by the individual stockholders who own corporate stock. The President's proposal for dividend tax reform is not a panacea for concentration, because shareholders will still look to growth companies to reinvest in their growth businesses, but dividend tax reform will return a greater degree of reinvestment responsibility to shareholders.

Another advantage of dividend tax reform is that it will help to deter and regulate some of the funny money corporate accounting for which Enron has become the poster child. During the 1990s the stock market soared on the basis of corporate "earnings" which grew robustly quarter after quarter. Too often those “earnings” were based on tax leveraged accounting concepts such as EBITDA (Earnings Before Interest Taxes Depreciation and Amortization) or “free cash flow.” Dividends which should be one of the most obvious measures of corporate earnings, have been one of the least used, because dividends have been double taxed. By eliminating double taxation, there will be more incentive for companies to pay dividends and more reason to use and compare dividends as a meaningful measure of earnings and profitability.

The President's proposal for dividend tax reform, like his proposals for estate tax reform, will be good for agriculture. Nothing will temper the artificial incentives for corporate concentration faster or better than rationalization and simplification of the tax code.

JOIN US AT THE AMSA/NMA WESTERN SCIENCE CONFERENCE – MARCH 5-6, 2003!

(Immediately following meatxpo ’03)

Page 2

US STANDARDS FOR LIVESTOCK AND MEAT MARKETING CLAIMS

USDA's Agricultural Marketing Service (AMS) published a notice in the Federal Register on December 30, 2002 entitled “U.S. Standards for Livestock and Meat Marketing Claims” to request comments on “proposed minimum requirements for livestock and meat industry production/marketing claims.” Written comments, and suggestions for additional marketing claims should be sent to Chief, Standardization Branch, Livestock and Seed Program, AMS, USDA, Room 2603-S, Stop 0254, 1400 Independence Avenue, SW., Washington, DC 20250-0254; fax (202) 720-1112; e-mail [email protected]. Comments must be received on or before March 31, 2003.

USDA will provide third-party verification for livestock and meat industry companies that make claims to distinguish products. Claims will be verified through examination of the product or through documentation and auditing of the production process. USDA is proposing to establish minimum requirements for common production/marketing claims that may be used in voluntary USDA Certified or USDA Verified programs for the livestock and meat industries.

RESIDUE TESTING PROCEDURES

Today FSIS published a notice entitled “Residue Testing Procedures; Response to Comments” in the Federal Register. Access the Federal Register notice at: http://a257.g.akamaitech.net/7/257/2422/14mar20010800/edocket.access.gpo.gov/2003/03-212.htm. The Agency issued the notice to address comments that it received on its August 6, 2001 Federal Register notice, “Residue Testing Procedures,” which announced that FSIS was “changing the action that it would take when livestock or poultry that are presented for slaughter come from producers and others who have previously marketed such animals that contain violative levels of chemical residues.” According to the notice, FSIS will now post the names and addresses of the sellers of livestock and poultry who the Food and Drug Administration (FDA) has determined are responsible for the repeated sale of livestock or poultry that contain violative levels of chemical residues on its website. FSIS instituted this action partly in response to a petition submitted by NMA and other industry organizations that worked together as a Residue Working Group. The repeat violators alert list (RVAL) may be found at http://www.fsis.usda.gov.

PROCESSORS/PRODUCERS RESPONSIBILITIES UNDER COOL

The Food Marketing Institute (FMI) has released suggestions and steps retailers should take in contracts with their suppliers for the commodities covered for country-of-origin labeling. Contact NMA Government Relations Liaison Shawna Thomas for more information at [email protected].

FSIS NEWS

FSIS Administrator, Dr. Garry L. McKee, has announced more staff changes. As part of the funds connected to biosecurity, FSIS received authorization for 20 additional Food Inspector (Import/Surveillance/Liaison) positions. FSIS has filled five of these positions and is in the process of filling the remaining 15. The additional staffing will help to increase FSIS liaison efforts with APHIS, FDA, and the U.S. Customs Service regarding surveillance activities or potential biosecurity concerns associated with imported products. All assignments became effective December 30, 2002.

CHANGE TRANSMITTAL FOR DIRECTIVE 10,210.1

On December 19, 2002, FSIS issued a Change Transmittal Sheet, Amendment 4, for the directive on the Unified Sampling Form (10,210.1). This change transmittal issues new microbiology sampling codes, which are necessary to reflect the sampling programs established in the directive on Microbial Sampling of Ready-To-Eat (RTE) Products for the FSIS Verification Testing Program (10,240.3). Access the change transmittal at:

www.fsis.usda.gov/OPPDE/rdad/FSISDirectives/10210-1Amend4TransSheet.pdf

ELIGIBLE PLANT LISTINGS AND COUNTRY REQUIREMENTS UPDATE

The list of plants eligible to export fresh meat to the European Union has been updated in the Export Library on FSIS' web site. Access the list at:

www.fsis.usda.gov/OFO/export/leufresh.htm

Country requirements for several nations including Australia, Mexico, Canada, and members of the European Union have been recently updated in the Export Library (http://www.fsis.usda.gov/OFO/export/explib.htm). Access more information at:

www.fsis.usda.gov/OFO/export/explib.htm.



 
  
  
   
    
    
         REMINDER…. If you are planning to attend MEATXPO’03 in Las Vegas, NV – March 2-5, 2003,
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