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

January 7, 2002

EXPERIENCE THE VERY BEST WITH NMA IN 2002

NMA’s Annual Convention, to be held this year in Monterey, California on February 20-23, has always been designed to provide a winter break for its members in a location where the weather is temperate and the facilities are pleasingly comfortable. But far more than timing and location, NMA’s annual convention is designed to provide the very best in expert discussion of hot topics, business contacts and just plain “take-home” business information that helps its members to run and manage their businesses better. Indeed, NMA invented the Round Table concept for its invited experts to exchange their views on key topics in a lively, interactive manner and include questions from attendees. As an adjunct to these creative discussions, NMA also provides Specialty Meetings where one or two intensely knowledgeable experts can provide more in-depth information on the subject of their expertise.

NMA’s annual convention is also the occasion when NMA’s leaders and its members intermingle, where new leaders emerge, and where the Association welcomes its new members as part of the NMA family.

And finally, NMA’s annual convention is the occasion when we have the opportunity to hear from leaders that are especially important to the future of our industry and to honor those who have provided outstanding service. This year’s keynote speaker at the annual meeting on Saturday, February 23, is Joe Luter III who, as the visionary leader of Smithfield Foods, has turned an eastern pork processor into a powerhouse in the beef and pork industry. And, at the General Session following lunch on Thursday, February 21, we will hear from Dr. Elsa Murano, Under Secretary of Agriculture for Food Safety with oversight of FSIS.

The invited speakers for the Round Table and Specialty sessions are truly outstanding individuals, and NMA’s members are active in both chairing and participating in the sessions. It’s a lot of work developing this program. We are indebted to a committee of younger members – Kelly Heffer, Birko; Joseph Azzaro, Jr., Palama Meat; Jay Goldberger, GFI; John Barbieri, State Fund; Lynn Delmore, Golden State Foods; Mark Kreul, Packerland; Michael Cramer, Foodbrands; Robert Delmore, Clougherty; Russ Wilcox, Daily's; Brian Coelho, Centrl Valley Meat; Tim Biela, American Foods Group; and Todd Waldman, United Food Group – who have conferred with the NMA staff to identify and invite the right people for the occasion. Make your plans to attend and be involved in both the business of NMA through its committees and meeting events in Monterey, and in the events like the Sausagefest, the dinner event at the famed Monterey Bay Aquarium and other supplier-hosted activities.

Truly, come to Monterey and experience the very best offered to you by the National Meat Association.

NMA 56TH CONVENTION

ROUND TABLES

Thursday February 21

Interventions to Reduce Microbial Loads

HACCP Next Steps

Energizing the Work Place in 2002

Price Reporting: New Hopes for Better Info

Friday February 22

Next Steps in Food Microbiology

Designing today's plants with food safety priority

Making Good Business Decisions

Case-Ready: Is the consumer ready?

Saturday February 23

New Age Management of RTE

FSIS The Next Steps

Crisis Management the Biosecurity Component

A Changing Industry: The Niche Markets

SPECIALTY MEETINGS

Thursday February 21

Keeping Meat Cold

BSE Update

Commodity Purchase Update

Pork Value Chain Project

Friday February 22

Planning for the Future of Your Business

Allergy Monitoring & Management

Update on Residues

Update on Exports

Saturday February 23

Update on Slotting Fees

Update on Animal Handling Issues.

TBA

Using Power More Efficiently

Page 2

NAS COMMITTEE TO REVIEW MICROBIAL PERFORMANCE STANDARDS

The National Academy of Sciences (NAS) announced January 3 provisional appointments to a committee which will conduct a 14-month study reviewing the scientific basis for microbiological criteria for food and food ingredients. The committee will operate through an ad-hoc oversight committee and two subcommittees, one addressing meat and poultry and, the other, seafood, produce and related products, and dairy products. The meat and poultry subcommittee's reports will evaluate the role of scientifically determined criteria, including microbiological criteria, in the production and regulation of meat and poultry products. Specifically, it will review the extent to which microbiological performance standards are appropriate means of ensuring product safety in a HACCP-based system. They will also evaluate the scientific basis for existing USDA and Food and Drug Administration microbiological performance standards and will recommend improvements.

Dr. Cameron Hackney, dean, College of Agriculture, and director, West Virginia Experiment Station, West Virginia University Poultry Processing/HACCP, will chair the new committee. Members include Dr. John Marcey, Center for Excellence in Poultry Science, University of Arkansas Meat Processing/HACCP; Dr. Elizabeth Boyle, Department of Animal Sciences, Kansas State University Produce and Related Products Processing/HACCP; Dr. Robert Gravani, Department of Food Science, Cornell University Seafood Processing/HACCP; Dr. Steven Otwell, Aquatic Food Products Laboratory, University of Florida Dairy Products Processing/HACCP; Dr. Kathryn Boor, Department of Food Science, Cornell University Epidemiology of Foodborne Disease/Public Health; Dr. Emilio Esteban, Centers for Disease Control and Prevention Process Control/Statistics; Dr. Darrell Donahue, Department of Chemical and Biological Engineering, University of Maine Risk Assessment/Microbial Growth Modeling; Dr. Donald Schaffner, Department of Food Science, Rutgers University HACCP; Dr. James Dickson, Department of Microbiology, Iowa State University HACCP/Food Safety Economics; Dr. Neal Hooker, Department of Agriculture, Environmental, and Developmental Economics, Ohio State University Food Law/Consumer Perspective; Marsha Cohen, J.D., Hastings College of the Law, University of California Food Safety Objectives/International Perspective; and Dr. Terence Roberts, food safety consultant in Reading, United Kingdom.

FSIS EXPORT REQUIREMENT ALTERATIONS

FSIS has made changes in the meat and/or poultry export requirements for the following eight countries: China, Canada, Mexico, Taiwan, Japan, Costa Rica, Jamaica and Korea. For example, there is now a statement regarding BSE that must be included on all export certificates issued by FSIS for beef destined for Japan. In addition, there is a new requirement that all edible poultry
feet shipped to China must be eligible for the U.S. mark of inspection. View these changes on the FSIS Library of Export Requirements web site at: www.fsis.usda.gov/OFO/export/explib.htm.

Page 3

FOOT-AND-MOUTH DISEASE

It has been more than three months since the last reported case of Foot-and-Mouth Disease (FMD) in the UK, according to a report at the National Institute for Animal Agriculture’s Weekly News Bulletin. The last case of foot-and-mouth was in Cumbria on September 30, eight months after the start of the outbreak. However, before the country will declare itself free of the disease, the Chief Veterinary Officer must first be satisfied by further blood testing in the badly hit areas. “It has been a long battle with the disease, but it looks very much like we have won,” said Ben Gill, president of Britain’s National Farmers’ Union. There are hopes for the relaxation of restrictions as early as February.

Despite the good news, the implications of the FMD outbreak are still being felt throughout Europe. Reports remind us that the United States should not let down its guard on this highly communicable animal disease. “Foot-and-mouth disease could be used as one of these billion-dollar bombs,” said Dr. Tom McGinn, head of a security task force for the North Carolina Agriculture Department. “We’ve got to be prepared for the use of one of these diseases as a weapon.”

Incidentally, news reports noted that ‘Foot-and-Mouth’ made the top ten list of words for 2001 at a website which specializes in such things, Dictionary.com.

JAPAN DECLARED FMD FREE

The USDA Animal and Plant Health Inspection Service (APHIS) announced in today's Federal Register that it was amending the regulations governing the importation of certain animals, meat, and other animal products by adding Japan to the list of regions that are considered free of rinderpest and Foot-and-Mouth Disease (FMD). APHIS determined that Japan is now free of FMD. However, to protect the United States from an introduction of these diseases, Japan was simultaneously added to the list of regions that are subject to certain restrictions because of their proximity to or trading relationships with rinderpest- or FMD-affected countries.

BSE BAN COMPLIANCE SHOWS IMPROVEMENT

As of October 26, the FDA’s Center for Veterinary Medicine reports that it had completed inspections at all renderers in the U.S., 264 firms about two thirds of which handle materials prohibited for use in ruminant feeds. Of the number (174) that handled such materials, 95% did so without error to their labels, 97% did so with systems that fully prevented commingling and 99% followed strict record keeping regulations. Only 13 firms were found to be out of compliance. And the numbers were very similar for FDA-licensed feed mills, where 90% were in compliance, and even feed mills not licensed by FDA, where 84% were found in compliance. A number of other firms, such as ruminant feeders, on-farm mixers, protein blenders and distributors, were inspected and found to be in compliance 87%. Firms that were found out of compliance were listed for reinspection and on second inspection 94% passed. These reports, reported in the American Association of Food Hygiene Veterinarians’ News-o-gram, show great, rapid improvement, with nearly all firms now in compliance.

Page 4

Remembering Bill Cloward

Bill Cloward, who worked for Western States Meat Association (WSMA) in the early 1980s and assisted members with regulatory and workplace issues, died on December 25. After leaving WSMA, Bill worked for The Employers Group in San Francisco, a firm dedicated to assisting employers with industrial relations counsel. He often returned to NMA's conventions as a speaker and participant. Bill was 56. We extend our deepest sympathies to his daughter Andrea and other family members in their loss.

FTC SETTLEMENT DEFINES “MADE IN USA”

In a decision that may have wider implications, the Federal Trade Commission (FTC) settled “Made in USA” mislabeling claims against five manufacturers of over-the-counter pain relievers. Food Law UPDATE, a publication of the law firm Zackler & Associates, reported the FTC alleged a substantial percentage of the total manufacturing costs and analgesis quality of the five companies’ products were comprised of imported bulk ingredients. “If a company chooses to make an American-made claim, it should comply with the [FTC’s] standard,” said Howard Bates, Director of the FTC’s Bureau of Consumer Protection. The settlement in the case provides a “safe harbor” that allows “Made in USA” claims so long as all, or virtually all, of the ingredients are made in the U.S. and all, or virtually all, labor employed to manufacture the product is performed in the U.S., as well. In the event that the product has been “significantly processed” on U.S. soil, then the FTC settlement allows that a label reading, “Processed in the United States with Foreign Ingredients,” may be applied.

TAMA BEEF PACKING PLANT NEGOTIATIONS CONTINUE

Iowa Beef Quality Supply Network, which consists of 971 cattle producers, continues to negotiate with Tama Beef Packing Inc.’s bankruptcy trustee to reopen the facility. Tama Beef closed in August and was subsequently driven from Chapter 11 to Chapter 7 bankruptcy. Iowa Beef Quality Supply Network had purchased a $9 million option to buy the company a week before the closure. The Network planned to run the plant through a partnership with Excel. Currently, negotiations for the plant hinge on whether the Network will be able to obtain the equipment inside the building. Tama Beef owes about $5.5 million to secured creditors.

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

January 7, 2002

VELASAM LITIGATION

Federal District Court Judge Claudia Wilken in the Northern District of California granted in part and denied in part the motion for summary Judgment in the Veal Connection Corp, et al v. Roy Thompson, et al on December 12, 2001. Oral hearings were held in August 2001. The case involved the actions of ten employees of the USDA, nine of whom worked for FSIS and one who worked for the Office of Inspector General. The plaintiff’s claims of arbitrary and unwarranted inspection activities and unjustified suspension of inspection revolved around several incidents during 1995 and 1996, and the sixty pages in the Judge’s decision provides a minute-by-minute recitation of the events which could only be appreciated by other meat plant owners and managers who are faced with obfuscation and denial by government officials when dealing with decisions about perishable product, lost retain tags, who did and said what and when, and what you can and cannot do under the rules. The Plaintiffs are seeking compensatory and punitive damages, as well as attorneys’ fees and costs from the Defendants who are being represented by government counsel.

Summary Judgment, as Judge Wilken notes, is properly granted when no genuine and disputed issues of material fact remain and when, viewing the evidence most favorably to the non-moving party, the movant is clearly entitled to prevail as a matter of law. The bottom line in Judge Wilken’s decision is that Velasam did not meet this burden in its case against four of the defendants and the suit against them was dismissed. For the other officials, Velasam did demonstrate disputed issues of fact and thus the suit against these remaining officials will now proceed to trial.

NMA WEIGHS IN ON PIZZA STANDARDS OF IDENTITY

In response to the USDA’s request for comments on a Proposed Rule published November 2 in the Federal Register, National Meat Association wrote that Agency’s 30-year old standard no longer represents consumer expectations of a “pizza.” In recent years, the concept of a pizza has expanded as restaurants have experimented with toppings and sauces, but the standard of identity – “a bread based meat food product with tomato sauce, cheese and meat topping” – limits USDA-inspected pizza manufacturers from meeting consumer expectations and demands. However, any elimination of a standard of identity requires proper handling in terms of labeling guidelines.

NMA said that if USDA terminates its standards for pizza, then it becomes necessary to otherwise inform consumers of the product’s contents. Eliminating the standards of identity for pizza should not eliminate consumers’ awareness of pizza ingredients. Descriptive labeling should satisfy this concern, in its letter NMA made some suggestions as to what kind of descriptive labeling might be most effective. For a copy of the NMA letter on pizza identity standards reorganization, e-mail NMA Director of Communications Jeremy Russell at [email protected].

Page 2

FSIS E-MAIL

FSIS is implementing a new general e-mail address format for its employees in the form of [email protected]. E-mail addressed to [email protected] will continue to work for those who already have an address in that format.

CSO CAUSING CONFUSION

Food Chemical News Daily January 2 reported concern by unnamed meat industry officials about the role of Consumer Safety Officers (CSOs). Apparently, some feel that CSOs seem more like compliance officers than inspectors, because they are forcing plants to change HACCP plans that have been acceptable to the government for the past several years. The actual role and power of the CSOs are unclear, although USDA started the new job series in part to bring more scientific and technical government experience into the plants. CSOs have more training and education in these areas and ostensibly would be better able to tell whether a plant’s HACCP plan is actually designed and implemented to improve food safety. Only 30 CSOs are presently in the FSIS workforce and they work out of the district offices, but FSIS plans to place an additional 120 CSOs next year.

ERRORS OF THE NEW YORK TIMES

USDA Under Secretary for Food Safety Elsa Murano wrote in response to an editorial that appeared in the New York Times under the title “A Threat to Meat Inspection” that the recent appellate court ruling in Supeme Beef Processors v. USDA “doesn’t prevent the Agriculture Department from closing plants that fail to control pathogens in meat and poultry.” This simple statement is crucial to understanding the errors of the Times and other media outlets’ attempts to characterize the conclusions of Supeme Beef Processors v. USDA as contrary to the interests of food safety. If news reports were to be believed, the recent ruling’s impact “was to gut the government’s power to rely on new scientific methods of policing meat safety that make it easier to detect and significantly limit the invisible hazard of bacterial contamination,” in the words of the editors of the Times. Never was a statement more wholly false. Not only does the ruling expressly not prevent USDA from “using Salmonella standards to verify a plant’s ability to address food safety hazards,” as Murano wrote in her response, but it eliminates a falsely predicated and ineffective regulation that was illegally implemented and used for little other purpose than to close operations for problems they neither created nor could control.

Despite the claims of some, the results of the recent appellate court decision in Supreme Beef Processors v. USDA should actually lead to greater protections for consumers.  This is because, in implementing its Salmonella Performance Standard, USDA concentrated compliance at establishments that, by the Department’s own admission, “cannot use technologies for reducing pathogens that are designed for use on the surface of whole carcasses at the time of slaughter” (Pathogen Reduction; Hazard Analysis and Critical Control Point (HACCP) Systems; Final Rule, Federal Register, July 26, 1996 P.39946). Thus, USDA’s Salmonella standards attempted to measure performance in reducing Salmonella where there are no known mechanisms to reduce it. This was unfair to the processor and a disservice to consumers. Food safety will be better served by enforcing Salmonella performance standards at a point where there are mechanisms to control it so that real reduction can be measured.

National Meat Association Director of Communications Jeremy Russell wrote twice to inform the Times of its errors. NMA looks forward to assisting in the pursuit of attainable standards and safer meat products.