NATIONAL MEAT ASSOCIATION h 1970 Broadway, Suite 825, Oakland, CA 94612
Edited by Kiran Kernellu
May 19, 2003
Agri Beef Co. of Boise, ID has purchased NMA-member Washington Beef, of Toppenish, WA, making Washington Beef producer-owned once more. Agri Beef is a 35-year-old privately held agribusiness with diversified operations that include liquid feed formulation and manufacturing for the cattle industry, ranching and cattle feeding operations in the Northwest and Kansas, and a specialty Wagyu cattle operation that supplies the ground beef for the “$41 Hamburger” featured on national television. The terms of the purchase weren’t disclosed.
The union of the tenth largest cattle feeding operation, Agri Beef, and the 15th largest beef processor, Washington Beef, should prove to be advantageous. Cattle Buyers Weekly reported that Washington Beef’s future looks more secure, especially with a partially integrated beef operation. Cow-calf producers in the region will profit, and Washington Beef will be better able to compete with large plants in its area. Moreover, Washington Beef can now reduce its reliance on Canadian cattle.
Agri Beef and Washington Beef believe that this acquisition will strengthen the cattle industry in the Northwest by unifying producers who are willing to work together to produce and promote brands of high quality beef to meet consumer demands, as stated in a press release. Improving efficiency and supply chain management problems that have been problems in the region in the past will be a major priority. Agri Beef Co. president and CEO, Robert Rebholtz, Jr., said, “By combining Washington Beef’s strengths with Agri Beef’s knowledge of cattle feeding/supply chain management, we hope to create an entity that will ensure continued beef production in the region.”
Washington Beef will remain fully staffed and headquartered in Toppenish, WA.
FSIS reported that the Washington State Beef Commission, Washington Dairy Products Commission and Midway Meats, Inc., have filed a complaint with the Washington News Council (WNC) against Seattle’s KIRO-TV. The complaint involves a series of stories aired by KIRO-TV in November 2002 that depicted alleged inhumane handling violations at Midway. The complainants contend that the stories were “factually inaccurate, incomplete, misleading, sensationalized, biased” and damaging to the reputations of the complainants as well as to that of the U.S. Department of Agriculture. USDA is not a party to the complaint. The WNC will hold a public hearing on the matter on June 14. The WNC is an independent, nonprofit, statewide organization that hears complaints from readers, viewers or listeners that feel personally damaged by news stories written or broadcast about them. The WNC is not a government entity and has no authority to control or penalize the news media, but does have the authority to publicize its findings to the state’s media.
Join us for NMA’s 2003 Summer Conference!
AUGUST 20-23, 2003
GRAND GENEVA RESORT & SPA, LAKE GENEVA, WI
For more information, contact NMA at 510-763-1533 or [email protected]
The six lean beef cuts are eye round roast, top round steak, boneless shoulder pot roast, top sirloin steak, round tip, and shoulder steak. Tenderloin, T-bone steak and 95% lean ground beef also meet federal standards for “lean” or “extra lean,” as do products with “round” or “loin” in the name. “We want to remind people that beef is, and has always been, one of nature’s best tasting multivitamins,” said Young in a press release. “It’s an ‘excellent source’ of five nutrients -- protein, zinc, phosphorus, selenium, vitamin B12 -- and a ‘good source’ of four -- iron, niacin, riboflavin and vitamin B6. These nutrients are important for good health and may play a positive role in some of today’s major health issues, including improved bone health, prevention of anemia, healthy fertility and even maintaining muscle mass during weight loss.” Mark Thomas, NCBA’s vice president of consumer marketing, said in a press release, “We’re not saying ‘don't eat chicken.’ We’re saying that you can feel good about eating lean beef. With so much conflicting nutrition information out there, it’s time to set the record straight. People love beef. And now, they can enjoy lean beef for its great taste and its nutrient benefits.”
For more information visit USDA’s database of the nutrient composition of foods at:
NMA conducted a teleconference on Thursday, May 15 regarding the “Workers’ Comp Insurance Crisis.” NMA Executive Director Rosemary Mucklow; NMA Associate Director, Administration, Etta Reyes; Bill Bridgford, Bridgford Foods Corp. and Chairman of NMA’s Work Place Issues Committee; and Henry Meyer, Meyer Business Management, were all in attendance. John Barbieri and Kevin Vollmer of State Compensation Insurance Fund participated as guest speakers. The agenda included a summary of where we are and how we got here, the California market with respect to national carriers, the reinsurance market, options of self-insurance, the political atmosphere, proposed legislation, and how you can be heard and what you can be doing. It was noted that workers’ compensation costs can be one of the largest employer costs a company in California faces today. Historically, California has had higher rates and lower benefits than most other states. Medical costs and the amount of claims have continued to rise and drive rates up.
In California, this all came about after the state went through a major overhaul of the workers’ compensation system from the reform acts of 1993, when the California Legislature targeted fraud at all levels. Prior to the “Comp Reform” in 1993 California employers were being charged some of the highest rates in the nation and injured workers were receiving some of the lowest benefits. Between 1995 and present the rates being charged have not covered the cost of benefits paid. Insurance companies, eager to capture market share, lost billions of dollars. Eventually these tactics started catching up to those insurance companies practicing price wars. Market place capacity is still limited and many insurers remain leery of the California marketplace because of the pricing issues, reinsurance, and concerns of 9-11 and the economy.
Many states across the nation have gone through the workers’ comp reform/open rating movement and, almost without exception, private insurance companies compete, go broke, leave the state and/or stop writing business, and wait for a better rate environment. California will likely follow that pattern with one exception; because of the size of state, and money involved, insurance companies will continue to test the water.
The most important aspect of controlling cost is controlling losses. Workers’ compensation costs are controlled by “attention” from the employers, brokers and insurance companies. Loss prevention, mandatory training, tailgate meeting, loss investigation, local knowledge of medical providers and legal representatives are all key components in reducing workers compensation costs. If employers control their losses, it will open up pricing opportunities with multiple carriers and keep the cost of workers’ compensation down.
Form a good relationship with your broker and carrier. Make sure you have confident contacts at all levels. Put your people to work. Your broker works for you, you pay them good money, you should have a contract with them detailing what you expect of them. They should have a good relationship with the underwriters, claims personnel and others with your carrier depending on your needs. You should also require the same of your personnel people and you should stay involved.
It is important to make sure your contacts are in place, and with those contacts, determine the amount of money or loss ratio threshold for open disability claims and review those accordingly. It is also beneficial to take care of your own first aid claims. Also, be sure your open claims are reserved correctly, especially prior to unit stats. If you’re concerned with your carrier, consider having a third party perform a claims review.
NMPF BOARD ESTABLISHES SELF-HELP DAIRY PROGRAM
On Friday, May 9, the National Milk Producers Federation (NMPF) Board of Directors voted overwhelmingly to establish a three-pronged effort to trim domestic milk production over the next year to balance supply with demand in the dairy marketplace, and improve the prices that farmers receive for their milk. The process includes a dairy herd reduction or buyout program to improve milk prices. The approved proposal is based on the idea of a self-help program, which is to be administered by the NMPF-led Cooperatives Working Together (CWT). The CWT (and its programs) will be funded through an 18 cent per hundredweight assessment on those participating in the program. The money raised by the assessment will be used to fund three efforts that will prune dairy supplies and help stabilize prices: an export assistance program to enhance commercial sales of cheese and butter in foreign markets; a reduced production marketing program to provide incentives for farmers to decrease their milk output; and a herd retirement program that will pay farmers to sell their entire herds of dairy cows. Together, the programs are designed to cut milk supplies by 4.6 billion pounds during the 12 months that CWT is scheduled to operate. The targeted economic impact of the supply reduction program is an average increase of $1 per hundredweight in the price that farmers receive for their milk.
The Board determined that collection of the producer assessment will begin when an adequate level of the nation’s milk production is enrolled in the program, and set an enrollment target of 80% of national production. The NMPF Board will meet again by June 30th to authorize the final launch of the program.
“This decision by our members is an historic turning point for the dairy industry,” said Jerry Kozak, NMPF President and CEO, in a press release. “Never before have dairy farmers gotten this far in creating a voluntary, industry-led program to help themselves.” For more information, visit http://www.nmpf.org/news/PressReleases/pressReleases.cfm.
NEW NMA RESOURCE
NMA has a new resource, “The Role of Microbiological Testing in Beef Safety Systems,” collaborated on by Russell Cross, Keith Belk, Gary Smith, Gina Bellinger, and Sharon Wood. Some of the topics covered in the resource include: if testing is effective, valid reasons to test, what organisms should be tested, and validation of interventions. NMA members contact Julie Ramsey at [email protected] for a copy.
NMA has available information on the purchases for Fiscal Year 2003. NMA members contact Kiran Kernellu at [email protected] or 510-763-1533 for a copy.
FRESNO STATE CONFERENCE BROUHAHA
The Fresno Bee recently reported on a California State University, Fresno (CSUF) February conference on Revolutionary Environmentalism, which featured some speakers who advocate, and in some cases have practiced, arson and violence. According to the Bee, the conference “drew passionate debate on and off campus, [and] continues generating conflict as a point of interest in a federal grand jury investigation.” The conference assembled environmental advocates from diverse groups nationwide, some of which are known for militant tactics (see the February 10 Lean Trimmings for details). While organizers called the conference an examination of those tactics, critics reprimanded the university, charging the conference moved from analysis to advocacy of those tactics. Officials at CSUF and in the CSU general counsel’s office in Long Beach, CA reportedly confirmed they received and acted on a grand jury subpoena. The university supplied a videotape of a conference session, which was open to the student body and media, but not to the general public. The Bee reported that Federal authorities will not say what or whom they are investigating.
The National Chicken Council Washington Report relayed that the Animal and Plant Health Inspection Service (APHIS) has completed exotic Newcastle disease (END) containment activities in Arizona and Nevada, and on Thursday APHIS announced it officially lifted the quarantine in those two states. An interim notice in today’s Federal Register removes Mohave and Yuma Counties, and portions of La Paz County, AZ, and Nye County and portions of Clark County, NV from the END quarantine list effective Wednesday. The number of positive commercial layer premises in California has dropped to 17. Four commercial premises have been released. Today APHIS published an interim rule and request for comments in the Federal Register that quarantines a portion of Kern County, CA effective Tuesday. Ten premises were slated for depopulation as of Wednesday. Texas had no new flocks found positive for END, and no new contact premises identified.
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
May 19, 2003
ASKING NMA MEMBERS
The Founding Fathers found the burdens laid on them by a monarch who lived 5,000 miles away so onerous that they united their lesser differences and developed a better way to manage the colonies. Thus was born the Constitution and then the Bill of Rights. These are the centerpieces of our government today.
If you own or manage a commercial meat business, you are required to comply with the Federal Meat Inspection Act (FMIA) in order to sell your products in commerce. Many of these businesses belong to industry trade organizations, and seek their assistance to understand the regulatory requirements that they are required to comply with. NMA’s staff provides guidance to its members, both to confirm that what they are being told is an accurate application of the authority, and also provide assistance if it appears that they are being asked to meet requirements that are not valid. NMA has raised concerns about the system with the Food Safety & Inspection Service (FSIS), but it’s not enough just to raise concerns – we need to be able to suggest better alternatives to improve the system. During the course of the next several weeks, we’d like to suggest some of the issues of difference and to receive input from NMA’s members. The goal is to develop a white paper of what the meat industry would like to see happen to work cooperatively with USDA to ensure the safest meat supply for American consumers. To this end, we’ll look at some of the regulatory tools used by FSIS with the intent of identifying what would be a more effective regulatory tool to accomplish the goal.
The FMIA was written in 1906, and substantially updated in 1967. A subsequent amendment in 1986 sunset six years later. The Hazard Analysis and Critical Control Points (HACCP) Pathogen Reduction regulation was published in 1996. Science-based HACCP is strongly supported by the industry. USDA implemented a form of regulatory HACCP that quite often collides with science-based HACCP. Regulatory HACCP usually prevails because the USDA carries a big enforcement stick. However, some challenges to regulatory HACCP in the courts have clearly upset some regulatory enforcement officials. The industry’s critics have seen this activity as an opportunity to fix the statutory authority so that the government wins when challenged, notwithstanding the merits of fairness.
The cornerstone regulatory tool used by FSIS to enforce regulatory HACCP is the Noncompliance Record (NR). We reported in Lean Trimmings on April 7, 2003 that every three months more than 30,000 NRs are written by FSIS officials; about 100 companies (out of a possible 6,500) file an appeal; the number of appeals vary from 200 to 350; USDA grants about 20% to 25%; denies twice that many; and a lot are left pending. This data came from USDA’s own published records in the FSIS Quarterly Report since the implementation of HACCP.
Quite frankly, neither the industry’s record of appealing NRs, nor the FSIS’s response to appeals is good enough. The disposition system does not speak well for either the industry or USDA.
An NR is a naked assertion of noncompliance. It’s a snapshot of a happening recorded by a USDA official. It can be quite insignificant, or it can be serious. An NR describing the failure of a critical limit could be used to support the strongest enforcement action – namely the suspension of inspection. It has been the experience of NMA’s regulatory assistance staff that there are a lot of NRs that do not rise to this level, but it is nevertheless important that companies respond. Either the NR is accurate from both a factual and regulatory perspective, and the company must respond to show how such a situation will not reoccur, or the recording is inaccurate and the company should correct the document record. If the issuing official disagrees, then the company’s recourse is to appeal.
An earlier system, the Process Deficiency Record (PDR), had a graduated finding – Minor, Major or Critical. Usually, Critical PDRs could close a plant temporarily or retain product and could lead to further enforcement action. NMA tends to think that this classification of severity probably worked better than today’s stand-alone NR. We’d like to hear members’ views, and to hear suggestions for alternatives that would work better. Please e-mail us at: [email protected].
The Court of Appeals for the State of Wisconsin on May 13 reversed the summary judgments granted to Excel dismissing the claims of four plaintiffs and Sizzler U.S.A. against the company in the Milwaukee County Circuit Court. The case involved individuals who got sick after eating at a Sizzler Restaurant, and one child who died. The case hinges on federal preemption issues that have been in place for many decades, and which the Court addressed in its lengthy finding.
The case will now be heard in trial in the lower court. However, Excel has indicated that it will appeal the May 13 decision. NMA and other industry organizations (AMI, NCC, NTF, NAMP and SMA) were amici curiae for Excel Corp.
ANALYZING HEALTH, SAFETY, AND ENVIRONMENTAL REGULATIONS
The Harvard School of Public Health and Harvard Center for Risk Analysis presented a program entitled “Analyzing Regulations: Health, Safety, and the Environment,” May 8-9, 2003, in Washington, D.C. Sharon Brooks of Olsson, Frank & Weeda was in attendance and provided the following information (additional information is available to NMA members by fax upon request). The program discussed the principles and practices behind the methods used to evaluate health, safety, and environmental regulations.
Dr. James K. Hammitt, a professor at the Harvard School of Public Health and Director of Environmental Science and Risk Management at the Harvard Center for Risk Analysis, provided a detailed discussion of the following: the types of economic analyses involved in evaluating health, safety, and environmental regulations (e.g., benefit-cost analysis and cost-effectiveness analysis); decision criteria for such analyses; elements within those analyses; problems associated with such analyses (e.g., benefits and costs may be difficult to measure in monetary units); and the need to consider the probabilities, consequences, and trade-offs of a risk.
Dr. George M. Gray, Deputy Director of the Harvard Center for Risk Analysis and Lecturer in Risk Analysis in the Department of Health Policy and Management, provided a detailed discussion of conducting risk assessments. Essentially, risk assessment is a tool for using scientific information about a hazard, its dose-response, and exposure to characterize potential threats to human health or the environment. Although risk assessment relies on science, it is not a scientific exercise—it requires many choices and assumptions and is therefore subject to considerable uncertainty. Dr. Gray discussed why risk assessments are performed (e.g., to clean up waste, identify hazards, compare risks, or examine costs and benefits to a regulation); the components of a risk assessment (e.g., hazard identification, dose-response evaluation, exposure assessment, and risk characterization); the use of scientific data to determine risk; the variability in exposure to risk; and the quantitative portrayals of uncertainty and variability involved in risk.
Dr. Gray also discussed risk trade-off analysis. This type of analysis involves evaluating a particular risk against a countervailing risk (e.g., an additional risk that results from the government intervention that was designed to prevent the initial risk). In addition, trade-off analysis involves the need to consider four issues: (1) whether the same type of risk may affect the same population (risk offset), (2) whether a different type of risk may affect the same population (risk substitution), (3) whether the same type of risk may occur in a different population (risk transfer), and (4) whether a different type of risk may occur in a different population (risk transformation). Dr. Gray stated that if decision-makers conduct risk trade-off analyses, then these decision-makers may find a more reasonable substitute to a risk than if they had not conducted such analyses.
Mr. Jonathan B. Wiener, JD, professor at Duke University Law School and Faculty Director of the Duke Center for Environmental Solutions at Duke’s School of the Environment & Earth Sciences, discussed risk analysis under Federal law. Mr. Wiener stated that there is little statutory guidance on risk assessment. Many statutes are silent on this subject, some have generic provisions calling for the use of the latest scientific knowledge when conducting a risk assessment, and still other statutes require the best available evidence for use in risk assessment. Underpinning all statutory discussion of risk assessment is the Administrative Procedure Act’s requirement of “reasoned rulemaking.” Mr. Wiener also discussed when and why courts might review agency decisions based on both the type of risk analysis conducted and the failure to conduct such analysis. Furthermore, Mr. Wiener stated that laws and regulations that discuss risk provide wide-ranging ways in which to control risk. Once a risk has been assessed, Mr. Wiener then discussed various ways in which risk is managed.
The FSIS web site has a new gateway to all documents that have been translated into Spanish. Currently, food safety material for consumers, educators, health professionals and producers is available, and additional documents will be added. This is one facet of FSIS’ on-going effort to reach non-English speakers. FSIS has food safety materials available in five languages. Reach the new index at: http://www.fsis.usda.gov/spanish/index.htm.
An executive summary of the Beef Industry E. coli Summit was published shortly after the January meeting, and can be viewed at www.beef.org under “Research.” The executive summary was mailed out to NMA general members. NMA members contact Kiran Kernellu at 510-763-1533 or [email protected] to request a copy by mail.
NMA has available two videotapes on animal handling, “Animal Stunning for Stunners,” and “Animal Handling in Meat Plants.” NMA members may purchase these videos at a discounted price. Please contact Julie Ramsey at [email protected] or 510-763-1533 for more information.
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: