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

June 3, 2002

FARMLAND FILES FOR CHAPTER 11

In a press conference held Friday May 31, Farmland Industries announced it had filed for Chapter 11 bankruptcy protection. Likening events to a run on the bank, Farmland President Bob Terry said that the primary cause for the declaration was early redemption by subordinate creditors. He also said that a slow Spring fertilizer season contributed to the decision. Farmland plans to maintain its current business operations, but will be conducting a “rigorous examination of cost structure,” said Terry. He added that it was too early to speculate about specifics. The filing will include Farmland itself as well as several of its subsidies, but not Farmland National Beef.

One thing not ruled out in the press conference was a future arrangement to sell Farmland’s meat processing operations to Smithfield Foods. The world’s largest pork operation made an overture last week that landed in the press. “Our proposal provides Farmland with an alternative that we believe will enable it to avert a bankruptcy, preserve its members’ equity and any attendant uncertainty regarding their businesses, protect the interest of Farmland’s creditors (including holders of subordinate debt) and solve Farmland’s liquidity crisis,” wrote Smithfield Foods Executive Vice President Richard J.M. Poulson. He added, “We cannot overemphasize that time is of the essence if Farmland hopes to preserve maximum value for the benefit of your members and creditors.”

According to Cattle Buyers Weekly, Farmland was due to repay $10 million to its creditors on the day it declared bankruptcy. Farmland’s meat business may be worth $350 million. But as the company is under pressure it seems unlikely that it could get full value. However, Smithfield has been trying to diversify its product line away from the core pork business for the past few years, making bids on beef companies as big as IBP, and is definitely interested in both Farmland’s beef and its pork business.

Farmland’s beef business, U.S. Premium Beef, has the right of first refusal for Farmland’s beef operations. Farmland National Beef has about $12 billion in annual sales and according to what Farmland President Terry said in the teleconference, is having an even stronger sales year this than last. And last year it had a good year. A letter from Farmland National Beef is inset. For more on the bankruptcy filing see this week’s Monthly Meat Lookout.

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JAROL MANHIEM TO SPEAK AT NMA SUMMER CONFERENCE

Jarol B. Manheim, Professor of Media and Public Affairs and of Political Science at George Washington University, has agreed to speak at the Industry Session at NMA’s Summer Board Meeting and Conference, August 14-17, 2002 in Sedona, Arizona. Most recently Manheim is the author of Death of a Thousand Cuts, a book about the coordination of anti-corporate campaigns by non-governmental organizations. His research and teaching interests center on strategic political communication.

E. coli O157:H7 OUTBREAK IN NEW YORK STATE

Health officials are searching for the source of an outbreak of E. coli O157:H7 illnesses in Monsey, New York. The New York Times reported June 1 that, so far, 12 children, ranging in age from 1 to 17, and two adults have been sickened by the bacterium over the last two weeks. “[The source] was not something that was served on a large scale at some public event, because that will lead to a large number of people becoming ill in a narrow period of time, and we’re not seeing that, fortunately,” said Rockland County Health Commissioner Dr. Joan Facelle. One possible explanation health officials have sketched out is that one or more victims picked up the bacterium from an isolated serving of contaminated food, she added. The 14 cases involve seven families. None of the cases appear to be life threatening, according to Dr. Facelle.

USDA RULES OUT ‘NORTH AMERICA’ LABEL

Agriculture Secretary Ann Veneman ruled out last week a grown-in-North America label that had been suggested by Canada to solve the country-of-origin labeling conundrum currently brewing. Veneman came under criticism from Congress for even considering the label. “Let there be no doubt that USDA intends to implement the country-of-origin measure as directed by the Congress,” she told the Associated Press. (See last week’s Herd on the Hill page 2 for more information).

SEMINAR ALERT

NMA members interested in attending the June 18, 2002, “Developing Corporate Compliance Policies for Meat and Poultry Plants,” Los Angeles, CA., should enroll ASAP to reserve a seat. Don't miss out on this rare opportunity to hear Dennis Johnson, Esquire of Olsson, Frank and Weeda, deliver the information you need to protect your plant during a regulatory dispute or compliance issue. Call NMA-West at 510-763-1533 for more information.

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MEAT REDATING RESPONSE

According to a report in Supermarket News, supermarket chains are responding to the Dateline episode that revealed meat, poultry and fish redating by launching their own internal investigations. The chains, most of which have strict guidelines against redating, are also working to communicate their policies to store-level employees. Some chains not even involved in the show were prompted to act. According to the article, “The program did little to demonstrate that [redating] practices were dangerous to consumers, although it did test some samples of re-dated fish and ham that it said had extraordinarily high levels of bacteria.” Perhaps this explains why there has been little public outcry. Supermarket News reports that “even the chains that were investigated by Dateline said they received few calls from consumers concerning the program.”

DAIRY QUEEN TESTS IRRADIATED MEAT

Twelve Minnesota Dairy Queens will begin a probationary testing of irradiated hamburger meat. “If everything goes well, hopefully by the end of June, possibly early July we could have the irradiated product in stores in the Minneapolis Twin Cities area,” a Dairy Queen spokesperson told WMNN-Radio. Dairy Queen is the first fast food chain to consider irradiation since the process was approved for meat in December of 1999.

THE INDESTRUCTABLE SANDWICH

Using an array of chemicals to inhibit bacterial growth, scientists at the Army Soldier Systems Center in Massachusetts say they have created an indestructible sandwich. Vacuum-sealed, this sandwich can stay edible for up to three years. (Available in pepperoni or barbecue chicken!)

DRIED PLUM PUREE STUDIES INDICATE SUCCESS

Based on objectives supplied by the California Prune Board, studies are being performed on dried plum ingredients in fresh and precooked meat products. The results from the first study, which evaluated the antioxidant effectiveness of two levels (3 and 6%) of dried plum puree and a dried plum puree blend in fresh and pre-cooked pork sausage patties and compared them to patties containing BHA/BHT (0.02% of the fat content) and a control with no antioxidant, became available recently. A trained-panel performed sensory evaluations of cooked pork sausage patties and found that plum puree enhanced sweet taste, decreased salt and bitter tastes, and masked cooked pork/brothy, cooked pork fat, spicy/peppery and sage flavors. Warmed-over flavor notes were not affected by storage treatments but cardboard flavor increased after 90 days in precooked-frozen pork sausage. A consumer panel indicated that patties with 3% plum puree were as desirable as the patties containing BHA/BHT, but the patties with 6% of either plum product were less desirable.

A second study to evaluate incremental levels (2.5 and 5.0%) of fresh, spray dried or drum dried plum juice concentrates incorporated into a cured ham (15% brine pump) and top round beef roast (10% brine pump) is currently in progress.

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PIG FARMER CONVICTED

British pig farmer Bobby Waugh was convicted of 9 out of 15 counts in relation to the 2001 outbreak of Foot-and-Mouth Disease (FMD) that devastated Britain. Waugh could face up to 6 months in prison. He was convicted on five counts of failing to notify authorities of the FMD outbreak, one count of feeding unprocessed waste to pigs, one count of failing to properly dispose of animal waste, and two counts of causing unnecessary animal suffering. Waugh’s farm appears to be the initial source of the FMD outbreak. Although Waugh claims he had no idea his animals were ill, a video introduced during testimony clearly shows the pigs had FMD symptoms.

ANIMAL HEALTH EMERGENCY GUIDELINES

Dr. Richard Breitmeyer and Dr. Ken Thomazin of the California Department of Food and Agriculture’s (CDFA) have developed some National Animal Health Emergency Management System Guidelines. For a copy of the guidelines, send a self-addressed, stamped (34¢) envelope to Jeremy Russell at NMA-West and be sure to include the newsletter date with your request.

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

June 3, 2002

A FARM-TO-TABLE STRATEGY: CONNECTING THE DOTS

In response to the emergence of Salmonella enteritiditis in the late 1980s, the U.S. egg industry developed a model that has been significantly effective in reducing salmonellosis attributable to this pathogen. As our government ponders how best to use microbiological testing for meat and poultry, especially ground meat, this model is worthy of emulation. In fact, many of the components are already in place!

Only a few of the thousands of laying hens pass S. enteritiditus into their eggs, making those specific eggs a hazard if they are not cooked to destroy the pathogen. If those eggs with the invisible pathogen are combined with other eggs in further processing, the problem spreads. As this food safety problem became known, various agencies, including USDA, FDA and related state agencies, met with industry organizations to develop a strategy. They concluded that the most effective means of pathogen reduction would be a series of interventions from incubator to omelet. They moved to improve sanitation in laying houses, wash all eggs before they enter commerce, refrigerate all eggs throughout distribution, develop technology to pasteurize eggs, and launch an extensive consumer education program to strongly encourage proper cooking of eggs. A decade later, the Centers for Disease Control and Prevention have reported impressive progress in reduced incidence of illness attributable to S. enteritiditis from eggs.

The meat and poultry industry is poised for a similar performance. Livestock producers through the NCBA and other organizations have developed Quality Assurance Programs (QAPs) to improve sanitary handling activities on ranches and in feedlots. Slaughterers have instituted technological interventions to reduce pathogens. Effectiveness is confirmed by testing for generic E. coli on chilled carcasses. Packaging and refrigeration in fabrication and further processing limit pathogen growth. Some firms are now offering cold pasteurization (irradiation) as an additional intervention in finished ground meats. And industry and government have cooperated on consumer information efforts about proper cooking temperatures.

The beef industry in particular has invested hugely in efforts to reduce pathogens on beef, especially during the past decade. Gigantic advances have been made – everything from the zero tolerance for visible defects demanded by FSIS in early 1993 to technological interventions that the industry had to work hard to get regulators to accept, not to mention efforts to pasteurize end products and to educate consumers about proper handling and cooking.

However, unlike the egg industry’s cooperative efforts with the government, the meat industry’s efforts to “connect the dots” to reduce pathogens have not been as well-received. Activists who claim to represent consumers and some legislators think that mandating regulatory limits for pathogens in end products is preferable.

NMA believes that there is a value to science-based performance standards for meat and poultry products so long as they measure performance. NMA has asked USDA to meet with it to discuss how best to use microbiological testing for pathogens. We believe it’s time to connect the dots of all the efforts to make raw meat and poultry as safe as we can for consumers, and to focus specifically on how best to accomplish this for ground beef. There weren’t a lot of broken eggs in developing an egg safety farm to table strategy. Surely the meat industry, in cooperation with regulatory authorities, can achieve what is in everyone’s best interests: A science-based farm-to-table strategy for the safest ground meats possible.

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NACMPI TO MEET THIS WEEK

The National Advisory Committee on Meat and Poultry Inspection will hold a public meeting June 5 and 6. The three NACMPI subcommittees will also meet the evening of June 5 to work on issues that will be discussed during the full committee sessions. The committee will discuss New Technologies in Meat and Poultry Operations, the Farm Bill, and the FSIS Field Workforce. A meeting agenda is available at http://www.fsis.usda.gov/OPPDE/NACMPI/June2002/Agenda.htm. For additional meeting information, contact Sonya West at (202) 720-2561.

FSIS CONSTITUENT UPDATE MOVED TO E-MAIL

After May 31, the FSIS Constituent Update and Agency press and recall releases will be sent via e-mail only. To subscribe, go to the FSIS “Constituent Update” page on at http://www.fsis.usda.gov/oa/update/update.htm. Click on the “Subscribe to the Constituent Update Listserv” link, then fill out and submit the form.

LAW FIRM LAUNCHES E. coli O157:H7 WEBSITE

Seattle-based firm Marler Clark has begun posting on the Internet the genetic fingerprints of E. coli O157:H7 strains associated with recalls of ground beef. The information was obtained from the government through Freedom of Information Act requests. The firm hopes that individuals who were sickened by E. coli O157:H7 infections will use the fingerprints to compare to those from their own samples and thereby target specific companies as the possible source of the contamination. “People have a right to know who the hell poisoned their kids,” said firm partner William Marler in a statement. Marler Clark has won multi-million dollar awards and settlements on behalf of their clients from food companies in the past.

So far the genetic fingerprints from more than a dozen meat companies forced to recall ground beef due to E. coli O157:H7 contamination have been posted. The data, which includes info on IBP and Excel, is online at http://www.fsis-pfge.org/.

NMA SUBMITS COMMENTS TO OMB

NMA responded last week to the Office of Management and Budget’s request for comments on the Draft Report on the Costs and Benefits of Federal Regulations. NMA asked that OMB consider the role of negotiated rulemaking legislation. Citing the HACCP Final Rule as an example, NMA pointed out how, even after six public meetings, “portions of the final regulations were not based on either the Agency’s proposal or the discussions at the public meetings.” NMA also stated that “cost benefit analyses should evaluate whether proposed regulations will result in greater industry concentration and should quantify the economic and social costs that are likely.” Finally, NMA pointed out that it is important to measure the absolute value of benefits. “For example, in efforts to control pathogens, regulatory analysis needs to focus on where those pathogens originate and where they are most controllable, whether that be on the farm, in the processing plant, or during food handling in a restaurant or at home.” A copy of NMA’s comments is available at NMAonline.org.

JOE BLAIR RECEIVES AVMA PUBLIC SERVICE AWARD

Dr. Joe Blair, an NMA Associate Consulting Member, retired FSIS senior staff and principal in the HACCP Consulting Group, will be this year’s recipient of the prestigious American Veterinary Medical Association (AVMA) Public Service Award. Congrats Joe!