NATIONAL MEAT ASSOCIATION h 1970 Broadway, Suite 825, Oakland, CA 94612

(510) 763-1533 Fax (510) 763-6186 h Email Address: [email protected] h

Edited by Jeremy Russell

October 29, 2001




Smithfield Chairman, President and CEO Joseph Luter III has accepted an invitation to join NMA as the keynote speaker at its 56th Annual Convention to be held February 20-23, 2002 in Monterey, California. Smithfield, the No. 1 pork processor, has been quickly expanding into the beef business. Although its overtures towards IBP were ultimately thwarted by Tyson, the company last week completed a $250 million purchase of the No. 5 U.S. beef packer, Packerland Industries. Nor is expansion expected to stop there. “I don’t know for sure,” said Luter on October 19, “but we will probably announce a couple of acquisitions in the next two or three weeks.”


Luter is the designer of Smithfield’s strategy of vertical integration. Vertical integration has enabled Smithfield, which was founded by Luter’s grandfather in 1936, to deliver safe, affordable, consistent and traceable products that satisfy consumer’s increasingly demanding requirements. These are just some of the factors which led National Provisioner to select Smithfield as its Processor of the Year in June. “For years,” wrote NP editor Barbara Young, “Luter III was on the front line leading the charge that would take Smithfield to the top of the heap in terms of earnings, production prowess, and product mix. Although the poultry industry revolutionized on vertical integration, critics did not see the same potential for the pork industry. But Luter III did. His insight paid off, and today he feels no need to apologize for his leadership strategies.”


Smithfield’s significant growth under Luter’s leadership began with the 1981 acquisition of Gwaltney, a competitor in fresh pork processing. This was the beginning of his strategy of opportunistically acquiring poorly performing packing companies and turning them around into profitable operations. Since then, Smithfield has acquired John Morrell & Co., Lykes Meat Group and five other regional pork processors in the United States. Luter pioneered the pork processing industry’s entry into vertical integration through hog production by entering into a venture to form Brown’s of Carolina in the early nineties. In 1999 and 2000, Smithfield added Carroll’s Foods and Murphy Farms to its group of hog production companies, making it the world’s largest producer and processor of hogs, more than three times the size of the nearest competitor.


Furthermore, Luter has been instrumental in translating Smithfield’s growth into enhanced shareholder value. Over his 25 years at the company, it has delivered a 28% average annual compounded rate of return. For the last 25 years Smithfield outperformed the S&P 500 Index and the S&P Foods Index by more than 350 percent. Don’t miss his exciting keynote address in Monterey next February.


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A new report by the Center for Science in the Public Interest (CSPI) found that the top three vehicles of foodborne illness were seafood, then eggs, then fruit and vegetables. Based on CSPI’s analysis of approximately 1,600 food poisoning outbreaks affecting more than 70,000 individuals between 1990 and 2001, seafood caused 340 outbreaks. By comparison, beef caused 134 outbreaks (about a third). Eggs topped the list of numbers of illnesses, causing 10,827 cases, compared to 6,089 for beef. “Seafood and other foods regulated by the Food and Drug Administration (FDA) caused four times more outbreaks than meat and poultry products, which are regulated by the U.S. Department of Agriculture,” said Caroline Smith DeWaal, CSPI’s director of food safety. “Despite that, the FDA has only one-tenth as many food-safety inspectors, and about one-third of the inspection budget of the USDA.”


The Semmelweis Technique


With the U.S. Postal Service reminding us that hand-washing is an effective prevention against diseases such as Anthrax, we thought it prudent to run this reminder by Steve Sayer of Sterling Pacific Meat Company:


In 1840, a woman giving birth in a Vienna hospital had a 30% chance of contracting a virulent and often fatal illness known as Puerperal Fever where as a woman who gave birth at home was not generally affected with the illness. Research conducted by Philipp Semmelweis (1818-1865), a Hungarian Obstetrician, revealed that the illness was spread through hospital wards by medical students who neglected to wash their hands or sanitize medical instruments between physical examinations of patients. Semmelweis, spurred by this conclusion, required the interns and all other care workers to wash their hands and medical tools before and after each examination with a chlorinated lime mixture. Thus was born the world’s first recorded hand and instrument “disinfected dip,” the Semmelweis Technique, based on an antiseptic prophylaxis. In less than two years this new personal hygiene medical procedure lowered the maternal mortality rate from 12.00% to 1.25%.


This new and essential procedure of proper hand and instrument cleaning was an early and important harbinger of many other good personal hygiene practices that would eventually lead to sanitary practices in both the medical and food industries. There remains though the important and inherent responsibility of every USDA inspected establishment to incessantly train and educate both new and existing employees on the importance of following good personal hygiene practices and other applicable GMP’s during training sessions involving HACCP and SSOP systems.


Washing one’s hands or rubber production gloves with anti-bacterial E-2 rated soap and warm water, followed by a sanitizing hand dip, curtails tremendously the possibilities of spreading harmful pathogens and spoilage microorganisms to foods, product contact areas and production equipment. Potentially high bacterial levels living under fingernails can run as high as 2 to 3 million colonies per nail. For this reason alone any bare handling of both raw and ready to eat products should be an item of the distant past. Studies from the Centers for Disease Control (CDC) have clearly shown that people are the highest risk when it comes to cross-contamination in the both food and beverage industries.


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NMA Executive Director Rosemary Mucklow returned from a trip to London, England yesterday. During her trip, she was not only able to visit the famous city, but also spent time in Cockermouth in Cumbria, the Lake Distrift. You may recall that this is where the British outbreak of Foot-and-Mouth (FMD) started. She was in the country while officials discovered that the recent evidence of Bovine Spongiform Encephalopathy’s (BSE) ability to infect sheep had come from samples likely contaminated with bovine brain, invalidating the research (see last week’s Lean Trimmings). Already, officials are doubting their results, as they now believe that perhaps it was the samples of the samples that became contaminated. Whether they can ever get back to any actual evidence of anything at this point is questionable.


Mucklow also noted an article on BSE in the Times that could serve as a model for good reporting. The paper ran a question and answer piece that set the Meat and Livestock Commission’s responses side-by-side with the Food Standards Agency. Not surprisingly, the responses were very similar.




In a moment of the jitters, Russia banned meat products and livestock shipped from Florida on October 12. The country cited fears about anthrax. The temporary ban lasted until October 22. Florida State Agriculture Commissioner Charles Bronson was able to appeal to reason in a pointed letter that no doubt helped bring the ban down. “[Florida hasn’t] had an anthrax agricultural contamination in literally 50 years,” he wrote. “Anthrax is a naturally occurring substance in agriculture, but Florida’s climate and soil and ecology are not conducive to it.” The Russian ministry said in a statement that the country’s top veterinary inspector had lifted the ban, saying that U.S. authorities has proved there were no recent cases of anthrax in livestock or poultry in Florida, reported the Moscow Times.


What would have been the effect of the ban had it stayed in place? The vast bulk of the agricultural products shipped from Florida would be beef from the Midwest and poultry from the Carolinas. An estimated 40% of the 694,000 tons of poultry that the U.S. exported to Russia last year was shipped from Florida.


Russia has reason to be jittery. Two years ago 18 people, mostly slaughterhouse employees, contracted anthrax. And in 1979, a mysterious anthrax outbreak in the Russian industrial center of Sverdlovsk, now known as Yekaterinburg, killed at least 68 people. The Associated Press reported that this latter incident was possibly caused by a leak at a biological weapons experimentation facility.


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FSIS has proposed to increase the fees for inspection and certification activities, as well as laboratory services. Under the recently published Proposed Rule, the base time fee for meat and poultry inspection activities would increase to $42.64 from $38.44 per hour per program employee and the overtime and holiday fee would increase to $44.40 from $41.00. The fee charged for laboratory services would increase from $60.04 to $68.32 per hour per program employee. Comments are due by November 15.




The U.S. International Trade Commission (ITC) announced in a fact-finding report, prepared for the House of Representatives, that trade barriers for U.S. meat, dairy and other foods were stagnating their value. “The effect of tariffs varies by sector and type of product exported, but can reduce the price competitiveness of U.S. exports in foreign markets or keep products out of a foreign market altogether,” the ITC report said.



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

October 29, 2001




The U.S. Senate voted 91-5 last Thursday to pass a $73.9 billion ag appropriations spending bill. The overall level is $78 million below President Bush’s request, but is nevertheless up $807 million from the previous year (not counting a $3.6 billion emergency farm package). The bill, which includes $20.5 million more than last year for food safety, will now go into a conference committee to resolve differences with the House’s $74.3 billion version passed in July.


Senator Tom Harkin (D-IA) withdrew his amendment to give USDA statutory authority to enforce microbiological standards, the same amendment that failed by only 1 vote last year, during debate. When Harkin introduced the amendment, Senator Ben Nelson (D-NE) immediately offered a “second degree” amendment to it. The Nelson amendment to the amendment required “adulteration” to be the definition for enforcing microbiological standards and instituted a study on pathogen standards and monitoring. Harkin balked at the terms and tried to have Nelson’s suggestion tabled. When his effort failed on a 50-to-45 vote, Harkin withdrew his own amendment. “It's a win for the science as far as we're concerned,” Tim Willard, a spokesman for the National Food Processors Association, said of the Senate vote.


Some critics expressed fears that the vote signified a lack of backing for tough new anti-bioterrorism activities. “We're acutely aware in our industry that we’re in a different environment since September 11,” said Gene Grabowski, spokesman for the Grocery Manufacturers of America, “but we also believe we have to act responsibly and not take actions at this point in time that we will regret years from now in an attempt to solve problems that don't really exist.”


The fight over statutory authority, despite what detractors may say, has nothing to do with anti-bioterrorism activities. Instead it stems from a lawsuit brought by Supreme Beef Processors against the USDA. USDA illegally used microbiological standards, specifically the Salmonella performance standard, to force Supreme out of business. Those who would seek to retroactively grant USDA the authority it did not and should not have, want the Agency not to be held accountable for its wrongful actions. Keep in mind that in applying Salmonella performance standards in ground beef processing plants, USDA concentrated its compliance at points where, by the department’s own admission, “establishments producing raw ground product from raw meat or poultry supplied by other establishments 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 performance standards have been attempting to measure performance in reducing Salmonella where there are no known mechanisms to reduce it. This is unfair to the processor and a disservice to consumers.




Congresswoman Lucille Roybal-Allard, who visited with several of the many NMA members in her district recently, has been appointed to serve as the Vice Chair of the Emergency Preparedness and Response Subcommittee. This subcommittee is part of the newly formed Democratic Homeland Security Task Force, whose purpose is to develop policies to ensure that the country remains secure and prosperous in the wake of recent terrorist attacks.


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FSIS has issued a New ISP Procedure Code for Humane Slaughter to inform its field personnel of a new humane slaughter Inspection System Procedure (ISP) code-04C02. This code is to be used by inspection personnel in cattle, sheep, swine, and equine establishments, where an “FSIS [District Office] may suspend inspection without providing an establishment prior notification because the establishment is handling or slaughtering animals inhumanely.” Access online at




A group of thirty-five FSIS employees completed the first uniquely designed training program session to become Consumer Safety Officers (CSOs) last week. The CSOs are expected to begin their new assignments, two per District, with three in Albany, NY, today. The CSOs will assist with activities associated with the Small Business Regulatory Enforcement and Fairness Act (SBREFA) in various capacities in the plants, including verification and validation of HACCP plans, SSOP's and microbiological testing programs, and assessing the adequacy of corrective action implemented by a plant following noncompliance or enforcement action. CSO's may also serve as team members on In-Depth Verification (IDV) reviews, epidemiological investigations or other reviews associated with a plant's food safety control systems. FSIS hopes to have an additional 75 CSO's  by next year.




In addition to the appointment of Margaret Glavin as FSIS Acting Administrator, Ron Hicks, Deputy Administrator, FSIS Office of Management, was on October 22 made the Acting Associate  Administrator for FSIS. 


Thomas Hunt Shipman was named deputy under secretary for Farm and Foreign Agricultural Services on October 12, 2001. As deputy, Shipman will offer general direction of programs administered by the Farm Service Agency and the Commodity Credit Corporation, the Risk Management Agency, the Federal Crop Insurance Corporation and the Foreign Agricultural Service. These agencies are comprised of more than 18,000 employees and administer more than $34 billion in USDA programs.




Due to the ongoing Anthrax attack, mail services are becoming increasingly impacted. FSIS Labeling and Consumer Protection Staff (LCPS) asked that all mail (including U.S. Postal Service, express service mail, and mail delivered by couriers and messengers) be processed by the central mailroom at USDA. Mail directed to the LCPS must now be sent to the following address: USDA, FSIS, Labeling and Consumer Protection Staff, 1400 Independence Ave., SW, Room 614 Annex, Washington, DC  20250-3700. And all unopened mail that is hand-delivered to LCPS staff by company representatives will have to be opened prior to entering the Cotton Annex Building. Processors concerned about delays in label evaluation because of these changes should consider the benefits of generic label approval and the use of pressure sensitive stickers to correct labels that have deficiencies. 


Also the National Turkey Federation in Washington, DC was forced to advise members and friends that the U.S. Postal Service had suspended mail delivery to its 1225 New York Ave. office due to the temporary closure of the Brentwood Mail Facility for Anthrax decontamination.