GOVERNMENT AGENCIES AND BLUNDERS: WE CAN LEARN FROM FLORIDA

As this is written, the presidency remains undecided. Florida is at the heart of this amazing event, where Palm Beach County's Supervisor of Elections Theresa LePore, a Democrat, made the print legible with a "butterfly" format, which has been widely used in ballots without question for many years. Voters, let alone leading pols, now denounce the validity of the form in a race that is so tight that only a few votes might actually decide the outcome for the entire nation and disputes have arisen in both state and federal courts about the validity of recounts. The Florida dilemma is similar to what our industry experiences daily; the entrenched power of government agencies.

Government agencies are goal-oriented organizations, whose offices are stacked one atop the other in a hierarchical order. Policy, set by leaders, flows down the system through directives; implementing information is carried out by the working levels and conveyed to the affected parties. Play is dictated by impersonal rules and each office is highly specialized. In an organization like the United States Department of Agriculture (USDA), a decision that is made at the top is actually implemented at the bottom … in your plant. Each meat company is a potential Palm Beach County and the federal employees who officiate in the plant all have the power of a Theresa LePore. As well intentioned as they may be, they sometimes make arbitrary decisions which can create turmoil and ruin. This is regulatory uncertainty – the amazing power of the small decision when it is backed by a governmental behemoth.

The impact of regulatory uncertainty is no less powerful than the impact of electoral uncertainty. Laws and implementing regulations are necessary to manage an orderly government system, but "fairness" is questioned when things go wrong. Over 200 years ago, the Constitution’s framers attempted to balance the power of the executive agencies, the legislature and the judiciary. However, in large governmental organizations checks and balances often work very slowly, if at all, to redress damaging decisions.

The lessons we learn from Florida may be useful as our industry works to resolve its differences with the USDA. The impasse of HIMP implementation, and the flawed scientific standards behind an improperly applied Salmonella Performance Standard are ripe for resolution by the parties, before more judicial or legislative decisions issue.

USDA FILES IN TEXAS LITIGATION

As reported last week, USDA filed a motion to lift the stay of inspection at Supreme Beef and even filed to have the decision rendered moot. “If this case is moot,” wrote USDA in its filing, “the proper remedy is for this Court to vacate the district court’s order and remand the case to the district court with directions to dismiss as moot.” Supreme has said that despite it’s bankruptcy, it will fight this attempt to toss out its staggering and unprecedented gains.

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SEEKING REGULATORY ASSISTANT

NMA is currently seeking to fill a Regulatory Assistant position opening at its Oakland, California headquarters. The position is full-time, but flexible in hours, and requires an undergraduate degree in Animal or Meat Science or a related Agricultural Science; an AA is also acceptable in combination with meat industry or animal production experience. Computer and communication skills are required. The Regulatory Assistant will work under the Director of Regulatory Issues, sharing responsibility for managing and assisting members with USDA/FSIS activities. This position fits a self-motivated team player capable of making sound decisions. Candidates should fax or e-mail there resume to Ken Mastracchio, Director of Regulatory Issues, at (510) 763-6186 or [email protected].

MEAT ONLINE

A new Canadian web company, Viewtrack Technologies (http://www.viewtrack.com/), dedicated to tracking individual animals from farm of origin through the production cycle to the retail level, says beef producers could streamline production and boost earnings by as much as $80 to $120 per head. Viewtrack uses the identification number supplied by the Canadian Cattle Identification Agency (CCIA), to allow participants in the beef industry to record every event in the animal’s life.

Foodtrader.com (http://www.foodtrader.com/), an online business-to-business marketplace and eProcurement solution for the food and agriculture industry, announced last month that it had raised more than $15 million in second round financing through a private placement arranged by Allen & Company. "This latest capital infusion will primarily be used to enhance our preeminent technology and develop programs that will enable our customers to enter a fully automated online procurement community," said Frank Tomasino, chairman and founder of Foodtrader.com. The company’s custom procurement platform allows buyers to load their traditional supplier databases into a personalized purchasing application. Buyers then have the option of requesting quotes from their traditional suppliers or expanding the request for quote process to the general Foodtrader.com marketplace.

The Southern California Software Council selected Marina Kotsianas, president and CEO of Agribuys, as its 2000 Entrepreneur of the Year. MEATing Place Daily News reports that Agribuys (http://www.agributs.com/) provides an end-to-end, relationship-driven, global e-procurement solution for the food industry. Kotsianas was given the award because she is “passionate about her business, she has built a company with a global presence, fabulous underlying technology, a great management team and an exciting business plan,” said Southern California Software Council CEO Mark Monaghan.

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HARRIS RANCH RESTAURANT WINS AWARD

Harris Ranch Restaurant, Coalinga, CA received the “Top California Beef Backers Award 2000.” The Award, promoted by the California Beef Council, recognizes California restaurants that go the extra mile to promote beef. This year’s 28 nominees, chosen by beef producers for their outstanding beef promotion programs and excellent beef entrees, hail from every region of California and every sector of the restaurant industry. California Beef Council Executive Director Bruce Berven said, "The foodservice arena is the fastest growing segment of the beef industry. This award gives beef producers a chance to recognize and honor restaurants that do the most to help our industry." The second place went to Far Western Tavern, Guadalupe, CA. Madonna Inn, San Luis Obispo, CA, AJ Spur's, Templeton, CA and Beermann's, Lincoln, CA each received honorable mentions. In addition, each nominee will receive a plaque honoring their contribution to the California beef industry.

SMITHFIELD OFFERS TO BUY IBP

Smithfield Foods, Inc announced today that it has offered to acquire all of the outstanding shares of IBP, Inc. through a tax-free merger in which IBP shareholders would receive $25 per share payable in Smithfield Foods common stock at an exchange ratio based on the average price of Smithfield Foods shares for a period prior to the closing. Smithfield Foods' offer represents a 12.4% premium over Donaldson Lufkin & Jenrette 's offer price.

A takeover by Smithfield, if successful, would expand the nation’s leading pork producer into the beef market in a huge way. Buying IBP would allow Smithfield to deliver pork and beef to its customers on the same trucks, reported the Wall Street Journal. Smithfield already owns 6.6% of IBP and is likely to face antitrust scrutiny should it buy IBP. To overcome any antitrust hurdles, Smithfield is apparently willing to divest itself of certain assets of the combined company, such as one or two Midwestern pork-processing facilities, to reduce market share.

MEAT SUBSTITUTES CONTINUE TO GROW IN POPULARITY

Big food companies have started acquiring natural food firms that specialize in vegetarian products. For example, Kraft and Kellogg have bought respectively Boca Burgers and Worthington Foods, both of which specialize in meat alternatives. Sales of meat alternatives, many of which are made from soy-based products such as tempeh and tofu, have also had a boost from growing evidence that soy itself has certain health benefits. Last year, the U.S. Food and Drug Administration approved a health statement for soy food labels that says 25 grams of soy protein consumed daily as part of a low-fat diet may help reduce the risk of heart disease.

Technology has made it possible to develop more realistic meat substitutes. “In fact, some vegetarians who have lost their taste for meat think they taste too much like meat,” commented Lorna Sass, author of The New Soy Cookbook and other cookbooks.

Atlanta-based marketing firm HealthFocus said a nationwide study of 2,000 grocery shoppers this summer showed that 22% buy meat substitutes. According to the firm this figure has steadily grown from 7% in 1992. Even the U.S. Bureau of Prisons changed its policy in October to offer vegetarian entrée choices to inmates, Reuters reports.

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NMA LAUNCHES NEW WEB DESIGN

NMAonline will be completely revamped this week. The new site should be launched entirely tomorrow morning … you should not expect any but the most minute delay in service. Although the homepage will remain www.nmaonline.org, many of the sub-pages will be moved to new locations. The new site will have all the features of the old site, but should be manifestly easier to explore and use. Check it out later this week!

SCREWWORM RULE

The Animal and Plant Health Inspection Service today published an interim rule in Federal Register amending the animal import regulations to require horses, ruminants, and swine that are imported from regions of the world where screwworm is considered to exist to be inspected and treated, under certain conditions.

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

November 13, 2000

ELECTION UPDATE

Control of the House will remain with the Republicans, though the exact margin can not be determined at this point, reports NMA Legal Counsel Olsson, Frank & Weeda. Control of the Senate will also remain with the Republicans, though how is not quite clear. There appears to be very few changes to the various House and Senate committees with oversight of our industry. However, the House Commerce Committee lost two members to defeat and three others to retirement, which means five Republican openings and one Democratic opening for this sought-after Committee. There will also be at least four openings on the House Agriculture Committee.

Meanwhile, the Clinton administration is now beginning the completion of their work and many rules are expected to be issued before the new president takes over. “Like Cinderella hurrying away from the ball, lest her coach turn into a pumpkin and she be found in rags, regulators are racing against time,” writes the Washington Post. Although no administration admits it is rushing to see certain rules finalized before the end of its tenure, it’s a phenomenon that has characterized the end of almost every presidency.

Among the rules the Clinton administration has marked “priority” is the controversial ergonomics regulation (see back page), which NMA has vigorously opposed. The Environmental Protection Agency has 88 rules that it may decide to issue by early next year.

Congress meanwhile must finish work on five annual spending bills and a major tax relief package. The Senate agenda also includes bankruptcy reform legislation. GOP leaders had hoped the post-election lame duck session would make it easier for them to negotiate final budget and policy deals. But the political make-up of Congress is now more closely divided.

COLD PASTEURIZED OR JUST PLAIN IRRADIATED?

Thanks to the hysteria of some groups opposed to irradiation, the Food and Drug Administration has been asked by Congress to consider allowing alternate terms for irradiation – “cold pasteurized” – is a favorite, despite the fact that irradiation has proved safe. A leading advocate of the alternative labeling is Democratic Senator Tom Harkin of Iowa, whose state has an electron-beam facility. While it may be confusing to some that irradiated products are not radioactive and have never necessarily been exposed to radioactive materials, changing the labeling at this late date is really a double edged sword. “It’s hard to continue to be supportive of irradiation when there is this continuing effort to hide it from the public,” said Carol Tucker Foreman, director of the Consumer Federation of America’s Food Policy Institute. “It undermines the public confidence in a new technology.” Or it could undermine public confidence once in the hands of the media and the opportunistic detractors. Nevertheless, as Christine Bruhn, director of the Center for Consumer Research at UC Davis has said, “the use of the term irradiation can be misleading.” But that’s the name the process has been given, if it’s going to be changed it’s got to be through as straightforward a process as possible.

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OMB REVIEWING ERGONOMICS RULE

The Office of Management and Budget is reviewing the Occupational Safety and Health Administration's (OSHA) ergonomics rule with a possible publication of the rule in the next two weeks. Congress and President Clinton continue to debate legislation which would delay the rule for at least a year. The language was contained in the Labor, Health and Human Services, and Education appropriations bill, which was delayed because of the ergonomics language. The issue will be revisited when Congress reconvenes this week for a lame duck session.

FSIS TO PROVIDE HACCP STATISTICS

NMA Executive Director Rosemary Mucklow wrote to FSIS Administer Tom Billy to remind him of the request she made during the recent National Meat and Poultry Advisory Committee meeting for a copy of the HACCP implementation information. This information apparently shows that very few inspected establishments have been closed due to HACCP. “What I would like to receive specifically,” wrote Mucklow, “is a tabulation of official establishments that have suspended or ceased operations under the jurisdiction of the FMIA/PPIA in FY99 and FY00 and a tabulation of official establishments where the controlling company has changed which would indicate a change of ownership.” USDA Under Secretary for Food Safety Catherine Woteki commented at the NACMP meeting that this information was known to her and that it would be made available.

UNION SPORTS SOME HIMP SUPPORTERS

Food Chemical News reports that not all meat inspectors agree with their union leaders that the HACCP-based Inspection Models Project is going to lead to a decline in consumer protection. FCN reporters have apparently monitored chat room activity on some union websites and in doing so discovered a number of inspectors working in the HIMP plants have written on message boards that they believe the pilot project is an improvement over traditional inspection. In one posting, the first shift inspectors from the Gold Kist plant that has been cited again and again in news reports condemning HIMP, said they are "tired of the accusations that we are letting bad product out of this plant."

Union official Alvin Sewell said it did not surprise him that a controversial issue like the HIMP project would cause division among the union membership. But, he said, the union's lawsuit challenging FSIS's authority to implement the HIMP project rests on inspection requirements dictated by law. "If requiring a configuration [of inspection] that complies with the law locks in a job, then so be it," he said.

STILL NO BSE IN UNITED STATES

Europe is in a panic over beef again and this time France is the country at fault. In a reversal it is now England which is calling for a ban on French beef. However, according to a new study by the Centers for Disease Control and Prevention (CDC) no evidence to date of the presence of new variant Creutzfeldt-Jakob disease (vCJD) – the human version of Bovine Spongiform Encephalopathy (BSE) disease – in the United States. The CDC analyzed data concerning all cases of CJD that were diagnosed between 1979 and 1998 in the United States. During that time there were 4,751 deaths due to the disease, according to the report published in the November 8th issue of The Journal of the American Medical Association. None of these CJD cases were tested as vCJD, meaning they are a different, human variant of the disease. The USDA’s BSE testing program has still not detected a single case among U.S. cattle.