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

April 2, 2001

FMD TRACED TO ILLEGAL IMPORTS

British officials now believe the source of the huge Foot-and-Mouth Disease (FMD) outbreak was infected meat, smuggled into England, the waste from which wound up in pig feed. An official report on the source of the outbreak also stated that the disease went undetected in sheep for up to three weeks before the first case was spotted when sick pigs went to slaughter. Officials are convinced that they are on the trail of a meat smuggling operation that could have been going on for months and are urgently verifying how waste food from Chinese restaurants was used as pigswill. The link with the Far East fits in with strains of the virus identified in the infected livestock.

This information is of critical importance to the United States livestock industry, because earlier this month USDA Inspector General Roger Viadero testified to the House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration and Related Agencies that his main concern was “repeat offenders” responsible for smuggling agricultural products and running illegal meat processing operations. “Civil fines and administrative sanctions have simply become an additional “cost of doing business” for those repeat offenders who seek to skirt the dedicated efforts of the Department’s regulatory agencies,” Viadero said. He also said that the OIG’s “efforts to respond to these incidents are severely hampered” by a lack of personnel, equipment and funds.

U.S. OUTBREAKS OF FMD IN THE PAST

In the past, Foot-and-Mouth Disease (FMD) outbreaks in the United States have mirrored those now happening abroad. For instance, FMD invaded California in 1924 when waste materials from a Navy vessel docked at Mare Island were used as pig feed. The pigs were sick for weeks before being taken to slaughter in Berkeley and spreading the infection. Overall it was 63 days before the first diagnoses and 90 days before an emergency declaration, a time period which allowed the disease to spread over a wide area. When the outbreak had reached its height, 948 cattle, sheep, goat and swine herds were affected, value appraised at $4,350,000; 109, 855 livestock animals had to be destroyed, as did 22,214 infected deer; FMD had spread as far as Los Angeles and the total costs of the outbreak ran to $6 million dollars (that’s 1924 dollars).

The same things happened again with waste materials from a ship in L.A. in 1929, but the pig owner recognized the illness – because of the outbreak five years previous – and the disease was contained to only 5 farms. In this case, it was only 3 days before the proper diagnosis was made and only 10 days until the emergency was declared. No sheep or wild deer were infected and only 23 goats had to be destroyed. The total number of cattle and swine that were ultimately killed because of the disease was only 3,548. The total value of animals destroyed was $108,000, which was $4,242,000 less than in 1924, illustrating the importance of quick detection.

Quick detection is critical, but the most important factor in FMD defense is keeping the disease out of the animal population completely. This means checking travelers, protecting farms and stopping the smuggling of potentially infected meat and agriculture products.

FMD OUTBREAKS IN CA (1924 vs. 1929) chart provided by the California Dept. of Food and Ag.
	1924	1929
Herds affected	948	5
Cattle	58,807	277
Sheep	23,328	0
Swine	21,194	3,271
Goats	1,472	23
Total Animals	109,855	3,591
Appraised Value	$4,350,000	$108,000
Wild Deer	22,214	0
Days Before Diagnosis	63	3
Days Before Emergency Declaration	90	10

Page 2

NMA SCHOLARSHIP FOUNDATION ANNOUNCES APPLICATIONS

The NMA Scholarship Foundation has announced its 2001-2002 academic scholarship program and made the application available at its website, NMAscholars.org. The NMA Scholarship Foundation is seeking the best and the brightest undergraduates majoring in Meat Science, Animal Science, Poultry Science, and related Agricultural Engineering with an orientation towards post harvest processing of meat and poultry food products to receive the financial help they need and deserve. The application deadline is May 1, 2001 Last year, the Foundation awarded seven scholarships totaling $14,000. This year, it plans to increase the number of scholarships awarded.

Scholarship Awards include:
One (1): Frank DeBenedetti Memorial Scholarship ($3000)
One (1): Edie Schmidt NMA Memorial Scholarship ($2500)
One (1): Al Piccetti NMA Memorial Scholarship ($2500)
One (1) or more: NMA Undergraduate Scholarships ($2500 each)

In addition, each awardee who attends the National Meat Association 56th Annual Convention, which is to be held February 2002, in Monterey, California, will receive a $500 travel award and a plaque.

U.K. FMD OUTBREAK UNABATED, VACCINATION CONSIDERED

Concluding that the United Kingdom may be facing an “unprecedented outbreak which has not yet reached its peak,” Agriculture Minister Nick Brown and others in the British government have begun to consider the vaccination of livestock as a new tactic. The problem with using a vaccine, however, is that it would severely delay any return to disease-free status after the Foot-and-Mouth Disease (FMD) outbreak ended. Since the inoculated animals are almost impossible to distinguish from infected ones, other nations would keep up bans of British animals. “If the government decides that some form of vaccination is necessary it will, in effect, be admitting that its other policies have failed,” said Conservative lawmaker Tim Yeo.

However, many think that such an admission might be in order. “This thing has gone beyond the stage where a mass cull would bring about control of the disease,” said Peter Midmore, a professor of rural studies as the University of Wales. Brown said that, although it has not committed to using the vaccine yet, Britain has asked the European Union for a “contingent decision permitting the use of vaccination during the present outbreak, so that it can be deployed immediately if we conclude that is the right approach.” Meanwhile, mass animal graves continue to be dug for and filled with hundreds of thousands of culled livestock.

NMA Executive Director Rosemary Mucklow attended a meeting called by Secretary of Agriculture Ann Veneman March 30 at the Animal and Plant Health Inspection Service (APHIS) offices in Riverdale, MD for a briefing and update for industry organizations on the U. S. efforts and strategy to prevent the entry of FMD into the United States. The meeting was chaired by Dr. Richard Breitmeyer, State Veterinarian of California, who is on a 30-day loan to USDA to head up the Department’s response team. Secretary Veneman, participating by telephone reconfirmed to everyone that prevention is a partnership. She reiterated the measures already taken by USDA to suspend imports of livestock and meat products. USDA is continually reassessing the situation, and working with other federal agencies. (A summary by Rosemary Mucklow is available at NMAonline.org or by sending a self-addressed, stamped (34¢) envelope to Jeremy Russell at NMA-West.)

Page 3

USDA SEEKS TO CLARIFY BSE

Noting that many consumers were confusing the two animal diseases plaguing Europe, Bovine Spongiform Encephalopathy (BSE) and Foot-and-Mouth Disease (FMD), USDA officials are “trying to make sure that people understand that there is a difference,” Secretary of Agriculture Ann Veneman said last week. Veneman, speaking at a breakfast gathering of grocers, said Europe's FMD epidemic has raised public awareness about her department's efforts to control the entry of agricultural pests and disease. “Seeing all these pictures about what is happening in Europe has given a view of why it is so important that we have these programs,” Veneman was quoted as saying by the Associated Press.

A representative of the National Institute of Health, Dr. Paul Brown, recently stepped forward saying that he wanted to “put to rest” the idea that the government has not adequately investigated BSE. He pointed out that the idea of random testing, touted by some, would be a waste of resources based on faulty reasoning. Randomly testing apparently healthy animals with no history of the disease is not likely to find anything that the current program, which has tested over 12,000 “suspect” animals, could miss. Instead, he said, it made more sense to shore up “vulnerabilities,” such as through the feed ban. Food Chemical News Daily reported that he also said that arguments comparing the U.S. checks to what happened in Europe, where much of the disease has been found, are “irrational and stupid” and “patently untrue.”

One example of the severe precautions that U.S. regulators have taken is getting rid of 260 Vermont sheep, four of which previously tested positive for a Transmissible Spongiform Encephalopathy (TSE). Not only have these sheep been destroyed despite protests by the owners, but scientists at the National Veterinary Services Laboratory are analyzing blood and tissue samples for further information. The lab said it would have results within three months.

Lawmakers pondered the BSE issues at a session of the House Appropriations Subcommittee on Agriculture and Related Agencies earlier this month. For a complete summary of the meeting, send a self-addressed, stamped (34¢) envelope to Jeremy Russell at NMA-West and be sure to include the newsletter date with your request.

Page 4

MAMMOTH MERGER MELTS

In a letter that went public after the Wall Street closing bell last Thursday, Tyson told IBP that the deal was off because “misleading information” had been used “in determining to enter the merger agreement. Consequently, whether intended or not, we [at Tyson] believe Tyson Foods Inc. was inappropriately induced to enter the merger agreement. Further, we believe IBP cannot perform under the merger agreement.” Tyson was of course referring to the U.S. Securities and Exchange Commission probe into IBP-subsidiary DFG's accounting practices, which forced IBP earlier this month to take a $60.4 million charge on its fourth-quarter earnings. Analysts were skeptical, however, citing Tyson’s lower-than-expected earnings and the specter of Foot-and-Mouth Disease as two possible explanations for the sudden change of heart.

Taking skepticism one step further, IBP filed a lawsuit seeking to force the poultry giant to follow through with the $3.2 billion dollar arrangement. “Tyson's actions are completely unjustified by anything that has transpired and we will do what is necessary to protect our shareholders and our company,” said Robert Peterson, IBP's chairman and chief executive officer, in a prepared statement. IBP’s stock meanwhile dropped to $15.10 from $22.79 after Tyson’s announcement.

BIO FOODS RULE

The Food and Drug Administration (FDA) has extended the comment period for its proposed rule mandating premarket notice for bioengineered foods. The proposed rule would require submission of a premarket notice to FDA at least 120 days prior to commercial distribution in the United States of a bioengineered food. Today's notice extends the comment period for 30 days to May 3, 2001.

MCDONALD’S MAY SEEK TO SIMPLIFY

Less is more? Apparently so. In a scheme that sounds reverse psychology marketing, McDonald's Corp. was advised by a taskforce that it would could increase sales by simplifying the menu to focus diners’ attention on core items, limiting the variety of sizes for drinks and french fries and reducing promotional material in restaurants. Word of the internal plan was reported in the Chicago Tribune last week and McDonald’s itself has not officially commented on the recommendations, which included higher pay and increased benefits for workers. However, the core of the plan, which seeks to relieve pressure from sales’ declines in Europe, was to reduce menu items. The obvious thought would be cost reductions, but in fact drafters of the plan say that McDonald's customers were being bombarded with an increasing number of messages and promotional clutter inside restaurants and that a test in an outlet with far fewer messages led to higher sales and per-customer spending.

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

April 2, 2001

MANDATORY PRICE REPORTING SWIMS TODAY!

Some very hard-working officials at the USDA’s Market News Service are trying to pull a successful launch of Mandatory Price Reporting (MPR) out of the jaws of impossible circumstances. They have made extraordinary efforts to assist smaller firms to submit the needed data on this first day of MPR.

Although the new reports include some replacements of USDA's existing reports as well as reports in new formats, perhaps the best sentiment is that the voluntary system is still working, at least for the moment! For the various reports that are simply not available because of confidentiality, or because there were code number problems, or the computer system went down, or because they didn’t transmit to the big computer in the Potomac correctly, there is relief that the market can continue to be served with the tried and trusted voluntary system.

This being the first day of the new system, there are some reports that are not yet due, such as the prior day's reports, or the weekly reports. Time will tell if they can be produced. The live hog reports didn’t work, so the voluntary is backing them up. The data for the boxed beef market didn’t arrive correctly, so again the market will be able to look to the voluntary system.

It’s important to remember that the life of the voluntary system is finite! Within a few weeks, back-up by the voluntary system will be in the history books and when the electronic system fails, or at worst crashes, there will be no reports.

There is optimism among the responsible officials that the system didn’t crash, even if it worked only imperfectly, that the confidentiality restrictions worked, and to a large extent the untried computer system was able to transfer the data for accumulation.

The bottom line: it was a mixed bag of results, and time will tell the livestock producers whether they’ll achieve everything they wanted to know about livestock and meat markets. (More information can be found at the Ag Marketing Service’s website (linked from NMAonline.org) at http://www.ams.usda.gov/lsg/price/htm and http://www.ams.usda.gov/lsg/mpr/MPRreport.htm.)

NMA GOES TO WASHINGTON

NMA will begin tomorrow its Annual Leaders Visit to Washington, DC. Attendees will meet with various Representatives and Senators, as well as officials from the Department of Agriculture and the Small Business Administration. A full summery of the trip will be provided in next week’s Herd on the Hill

NEW STUDY FINDS WAY TO DELAY ONSET OF BSE

A team of researchers in the U.K. used cobra venom factor to block for 24 days the onset of Scrapie in mice. They believe their study, which works on the proteins in the immune system through which Transmissible Spongiform Encephalopathies (TSEs), such as BSE, spread to the brain, may lead to effective treatements. “While we are not advocating that people or animals should be treated with cobra venom factor, our findings suggest that complement inhibitors may present an opportunity for early therapeutic intervention in these diseases,” said the team’s lead researcher.

Page 2

AMS TECH DATA SUPPLEMENTS

The Agricultural Marketing Service of USDA issued a Notice to the Trade and Request for Comments last week on draft Technical Data Supplements (TDSs) for Ground Beef Items and Ground Pork Items for school year purchases 2001-2002. It is anticipated that similar TDSs will be issued for ground poultry.

The information is available at the USDA/AMS web site. The proposals contain the essential provisions outlined in last week’s Herd on the Hill. Early responses indicate that the proposed specs are similar in most respects to those currently used by the commercial sector, utilizing statistical process controls throughout the production process rather than end-product testing. Further, the draft TDSs include requirements on product throughout the system, including slaughter controls, boning operations and grinding operations.

USDA/AMS holds an annual vendor conference at which product specs and other requirements are fully discussed. This year’s AMS Vendor Conference is scheduled for May 1 in Kansas City, MO. AMS is asking for written comments on the TDSs by April 30.

BUSH MOVES TO REMOVE PRO-UNION RULES

The Bush administration continued to cut away reminders of the Clinton legacy last week by suspending for nine months recently developed union-friendly federal regulations. The suspended rules would have required federal agencies to assess whether companies seeking government contracts have violated federal labor, environmental or other laws. Public comment is now being sought on the rules, which are opposed by business groups, and it is likely that after the nine-month suspension period they will be removed.

CONGRESS MAY CONSIDER ANTIMICROBIAL RESISTANCE

Representative Sherrod Brown (D-OH) plans to introduce legislation this month that would ban antibiotics used subtherapeutically in food animals, Food Chemical News Daily reported today. Brown also plans to introduce a bill that would authorize appropriations for an interagency public health action plan finalized earlier this year to combat antimicrobial resistance. Published in draft form last summer by the Centers for Disease Control and Prevention, the plan focuses on ways to curb antibiotic use in humans and animals.

BSE BRIEFING

The AMI Foundation held a briefing on Bovine Spongiform Encephalopathy (BSE) in Washington on March 23. Dagmar Heim of the Swiss Federal Veterinary Office offered an overview of BSE in Europe. Will Hueston, professor and associate dean of the University of Maryland summarized the U.S. situation and defenses. Other speakers included Dr. Paul Brown of the National Institute of Health, who stated BSE and new variant Creutzfeldt-Jakob Disease (vCJD) are undeniably the same disease, APHIS Senior Staff Veterinarian Lisa Ferguson and FDA Associate Director George Mitchell. There were also several industry speakers covering topics concerning rendering, beef safety and media response. An Olson, Frank & Weeda summary of the meeting is available at NMAonline.org or by sending a self-addressed, stamped (34¢) envelope to Jeremy Russell at NMA-West.

PIGS TEST NEGATIVE IN NORTH CAROLINA

A Foot-and-Mouth disease scare in North Carolina sent hog futures and the cattle market tumbling over the weekend. However, samples from a handful of pigs with blister-like lesions in the area of their mouths tested negative for the highly contagious disease now ravaging Europe (see Lean Trimmings page 2). Prices rebounded after the negative findings. Other investigations included negative tests from Illinois and Idaho. Officials expect the number of tests to increase as long FMD continues to spread in Europe.