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 9, 2001

SCHOOL LUNCH IMPROVEMENTS SHORT CIRCUITED BY POLITICS

Consumer groups and Democrats politicized efforts by USDA’s Agricultural Marketing Service to improve its ground beef safety specifications for the School Lunch Purchase program and essentially halted the proposed advances last week. National Meat Association supported the USDA’s decision to complete a fuller review of the proposed changes, but nevertheless expressed disappointment in a statement on Friday that the proposed improvements had been withdrawn. They were a step towards a more rational system to help guarantee safer supplies of ground beef.

In the interim, USDA has returned to its testing program that was announced with neither warning nor public comment last summer. The tests have meant higher prices and less supplies for schools. NMA looks forward to working with USDA and all other interested parties to develop contract specifications that will maximize food safety without either excluding important products such as ground poultry or pork or substantially raising the cost of other products such as ground beef.

NMA LEADERS VISIT WASHINGTON, DC

A group of directors and leaders from NMA and the Southwest Meat Association (SMA) visited Washington, DC last week for the annual visit. As the Hill was rife with meat issues from Foot-and-Mouth Disease to Mandatory Price Reporting, the timing could not have been better. On Wednesday for instance, Congress held a hearing on Bovine Spongiform Encephalopathy (BSE) to discuss current protections and possible improvements, and to remind concerned citizens across the states that BSE has not been found in the U.S. herd. While NMA and SMA were not able to take part in these hearings directly, they were on hand to answer many of the questions that were raised by significant Washington representatives and staffers related to this and other topics. For a full report in the NMA trip, see Herd on the Hill.

MANDATORY PRICE REPORTING CHAOS

The opening moments of Mandatory Price Reporting (MPR) were marked with a certain amount of market chaos last week, as some prices were delayed, some prices were debated and some prices didn’t arrive at all. USDA’s Market News division was pleased that, except for a few burps, their computer system seemed able to handle the numbers coming in from those required (under threat of civil penalties) to report purchases and sales, but said it was still too early to tell how the system will fair over time. Fortunately for companies who rely on price reporting as a bench mark for pricing, the voluntary system is still intact, although only for a another few weeks. The most disconcerting part of the week’s reporting was the disappearance of several price reports due to confidentiality concerns. There is a chance that livestock producers may push to remove such blocks. NMA supports the so-called 3/60 rule to protect confidentiality and fairness. It is fearful that violating confidentiality would essentially allow for a kind of government sponsored organized collusion between significantly sized reporting entities, who would be able to determine each others confidential information. (Mandatory price reports can be found on AMS’s website at http://www.ams.usda.gov/lsg/mncs/LS_MPR.htm (linked from NMAonline.org).

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FMD IN UK ON DECLINE

Although the number of confirmed cases of Foot-and-Mouth Disease (FMD) in the United Kingdom crested 1,000 last week, officials said that mass cull was starting to curb the epidemic. “We are not seeing the exponential growth in the number of cases that had been predicted,” Professor David King was quoted as saying by a spokesman. The number of confirmed cases dropped as low as four on April 7, but was back up as high as the thirties over the weekend – still not much compared to previous spikes of over sixty in a day. More than a million animals have either been culled or earmarked for slaughter, but only two weeks ago King was warning that as many as half of Britain’s 62 million head of livestock would have to be killed.

Meanwhile, some European Union (EU) ministers urged fellow members to reconsider a 10-year ban on vaccinating farm animals against FMD, despite the potentially disastrous economic effects of such a move. “I think we’re all very much aware that there’s interest in [vaccination], but there are also a lot of disadvantages,” said British Deputy Agriculture Minister Joyce Quin. “Most of us are reluctant to go down that path.” Because animals which have been vaccinated are difficult to distinguish from infected animals, a mass vaccination program could play havoc with international trade.

President Bush proposed $393 million for pest and disease exclusion work at the Animal and Plant Health Inspection Service (APHIS) in his Budget announced this morning. The fight against exotic pests was one of the few areas in the USDA earmarked for larger funding by the White House. Overall USDA spending would drop by $6.3 billion, to $63.25 billion.

BUSH’S MEAT INSPECTION BUDGET

President Bush today sent Congress the details of his $1.96 trillion budget. Here are highlights of the fiscal 2002 funding for the FSIS as proposed by Bush administration on Monday, compared with spending in fiscal 2000 and 2001.

(Millions of dollars) FY2000 FY2001 FY2002 Budget

Total FSIS 649 695 716

Federal Food Inspection 555 596 609

Import/Export Inspection 10 11 12

Laboratory Services 29 31 37

PETA THREAT FRIGHTENS CANADA

The animal-rights groups People for the Ethical Treatment of Animals (PETA) once again revealed its startling hypocrisy, this time by proclaiming its hopes that animals in United States would be sickened by Foot-and-Mouth Disease (FMD). Canada's Royal Canadian Mounted Police (RCMP) and the Canadian Security Intelligence Service took the veiled threat seriously last week and began assessing the possibility that bioterrorists could use FMD to further their animal rights agenda. PETA denied allegations, but who can trust an animal-rights group willing to sacrifice even the welfare of animals to attack its perceived enemies?

FOSTER FARMS TO ACQUIRE ZACKY’S CHICKEN OPERATIONS

NMA Members Foster and Zacky Farms have entered into an agreement in which Foster will acquire the chicken operations of Zacky Farms. The Zacky operations to be acquired include Zacky Farms’ Fresno area plant, hatchery, feed mill and 35 live production ranches, as well as its Los Angeles distribution center. Zacky will retain its turkey operations and its deli and further processing meat operations. The transaction, subject to regulatory approval, is expected to become final this summer. Terms were not disclosed.

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MEDIA COLLABORATORS SLAM EXCEL BEEF

Today the Washington Post and Dateline NBC have collaborated on a story that is part of a two-series event beginning in today’s Post and tonight’s Dateline. Fueled with misinformation, the source of which is apparently lawyers representing families of people who became ill and one who died after eating at Sizzler Restaurants in Milwaukee, WI last summer, the article concludes that, far from an isolated incident, the outbreak was “all but guaranteed” by “a series of systemic failures by government and industry.” The cause of illness, in fact, appears to have been cross contamination of fruits and vegetables with fresh meat in the restaurants’ kitchens.

The story calls into question the ability of USDA’s inspection program to prevent microbiological contamination of meat. The supplier of whole, muscle meat, packed in vacuum-sealed bags, is under scrutiny in the story. The claims by reporters, echoing disgruntled employees and representatives of the politically adept inspectors’ union along with so-called consumer advocates, once again portray meat slaughtering and processing in the most derogatory terms. At issue are inspection standards, the authority of inspectors to take action, USDA’s recall authority (the perceived need for mandatory versus current voluntary), NRs and civil penalties. The Post story, online at http://www.washingtonpost.com/wp-dyn/articles/A53661-2001Apr7.html provides copious attached documents, including a letter from FSIS Administrator Tom Billy to the media moguls.

The inspection system for fresh meat combines the best science-based hazard preventions available. At the company in question, these include several slaughter intervention procedures, including steam pasteurization. The effectiveness of the newer technologies and the traditional organoleptic inspection methods contribute to the safest and most comprehensive inspection system in the world. New methods are constantly under investigation, but implementation is done only with government/industry cooperation to assure their effectiveness. No matter what the systems, there are only two absolute control points for invisible pathogens: heat and irradiation. All end users of fresh meat, poultry and fish, at home, in food service outlets or institutions, must exercise great care in handling product so that it does not contaminate other foods, especially those that may be consumed without cooking.

The illnesses that result from E. coli O157:H7 are terrible, in terms of pain and consequences. In the case now in the media, the locations where mishandling occurred, the restaurants, are closed. The media is trying to spin things to make it appear that the system doesn’t work. In fact, the system works quite well, and continual efforts to improve it are under consideration (the article is even forced to admit as much when it notes the undeniably dramatic reductions in pathogens after HACCP’s implementation). Meat slaughtering and processing is not particularly photogenic, but the huge majority of those engaged in it, including companies, employees and end users who conduct their own audits in addition to USDA’s inspection system, earn an honest livelihood working to produce safe and wholesome meat for consumers.

The majority of Americans responsible for producing our food are being castigated for the errors of a few in two restaurants who failed to follow strict hygienic principles espoused by all responsible parties, and set forth in safe handling statements on all packages of meat and poultry.

TYSON AND IBP FACE OFF IN COURT

With their stock declining precipitously, Tyson and IBP are now finishing off their merger agreement with a court battle. Tyson filed on April 5, alleging that IBP had made “false and materially misleading” financial reports, and IBP counter-sued on April 6, denying charges and asking the court to force Tyson to honor the terms of the agreement. Tyson, in its suit, is seeking an undisclosed sum to cover the company's expenses during merger process, including reimbursement for the $66.5 million fee it paid to break up IBP’s previously signed merger.

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BURGER KING ADOPTS ANIMAL WELFARE RULES

Burger King became the second large fast food chain to begin enforcing animal welfare guidelines with its suppliers last week. Like McDonald’s before them, Burger King insisted that the move was not prompted by a boycott launched three months ago by PETA (Burger King says it saw around 30 animal-rights protests in the last month, but no direct impact on sales). “We’ve always believed in humane treatment of animals,” said Rob Doughty, a spokesman for the company. “This just makes very clear what we expect our suppliers to do.” PETA naturally declared the guidelines did not go far enough.

NEW APPOINTMENTS AT USDA

President Bush announced his intention to nominate Joseph J. Jen, currently the dean of the College of Agriculture at California Polytechnic State University, to be Undersecretary of Agriculture for Research, Education and Economics. Bush also announced his intention to nominate Mary Kirtley Waters, the Senior Director, Legislative Counsel for ConAgra Foods, to be Undersecretary of Agriculture for Congressional Relations. Indiana hog and grain farmer Jim Moseley was named to the Deputy Administrator position last Tuesday.

EU’S BSE AT “RISK” LIST

The European Union released a list last week of countries considered “at risk” for Bovine Spongiform Encephalopathy (BSE). Most of these countries were placed on the “at risk” list because of their “significant amounts” of imported live cattle and meat-and-bone meal from EU countries that suffer from mad cow disease. According to the EU report, BSE likely exists in Poland, Hungary, Slovakia, Albania, Cyprus, the Czech Republic, Estonia and Lithuania.

CORRECTION

Last week, we incorrectly attributed Paul Brown as saying he wanted to “put to rest” the idea that the government has not adequately investigated BSE. In fact, it was Will Hueston who said this. We apologize for any inconvenience and thank Food Chemical News for bringing this oversight to our attention.

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 9, 2001

NMA AND SMA LEADERS IN WASHINGTON

NMA Executive Director Rosemary Mucklow and Southwestern Meat Association (SMA) Executive Director Joe Harris led a group of leaders from NMA and SMA on the annual expedition to Washington, DC last week. The whirlwind tour started on Tuesday night, April 3, with dinner and guest speaker Richard Galen. Galen writes and publishes Mullings (http://www.mullings.com/), an e-mail and web page political cyber-column, which is read by over 325,000 people monthly. Mullings is widely quoted in print, radio, and television outlets and by political leaders. Galen, who has a background as press secretary for both Dan Quayle and Newt Gingrich, proved to be a lucid, candid and entertaining speaker. In describing the new mood in Washington, Galen said to expect “a system with rules, and to be able to operate knowing what the rules are.” In the Bush administration “your ability to run your business in a logical and profitable way will probably be enhanced,” he added.

Next, on Wednesday, April 4, NMA and SMA started the day at a breakfast with Senate and House Agriculture Committee Staff. The attending staffers were attentive and responsive to industry concerns. John Goldberg staffer for House Agriculture Committee (Majority) noted that Washington right now will have many new opportunities for our industry, “but don’t expect all of your complaints will go away under the new administration.” His words proved prescient the next morning when controversy exploded around the school lunch program (see Lean Trimmings page 1). All the staffers emphasized that the single best way to keep a finger in the political porridge is to educate your Congressional representatives year round and use crisis only as an opportunity to communicate the often obscure functions of the industry.

The group then had a meeting with Barry Pineles, Counsel to the House Small Business Committee. This was an excellent opportunity to many of the attendees, most of whom qualify as small businesses (500 or fewer employees) by the Small Business Administration’s standards. Pineles proved himself to be extremely knowledgeable about our industry and very open to discussing the difficulties that we face nearly every day with regards to regulatory oversight and challenges.

The next meeting was a luncheon. Gary Weber from the NCBA, the planned speaker, was pulled away to the Congressional hearing on Bovine Spongiform Encephalopathy (BSE) and the group met instead with Marshall Matz from Olsson, Frank and Weeda. Matz, who also spoke at last year’s meeting, is one of the foremost experts at the firm which represents NMA in Washington. He emphasized constant vigilance and urged attention to the upcoming Farm Bill which may have several consequences for our industry.

After a brief, affable meeting with Senator Thad Cochran (R-MS) to thank him for his efforts on critical Senate votes last summer, attendees were given time to visit with their Congressional representatives and staff or to take care of any other business they had on the Hill. And, at 5:00 p.m., NMA hosted a very successful reception in the Capital for its Washington-area friends. (Continued on page 2).

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NMA IN WASHINGTON (CONTINUED)

The morning of April 5, the group of leaders from NMA and SMA met with Representative Henry Bonilla (R-TX). It was Congressman Bonilla who spearheaded the House’s recent, successful efforts to stop the national ergonomics standard. He reminded the assembled that they can encourage their employees to get involved in the public process.

The remainder of the day was spent in meetings throughout the Department of Agriculture. Acting Under Secretary for Food Safety/Acting Deputy Secretary of Agriculture John Hogan accompanied NMA in meetings with Dale Moore, chief of staff for Secretary of Agriculture Ann Veneman, and FSIS Associate Administrator Margaret Glavin. Veneman took time out of her extremely busy schedule to meet with the NMA/SMA group for about fifteen minutes, during which she explained the political situation surrounding the School Lunch ground beef testing program and her commitment to seeing it through to a better solution than the one in place now (see Lean Trimmings page 1).

The meeting with Glavin and her staff was an excellent opportunity to discuss the ongoing In-Depth Verification (IDV) reviews and their impact. FSIS appears committed to making the most out of the high potential of these very useful reviews of industry HACCP programs. However, several attendees reported that their IDVs had not gone by without some frustrating surprises that had little to do with actual food safety. Both sides resolved to continue open communication on the issue.

For lunch, NMA met with Acting Under Secretary of Marketing and Inspection Services Hunt Shipman and representatives from several other agencies, including APHIS, AMS and GIPSA. Perhaps the best news came from John Edwards of GIPSA, who said that the three agencies which have oversight of livestock drug residues were pooling their resources to stop violations of this important food safety standard. Although violations occur at only a very low level, they have frustrated packers who are often held responsible for something in which they had no complicity and only very limited ways to respond.

The final meeting of the trip was with AMS Administrator Barry Carpenter, his chief staff members from the Market News, Grading & Certification, Commodity Procurement and Marketing Services, and also staff from the Food Nutrition Service. The main topic of discussion was naturally Mandatory Price Reporting and the School Lunch Program. Unfortunately in both cases the Agency has very little discretion as to how it is to run these programs. The industry has had a very good relationship with these agencies and is sorry that AMS especially has had its hands tied by such bad laws as the one that implemented Mandatory Price Reporting.

During this meeting, AMS discussed the cost of its ground beef inspection program, admitting that it purchased about 10 million less pounds of product this year than last and “for considerably more money.” The price increase was due to new microbiological testing requirements (see Lean Trimmings page 1). Attendees were also provided with a copy of school year purchase totals for beef, pork and canned meat, for a copy send a self-addressed, stamped (34¢) envelope to Jeremy Russell at NMA-West and be sure to include the newsletter date with your request. AMS also announced that it will hold its annual vendor conference on May 3 in Kansas City, Missouri (NMA will host a reception for attendees on May 2).

INDUSTRY HACCP MEETING

The Alameda District is hosting a meeting May 31 from 5pm to 9pm in order to share HACCP related information. Included will be an introduction by District Manager Murli Prasad and Assistant Deputy Administrator Bill Smith’s comments on the Next Steps program. Bill Sveum, associate director of regulatory foods for Kraft, will also speak on the topic of “Implementing Environmental Testing for Listeria.” Later the Technical Service Center will describe Directive 10240.2 and there will be time for questions and answers. The meeting will be held at the La Mirada Holiday Inn at 14299 Firestone Boulevard in La Mirada, CA