Meat Industry News for May 28, 2007

"Critics on the right howl that the bill offers "amnesty" to 12 million illegal immigrants who in fact would face a long, onerous path to earned citizenship. But those critics are loath to acknowledge that deporting 12 million people, including droves of workers on whom the American economy relies, is economically suicidal, pragmatically unfeasible and morally repellent.”
(Source: Washington Post, May 23, 2007)
Unsigned editorial pointing out that ideological and uncompromising positions on the immigration issue puts the whole nation in a sadly compromised position.
>PS:(1) A ten foot tall fence can be broached by a twelve foot tall ladder. (2) A field full of lettuce can’t be picked by white collars. (3) Sheep can’t be herded from the inside of an air-conditioned Excalibur. (4) The original Minutemen fought for freedom, not elitist exclusion.







John Hofmeister
“If the national policy of the country is to push for dramatic increases in the biofuels industry, this is a disincentive for those making investment decisions on expanding capacity in oil products and refining. Industrywide, this will have an impact.”
Source: New York Times, May 24, 2007)
John D. Hofmeister, president of the Shell Oil Company, rattling his multi-billion dollar saber because he’s afraid the public trough might dry up.
>PS: What disincentives? His industry is making billions selling a dwindling supply of product to an increasingly voracious world market.
>PPS: Anyone feel sorry for the Hofmeister? The line forms on the Grand Canyon Skywalk just 80 feet from the canyon rim.

“Officials like me in the Chinese government can supervise the producers here, but U.S. companies doing business with Chinese companies must also be very clear about the standards they need, and don't just look for a cheap price.”
Source: USAToday, May 25, 2007)
Yuan Changxiang, deputy director in the ministry responsible for inspecting imports and exports.
>PS: It’s the old ‘you made me do it’ defense. The real culprit is lax or non-existent oversight by Chinese officials and old fashioned greed by unsupervised Chinese companies.





Gregg Doud
“It is simply unacceptable for such trade barriers to cause further economic damage to our industry. We expect this OIE categorization to trigger the lifting of long-standing political barriers to our products in various international markets.”
(Source: Prairie Star, May 25, 2007)
Gregg Doud, NCBA Chief Economist, talking about the recent OIE decision on the US’s BSE status saying ‘enough is enough, already! Open up your markets and let our products live or die on their merits.’


POINT: “This study supports what we have long known. In the absence of public-policy intervention, consolidated and non-competitive markets flourish, while independent family farmers disappear. Independent producers cannot be successful in the absence of protection from unfair and anti-competitive practices. Congress must take action to restore competition in the marketplace. The 2007 Farm Bill is the perfect opportunity to make that happen.”
Tom Buis, NFU President
COUNTERPOINT: “When it comes to market structure and competition issues, NCBA's position is simple - we ask that the government not tell us how we can or cannot market our cattle.”
John Queen, NCBA president
(Source: Prairie Star, May 25, 2007)>
PS: It’s about concentration in the livestock market: The National Farmers Union, American Farm Bureau Federation and R-CALF USA vs the National Cattlemen's Beef Association, National Pork Producers Council and American Meat Institute. Should the feds step in and stop it or let the market make the decision?

“If you're not willing to sacrifice children to the corn god, you will not get out of the Iowa primary with more than one percent of the vote. Right now the closest thing we have to a state religion in the United States isn't Christianity. It's corn."
Source: The Union Leader, May 27, 2007)Jerry Taylor, Cato Institute's energy expert, talking with John Stossel about the politics of ethanol on a recent "Myths" edition of ABC news program 20/20.

Talking about. . .Food safety, World grain shortages, Ethanol

“We are going to end up paying more for food domestically because we have an ethanol policy that is basically tying the price of corn and feed and the resulting food to the price of imported oil."
(Source: Reuters, May 17, 2007)
J. Patrick Boyle, chief executive of the American Meat Institute, one of the organizations talking about an Iowa State University study to determine the impact of ethanol production on food/feed costs.
>PS: Hobson’s choice: Pay more at the pump or more at the supermarket. Ethanol production has increased the grocery bill for the average American by $47 since July, 2007, according to the study.
>PS: Only a small portion of the total end-of-the-year increase is reflected in those numbers. The big “hit” to the pocketbook will be later this year when the first of that $3.50 to $4.00 corn is harvested.

"I certainly don't think it's broken. I think we can improve, but I don't think it's broken."
(CBS News/WebMD.com, May 11, 2007)
Linda Demma, Ph.D., CDC senior epidemiologist who works in the enteric disease epidemiology branch of the CDC's division of foodborne, bacterial, and mycotic diseases. telling WebMD that all is not lost on the food safety front.
>PS: Battered and bruised, maybe, and too focused on U.S.-based food resources when more of our food is being imported from third world countries with little or no oversight. But broken? Heavens, no!
>PPS: Click on her name and check out the article for 15 ways to make your food safer.

"The U.S. is sitting on a powder keg.”
(Source: Business Week, May 21, 2007)
Peter Kovacs, food industry exec and consultant
>PS: To which the writer responded: “That powder keg hasn't exploded--yet. But every month there are a surprising number of near misses. Europe just had a scare from harmful bacteria in vitamin A from China that nearly got into infant formula. And in the past few weeks alone, the FDA has issued warnings or recalls for brands of milk, olives, bottled water, bread, prepared fruit trays, melons, oysters, and peanut butter. The pathogens or contaminants implicated in such scares form an unholy litany: salmonella, listeria, norovirus, nitric acid, arsenic, even wire fragments. Toxins such as lead routinely show up in vitamins and dietary supplements.”

"We think it's (ethanol) going to be a big business. In years where we have great weather, as we continue to grow our productivity and yields, the industry can grow. We just have to be sure that the more-is-better mindset doesn't get way out ahead of the capacity of the land to provide the fuel."
Source: TwinCities.com, May 15, 2007)
Greg Page, future CEO of ag giant, Cargill, talking with some apprehension about the promising future of the ethanol business.
>PS: In his next breath, he threw a little cold water on a rapidly overheating market by saying this about the possibility that the ethanol gold rush might cause a world grain shortage:
"We could be three months away, if we don't have the weather we all expect. What we would like to see is some thoughtfulness about what we will do if we have a weather calamity."

Summer gas - $6.65 a gallon?

Scared you, didn’t I? Unless you’re a denizen of downtown London, then you were thinking, “What’s new?” Those poor blokes have been paying more for their fuel than anyone else on earth. Six bucks plus isn’t just and English thing, though. Parisians pay around $6.50. Driving in Oslo? They pay just a few pfennigs less than the French. Germans are in the same breathless, top-of-the-mark price bracket.

Europeans aren’t the only people surfing above the six dollar level. Filling up a Hyundai in Hong Kong can cost $6.30 per gallon and topping off a Kia in Korea is going to drain your wallet at the rate of $6.06 every time the pump goes “ding!”

Gas stations peddling cheap fuel aren’t history, though. You can top off a Cadillac in Caracas for just 37 cents a gallon. Got a Toyota in Teheran? 33 cents. A Rolls in Riyadh? 45 cents. A Corolla in Cairo? 86 cents.

We gas hogging Americans are in the same three-dollars a gallon range as folks in Moscow ($2.89), Johannesburg ($3.08), and Bangkok ($3.04).

Now, here’s the catch. Brazil is the number two producer of ethanol just behind we Norte Americanos. By law, fuel in that country must contain significant amounts of their sugar cane-based ethanol. By law, the Brazilian government also collects significant tax dollars on all fuel sold so citizens of Sao Paulo, one of the countries’ largest cities, pay nearly $5.00/gallon.

Paying those high prices is not what the American public wants to do. More than energy independence, they want access to cheap fuel at their local 7-Eleven. It's a wallet issue, especially during the summer driving season. In our bifurcated pursuit of energy independence from uncertain Middle East resources, though, we subsidize domestic corn-based ethanol with 51 cents per gallon production ‘bonuses’ on one hand and impose a 54-cents-per-gallon tariff on ethanol imports from Brazil, with the other hand. It’s a policy conflict that will do nothing to minimize our addiction to foreign oil or reduce the price of a gallon of gas.

As a policy, California governor Arnold Schwarzenegger said, "It makes absolutely no sense. It's crazy, and it's definitely not in the best interest of the customers. We need to take down the barriers we have created."

What he was asking the feds to do is impose some rationality on the quest for two interlinked political goals – energy independence and controlling the sky rocketing cost of gasoline.

Bluntly, energy independence isn’t as immediately important to the average American consumer as the price of a gallon of gas when it’s time to pile the kids in the family SUV and drive a half day to the beach, grandma’s house, the lake or that state park in the mountains for their first, long Memorial Day summer weekend. Get us through our summer vacations and we’ll worry about energy independence later…maybe after Labor Day.

Want the distressing facts? U.S. energy independence is probably out of reach, anyway. We’re too addicted to automobiles that don’t come anywhere near the 20mpg level and blocking Brazilian ethanol prevents a solution to the price-at-the-pump problem anytime soon. We’re the largest consumer of energy and we need all the resources we can find – petroleum, wind, ethanol, geothermal - to supply our habit.

The price of petroleum will continue to drift upwards at an alarming rate as emerging economic powerhouses such as China and India belly up to bar and bid for the limited number of barrels of sweet crude coming out of the Middle East and elsewhere around the world. The energy demands of more nations reaching for parity with our standard of living will create serious political friction and encourage armed conflict, making supply and distribution even more uncertain.

As for that $6.65 price in downtown London? Don’t be surprised if the corner 7-Eleven station is within whispering distance of that insane level before the end of this decade.

Angus Beef, Kobe Beef, Food Safety, Chinese Chicken

"What the restaurant and retail grocers are counting on is that the consumer can make broad distinctions about quality.”
(Source: Advertising Age, May 7, 2007)
Jay Grob, partner at Bain & Co. likening the selling of Angus and Kobe beef to coffee, where Starbucks redefined the category around premium blends and ended the era of nickle coffee.
>PS: Bank of America analyst Andy Barish estimated premium meats boosted same-store restaurant sales about 2% to 3% for publicly held chains, compared with just 1% a few years ago.


"With the passage of this amendment, we will make our nation’s food safety system stronger on several fronts. There is more work to be done to fix our food safety system, but today we have moved forward to address the growing concerns across our nation."
(Source: Meat&Poultry, May 8, 2007)
Sen. Richard Durbin, D-Ill., talking about the Senate’s approval, by a 94-0 vote, of a food-safety amendment that would establish ‘an early warning and notification system for human food, as well as pet food, establish fines for companies that don't promptly report contaminated products, improve inspections/monitoring of imports, and provide pet food safety standards.’ The amendment is attached to a bill reauthorizing FDA funding, which is still on the Senate floor.
>PS: An overwhelming vote --- did it take thousands of pet deaths to get the political will to take a long overdue step?


“Cyanuric acid scrap can be added to animal feed, I sell it to fish meal manufacturers and fish farmers. It can also be added to feed for other animals.”
Yu Luwei, general manager of the Juancheng Ouya Chemical Company in Shandong Province, admitting complicity.
...............................AND.................................
“I’ve heard that people add cyanuric acid and melamine to animal feed to boost the protein level.”
Yang Fei, salesman for Shouguang Weidong Chemical Company in Shandong Province, suggesting the practice in China is wide spread.
(Source for both comments: New York Times, May 9, 2007)
>PS: Are you buying feed? Until strict controls are put in place by the Chinese government and S. Korean style batch-by-batch inspection is instituted by the U.S. government, maybe you should avoid any supplier using Chinese resources.


“The system, as currently constituted, is flawed. Global and economic realities have put enormous holes in the safety net. If we don’t deal with the problem, it is only going to get worse, and the dropping public food safety confidence numbers we’re seeing today may look like just a happy memory in only a few years.”
(Source: Morning News Beat, May 9, 2007
Kevin Coupe, supermarket industry observer, warning of a fast collapsing public confidence in our food supply.
>PS: There has never been a more compelling reason to “eat local” and organic than the recent news that’s been published about the cavernous holes in our food inspection system. Ask your grand parents about Victory Gardens.

Our food inspection system is in crisis

"Simply put, our food safety system is broken…The reality is that there currently is no mandate, no leadership, no resources, nor scientific research base for [creation] of food safety systems."
David Kessler

David Kessler is the former FDA commissioner and a man who should know. He was talking to the members of the House Oversight Committee about a rapidly growing crisis. Although he was referring to just the problems most recently evident with the FDA, it’s our entire food inspection system that’s failing miserably.

Here’s the most pressing recent problem: Monitoring the quality of imported ingredients to be used in animal or human food processing has proven itself to be the modern day equivalent of taming the wild and wooly West. Importers get an (almost) free pass to do as they please. For years, now, shady traders could ship anything into the U.S., safe in the knowledge that less than 1% of their shipments would receive even the most cursory inspection. Take that, Homeland Security! No holes in that safety net!

A few months ago, uninspected melamine-spiked wheat gluten from China found its way into pet food. By all reports, it’s a long-standing practice among many Chinese traders. The FDA assumed the crisis was handled after tons of product were recalled and thousands of pets died. Were the recalls the price of running a food business driven solely by least cost formulations? And would that make the resulting deaths merely collateral damage?

The crisis jumped ship, though. A Chinese rice protein concentrate, contaminated with melamine and melamine-related compounds, was fed to pigs and chickens. Federal investigators are looking into contaminated hog feed in six states - California, Kansas, New York, North Carolina, South Carolina, and Utah.

The problem was traced back to feed produced in March. The belated discovery allowed hundreds of thousands of chickens and an unknown quantity of pork to reach the corner supermarket. Was that March incident a one-time thing? Maybe not. The inspection problem and Chinese chicanery stretches back for years. If we’re to follow truth in labeling laws, we should call it the first discovered incident.

FDA officials then attempted a CYA maneuver when they said we shouldn’t worry about the product that had already found its way into the nation’s human food supply. The melamine content was too dispersed to worry about, they said. But, to be safe, they’re requiring the destruction of thousands of animals that haven’t been converted to packaged product. Legally, FDA spokesmen say, it’s all they can do because they don’t have the authority to do more. They also claim it’s a scientifically sound decision, but it doesn’t pass the consumer’s sniff test which is the ultimate arbiter of what’s acceptable.

If the consumer thinks it stinks, it stinks. End of story. Also, end of commerce for the stinker. “Science” be damned!

I keep thinking about the assurances that the British government handed out to a gullible public in the earliest days of the BSE panic. “Don’t worry, I’m from the government and I’m here to help you” doesn’t necessarily cut it, anymore. Maybe the FDA should check with the UK Food Standards Agency for instructions on how to (mis)handle a food inspection crisis.

Simply put, the critical government agencies don’t have the manpower, money or political clout to do their job. The sweep of twenty-first century world commerce has overwhelmed the capacity of the USDA and the FDA. Both agencies are standing in the muddy backwaters of the mid-twentieth century, trying to figure out where undiscoverable and unknowable modern-day problems might be lurking.

Here’s the heart of the problem: Too many food (and feed) processors looked for the cheapest ingredients and found them in severely under-regulated foreign ports-of-call that the FDA and the USDA couldn’t touch. Processors didn’t understand the truth behind the Reagan dictum, “Trust, but verify.” They trusted their new foreign trading partner’s promises to deliver products equivalent to the more expensive (because they’re highly regulated) products they used to buy from North American suppliers. They weren’t able to verify those promises, though, and the true price of cheaper ingredients is now being paid by both the “control-costs-at-all-costs” processor and the consumer.

Washington needs to summon the political will to act now, even if they are a day late and a dollar short. A combined and better-funded USDA and FDA is the only answer to improved inspection of a much more complex food chain that’s been truly international for decades. Borders to our food supply simply do not exist and our responsible federal agencies haven’t been properly equipped to handle that kind of world.

More on the Safe Food Act of 2007

I was trying to make sense out of the outdated, feeble-minded food safety system the U.S. has cobbled together over the last 100 years when I came across this article in the Ethicurean. Read it and weep.

by Mental Masala @ 2:37 pm on 5 May 2007.
The Safe Food Act of 2007 (H.R. 1148 and S.654) was recently submitted by Rep. DeLauro (D-CT) in the House and Sen. Durbin (D-IL) in the Senate. Although it might seem like DeLauro and Durbin are responding to the current series of food safety crises, they have been trying to change the food safety system for at least a decade (the Library of Congress’s THOMAS only goes back to 1997). In the 1997 edition DeLauro’s name was on it as a co-sponsor, and in subsequent years she has been the lead sponsor. In the Senate, Sen. Durbin has been the sponsor in each year.

The Safe Food Act calls for the creation of a single cabinet-level Food Safety Administration with a singular mission: safe food. The bill aims to increase the frequency of inspections of food processing plants, create a method to trace food ingredients to their points of origin, and to step up monitoring of food imports. Unlike the current FDA, the administration will have the power to order mandatory recalls of unsafe foods.

Fifteen agencies, unusual boundaries

The current food safety system is a mish-mash of government agencies. Fifteen agencies and over thirty laws govern food safety. In a recent report (PDF), the Government Accountability Office (GAO) described some of messiness:

The food safety system is further complicated by the subtle differences in food products that dictate which agency regulates a product as well as the frequency with which inspections occur. For example, how a packaged ham-and-cheese sandwich is regulated depends on how the sandwich is presented. USDA inspects manufacturers of packaged open-face meat or poultry sandwiches (e.g., those with one slice of bread), but FDA inspects manufacturers of packaged closed-face meat or poultry sandwiches (e.g., those with two slices of bread). Although there are no differences in the risks posed by these products, USDA inspects wholesale manufacturers of open-face sandwiches sold in interstate commerce daily, while FDA inspects closed-face sandwiches an average of once every 5 years.

Major bureaucratic surgery required

Getting from the current system to a unified food safety organization will be difficult. As mentioned above, fifteen federal agencies play a part in the food safety network, and so major bureaucratic surgery will be necessary. Sec. 102(b) of the proposed Safe Food Act of 2007 lays out the government agencies which would be folded into the Food Safety Administration if the law is enacted:

1. the Food Safety and Inspection Service of the Department of Agriculture;
the Center for Food Safety and Applied Nutrition of the Food and Drug Administration;
2. the part of the Agriculture Marketing Service that administers shell egg surveillance services established under the Egg Products Inspection Act (21 U.S.C. 1031 et seq.);
3. the resources and facilities of the Office of Regulatory Affairs of the Food and Drug Administration that administer and conduct inspections of food establishments and imports;
4.the resources and facilities of the Office of the Commissioner of the Food and Drug Administration that support–(A) the Center for Food Safety and Applied Nutrition; (B) the Center for Veterinary Medicine; and (C) the Office of Regulatory Affairs facilities and resources described in paragraph (4);
5. the Center for Veterinary Medicine of the Food and Drug Administration;
6. the resources and facilities of the Environmental Protection Agency that control and regulate pesticide residues in food;
7. the part of the Research, Education, and Economics mission area of the Department of Agriculture related to food safety and animal feed research;
8. the part of the National Marine Fisheries Service of the National Oceanic and Atmospheric Administration of the Department of Commerce that administers the seafood inspection program;
9. the Animal and Plant Inspection Health Service of the Department of Agriculture; and
10. such other offices, services, or agencies as the President designates by Executive order to carry out this Act.

That list covers four cabinet agencies: the USDA, Health and Human Services, the EPA, and the Department of Commerce. And thus many high-level political appointees will see their budgets and staff count decrease, two numbers which some see as measures of importance in Washington.

With Congress occupied by the disaster in Iraq, the Farm Bill reauthorization, and catching up on six years of oversight neglect, it’s hard to imagine such a major overhaul occurring this year. However, the E. coli in spinach crisis of 2006 and the current melamine contamination issue are focusing a lot of attention on food safety. The best bet in the near term is to add more co-sponsors to the bill, thus causing the Congressional leadership to pay more attention to the issue. You can help by writing or calling your Representative and Senators and informing them of your concerns about the current food safety system and asking them to sign on as co-sponsors of H.R. 1148 or S.654. The House bill currently has only 15 co-sponsors and the Senate bill has 3 co-sponsors, so there are plenty of lawmakers who have not signed on yet.