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

December 11, 2000

NMA DEVELOPS NEW STRATEGIC PLAN

NMA’s Strategic Planning Committee met in Phoenix, Arizona on Friday and Saturday, December 8-9, for the purpose of developing a new, long range plan for the National Meat Association. NMA’s Strategic Planning Committee comprises the chairs of all committees, NMA’s officers and immediate past leaders. The meeting was well-attended and the group worked diligently to evaluate the way in which NMA’s services and activities meet members’ needs, and what the future goals should be. The Committee will be reviewing its work in the next few weeks and plans to report it to the Board of Directors in February when it meets at the 2001 MEATXPO and Convention in Las Vegas. Please note that all members are invited to attend NMA’s Board meetings.

Board Chairman Harvey Dietrich and his wife Marnie hosted a reception on Friday evening at their beautiful newly built home in the hills overlooking the lights of Phoenix. The group was joined by Honorary Director Leonard Litvak and his wife, and other friends in the Phoenix area. It was a dazzling event!

NMA E-MAIL BLACKOUT CONTINUES

NMA apologizes for inconveniencing its members and friends by being unable to communicate electronically. Apparently, NMA’s Internet Service Provider (ISP) and the firm that retains its server have completely severed their connection, leaving all of ISP’s customers in limbo. This means that e-mails to any NMA e-mail addresses since November 30 are probably somewhere in a big sinkhole in the Pacific Ocean!

NMA was already in the process of accelerating a change to faster internet service, and we are energetically encouraging the people who have to install and rewire these technology changes for us with the old-fashioned buggy whip method. Hopefully, this week, the new system will be up and working, and we regret that there will likely be no way to retrieve all the lost messages. For now, please call of fax information to us.

Please note, that we will be unable to send the Lean Trimmings e-mail edition until these problems are resolved.

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AMS PURCHASE PROGRAM REJECTIONS

Information based on Meat Grading and Certification Branch data received as of December 8 indicates that USDA’s Agricultural Marketing Service (AMS) has so far tested 842 samples representing 76,854,467 pounds of ground beef from 16 vendors participating in its School Lunch Purchase program. So far 8 of the samples from 6 of the vendors have failed due to E. coli O157:H7, resulting in the rejection of 916,160 pounds; 45 of the samples from 11 of the vendors have failed for Salmonella, resulting in the rejection of 3,293,756. Altogether 82 samples have failed for various microbiological positive test results, including Total Coliforms, E. coli and Coagulase Positive Staphylococci, leading to sample failures of 9.74% and 6,577,756 pounds of ground beef rejection.

According to the AMS testing structure, a sample represents a day’s production. Some samples have failed multiple microbiological tests, but were only counted once under a specific microbiological test in the above data.

‘FSIS: THE NEXT STEPS’ PUBLIC MEETING AGENDA

FSIS will hold a public meeting on December 13 from 9:00am to 3:00pm at the Washington Monarch Hotel, 2401 M Street, NW. The meeting is to cover “FSIS: The Next Steps.” It will open with remarks from Catherine Woteki, Under Secretary for Food Safety and follow with an introduction by FSIS Administrator Tom Billy. Agency Infrastructure and Resources will be covered by Assistant Deputy Administrator Bill Smith – topics include how to integrate programs and maximize regulatory verification effectiveness. Deputy Administrator Phil Derfler is scheduled to provide discussion on Risk-based Program Design. Public Presentations will be accepted after lunch. For more information, or to register to make a 5 minute presentation, contact Sally Fernandez at (202) 690-6524.

ERGONOMICS LAWSUIT UNDERWAY

The National Coalition on Ergonomics has launched a lawsuit to block the implementation of the Occupational Safety and Health Administration’s (OSHA) ergonomics rule scheduled to go into effect January 14, 2001. The Coalition filed with the U.S. Court of Appeals for the D.C. Circuit, in the belief that the new regulations would likely cost many time the OSHA estimates. Leslie G. Sarasin, president and CEO of the American Frozen Food Institute, also a party in the lawsuit, expressed the frustration of many in a statement saying: “The finalization of this rule ignores the many concerns raised by industry and the will of a bipartisan majority in both houses of Congress, which voted to block its implementation. In fact, throughout this entire rule-making process, OSHA has relied on 11^th-hour tactics to achieve its blatantly political agenda – only to the detriment of those the agency seeks to protect.”

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IBP RESPONDS TO TYSON

The special committee of independent board members, convened after IBP received an offer to merge from Tyson Foods, submitted its response on December 6. The committee said in its letter that the proposal met “the applicable threshold under IBP’s merger agreement with Rawhide Holdings Corporation and [the company] is therefore prepared to enter into discussions....” IBP Board Member JoAnn R. Smith wrote to John Tyson, Tyson’s CEO, to explain that they needed to discuss ways to protect IBP shareholders because Tyson’s stock had traded below the minimum of the “collar” on the exchange ratio. “I note, as I’m sure you’re aware,” wrote Smith, “that the Committee’s objective, as well as its obligation, is to act to achieve the highest price reasonably available to stockholders.”

The National Farmers Union (NFU), one of the nation's largest farm groups, on Wednesday urged the Justice Department to reject poultry giant Tyson Foods Inc.'s bid. In a letter to the Justice Department, the Farmers Union said a merger between the meat processing industry giants would decrease competition and hurt independent livestock producers. “The choice between a Smithfield acquisition versus a Tyson acquisition of IBP is similar to a choice between death by hanging versus a firing squad,” NFU president Leland Swenson said in a statement. “Either way, the independent producer is gone at the end of the day.”

Tyson, however, has said that its offer does not raise the same antitrust concerns that Smithfield’s offer raised. Tyson also told the Wall Street Journal that it wants to keep IBP CEO Robert Peterson at the helm with his handpicked crew.

SINGLE FOOD AGENCY STILL UNDER CONSIDERATION

When the National Academy of Sciences recommended creating a single food safety agency in 1998, the Clinton Administration tabled the initiative. However, Agriculture Secretary Dan Glickman said his department’s food safety panel may soon call for such an agency, the Los Angeles Times reported on December 5. Glickman admitted that the corn debacle has shown that “there is an awful lot of uncertainty between agencies’ respective regulatory authorities on what to do.” Recent food scares, such as the gigantic recall of StarLink corn or the ongoing panic in Europe (see below), underscore in the public eye the need for more regulation.

BSE IN EUROPE

Pork consumption is on the rise in Europe. “Nobody buys beef right now,” a salesgirl in Germany noted to the Wall Street Journal. In recent days, the European Union (EU) banned all forms of fodder containing animal byproducts, ordered large-scale tests of Europe’s herds and decreed that starting next July, all untested cattle over 2½ years old must be killed. Farmers and ranchers are protesting the changes, but more cases of Bovine Spongiform Encephalopathy (BSE) continue to be uncovered. Spain confirmed its second mad cow case last week. “This case presented lots of doubts but the final report indicates that it is a case of the disease,” Agriculture Minister Miguel Arias Canete told a news conference. Spanish appetite for beef has slumped since news of the country's first mad cow case broke, with sales down 50% over the past two weeks, according to a survey by a national consumer group. The affected cows were from separate herds in different provinces of the Galicia region.

SAFEWAY BUYS EAST COAST CHAIN

The 3^rd largest U.S. supermarket chain, California-based Safeway, agreed to buy closely held Genuardi’s Family Markets Inc. to strengthen its foothold on the East Coast.

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INS RAID OMAHA BEEF PLANT

A vice president and five employees at Nebraska Beef Ltd. were charged December 5 with conspiring to smuggle illegal immigrants to work for the company. Immigration and Naturalization Service (INS) agents also arrested 220 undocumented workers. “Our priority was to arrest the midlevel managers involved,” said Jerry Heinauer, director of the Nebraska-Iowa INS field office. If convicted, they face up to 10 years in federal prison and $250,000 in fines.

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

December 11, 2000

THE CASE AGAINST MPR

USDA Market News is developing an invitation letter to companies who will be required to report under Mandatory Price Reporting (MPR). The letter will inform them that a meeting is being scheduled in Washington, DC on December 19 to provide an overview of the Act and details of the electronic reporting system. The disclosure requirement will apply to packers who annually process 125,000 cattle, 100,000 hogs or 75,000 lambs. Importers who import an average of 5,000 metric tons of lamb products also would be required to report prices they pay. Packers will be required to report details of all livestock purchases as well as sales of boxed beef cuts, boxed lamb cuts and lamb carcasses. Importers must report sales of boxed lamb cuts.

National Meat Association continues to oppose MPR as both unworkable and contrary to law. Immediate implementation of the MPR is bound to be a train wreck, the size of which will vary depending on the feasibility of the electronic platform that has yet to be unveiled. When the Federal Energy Regulatory Commission changed over its annual reporting requirements from a paper format to a computer format, there was an almost six month period of testing prior to implementation. The implementation of computerized livestock price reporting will be far more complex, because it will involve the recording of detailed purchase information by buyers in the field, the transmission of this information to packers, the aggregation of this information, and the manipulation of this information into the format required by AMS. All of this is to be done with no margin for error in an extraordinarily tight time window and subject to $10,000 civil penalties for errors. Moreover, without testing there can be no assurance that AMS’s new computer program can accomplish the rapid synthesis, analysis, and dissemination of all this data, even if the packers do everything right.

NMA has maintained and continues to believe that the Agency violated the notice and comment requirements of the Administrative Procedure Act by not announcing the electronic platform much sooner. Even Microsoft “beta” tests or previews versions of new programs before releasing them in the wild. The MPR final rule will also violate both the statutory provisions of the Paperwork Reduction Act and Constitutional protections against compelled speech.

The economic impact of the proposed regulation may well exceed $100 million. Yet, AMS has failed to conduct and publish a Regulatory Impact Analysis as required by Executive Order 12866. Furthermore, if implemented as proposed, mandatory price reporting would have the unintended consequence of benefiting larger packers at the expense of smaller packers. By imposing relatively greater reporting costs on smaller packers and by providing information that is of greater value to larger packers, the final rule will tend to increase concentration in the meat packing industries.

NMA’s Executive Directory Rosemary Mucklow will attend the USDA meeting on December 19. NMA and AMI are co-sponsoring a packer meeting on the afternoon of December 18 in Washington. For details about attending, please call the NMA office on Tuesday, December 12.

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RESIDUE MEETING TODAY

FSIS is holding a public meeting on residue controls in HACCP today. The meeting will discuss prevention, risk-based program design, sampling, lab capabilities, international considerations and communications. NMA Executive Director Rosemary Mucklow is attending this meeting.

FSIS FUTURE PLANS

USDA’s Food Safety and Inspection Service (FSIS) plans a meeting this week to discuss future plans. Among these plans are efforts to fill gaps “in the HACCP framework and the farm-to-table continuum.” The Agency hopes to develop a multi-year strategy based on a review of public comments and current issues resulting in part from the December 13 meeting. NMA’s Director of Regulatory Services Ken Mastracchio will be there.

ENVIRONMENTALISTS GEAR UP FOR BUSH PRESIDENCY

A number of leading environmentalists have enlisted trial lawyers in a strategy to circumvent what they predict will be the anti-environmental sentiment of an increasingly likely Bush presidency. This strategy, the San Francisco Chronicle reports, would rely on the filing of huge lawsuits against polluters as an alternative to enforcing federal regulations, and would borrow a page from the tobacco litigation book. The first target of this litigious effort is said to be the industrial hog farm industry.

ORGANIC STANDARDS AND MEAT LABELS

National standards for organic food will be released soon, and they will make clear that such products aren't safer or more nutritious than conventional products, according to Agriculture Secretary Dan Glickman. The rules will be one of Glickman's last acts in office. Less certain is when his department will require nutrition labels on meat, something President Clinton proposed last spring, Glickman said in an Associated Press interview Wednesday.

FSIS LEPTOSPIROSIS SAFETY PRECAUTIONS

FSIS issues a new Notice (44-00) to inform program personnel about leptospina microorganisms. The resulting potentially serious disease can be transmitted from animals to humans. Not only are animals with leptospirosis to be condemned, but when animals are found to have or suspected to have the disease, be advised to limit direct physical contact, avoid direct or indirect contact with body fluids, wear protective gloves, eyewear, mouth and nose coverings, report any accidental acquired skin abrasions immediately, sanitize equipment after inspecting the carcass and wash hands with soap and water.

MINNESOTA E. coli O157:H7 RECALL GROWS

A recall that began in Minnesota Cub Stores last week (see last week’s Herd on the Hill) has been expanded to 14 other states and over 1 million pounds of raw ground beef. FSIS is currently working with the Minnesota Department of Health to determine the cause and extent of the outbreak and with American Foods Groups to prevent future occurrences, and with retailers to ensure that all of the suspected products are off the shelves. Minnesota Department of Health spokesman Bobby Ferguson says that on top of the 22 known cases, the state is monitoring several other cases that may be due to the contaminated meat. “They do have three cases in Wisconsin that have the same genetic fingerprint,” he added. “We've also been in contact with the Iowa Department of Health, and they are looking into a couple of cases of E. coli disease to see if they might be associated with the outbreak.” However, it is very significant that no positive has been found in the company’s product and there is only epidemiological evidence at this time.