KAY'S Korner

Mar 30, 2012

Into the gutter

The gutter press appears to be alive and well in America. How else can one describe the appalling media disparagement of lean finely textured beef (LFTB) and Beef Products, Inc., (BPI) one of the two companies that make it? I’m not a conspiracy theorist. But it seems more than a coincidence that the drumbeat against a safe and nutritious meat product has been taken up by one media outlet after another over the past three years.

I’ve been a journalist since 1973. I never thought I would see the re-emergence of the gutter press of the early twentieth century, when powerful media barons stopped at nothing to destroy reputations and businesses. How else can one describe a derogatory and imbalanced story about BPI and its product in a Dec. 31, 2009, story in the New York Times? This story was the first to mention the term “pink slime,” a label coined by disaffected USDA scientist Gerald Zirnstein, who, for several years, had railed against LFTB being part of the ground beef supply.

This was the story celebrity chef Jamie Oliver latched on to and probably did more than anyone to etch the infamous term in the minds of nave viewers. I say “naive” because Americans should be more discerning in deciphering fact from fiction. In this internet age, it’s easy to find out the difference. Yet many people simply believe what they hear or see. That’s frightening, especially if the images are false.

ABC sure played on this. In a piece of reporting that astonished me with its laziness and indifference to the facts or any semblance of balance, ABC merely regurgitated the New York Times story, with the so-called “news peg” that LFTB was in 70 percent of supermarket ground beef. Leaving aside the point that this was an exaggeration, ABC neglected to state that LFTB has been in ground beef for 20-plus years.

The obvious reason that ABC attacked LFTB was to improve its ratings. Any other reasons (anti-meat, food elitism) can be only surmised. I’m told that ABC a year or so ago made a decision to inject its news programs with more social advocacy stories. But why didn’t ABC tackle a real subject? What about something that actually kills tens or hundreds of Americans every year? ABC made no mention of the fact that no illness has ever been linked to LFTB. This would have ruined its story.

The smear campaign against LFTB, and by inference, finely textured beef (FTB) produced by Cargill, has already had severe consequences. Use of BPI’s product has dropped so much that BPI has suspended operations at three of its four plants and temporarily laid off 650 people. ABC can now add “job loser” to its credentials.

Another consequence is that the negative publicity over ground beef has hurt sales of the industry’s most important product. Some consumers have stopped buying any ground beef and are buying ground turkey instead. This is primarily why the price of 90CL beef has weakened the past three weeks, after being at record levels at the start of March.

The price of 90CL will rebound, however, once retailers stop using LFTB or FTB and have to buy more 90s to blend with fattier grinds. It’s worth looking at what occurred to wholesale 90s prices last year in relation to firms deciding to stop using BPI’s product. Burger giant McDonald’s stopped using it in early 2011 and started buying more fresh 90s. There was little price impact until Burger King and Taco Bell stopped using it last September-October. The price of 90s went from $167 per cwt in mid-October to $197 by year end. It averaged a record $187.42 for the year, up 18.4 percent from 2010’s $158.30.

The price of 90s the week ended March 10 averaged $220.40 per cwt, up 13.5 percent on the same week last year. The expected decline in cow slaughter in 2012 from 2011 and only a modest projected increase in imports might force the price this year to an average $225 or higher. The price will likely exceed $250 per cwt at times.

Less LFTB on the market and record high 90CL prices mean that retailers will be forced to offer less lean ground beef and raise the price of their fattier categories. That’s bad news for consumers. It also will hurt the industry’s ability to sell all parts of the carcass (including fatty trim) at the highest possible price.

BPI is an industry pioneer in part because it developed a means to recover perfectly good meat that used to go to rendering. I’m told the beef industry will lose $10 per head on fed cattle if it loses the LFTB/FTB category altogether because 50CL trim won’t be worth much (its price has already fallen). This and the slime campaign against LFTB are two reasons to be deeply disturbed by what has occurred.

—Steve Kay

(Steve Kay is Editor/Publisher of Cattle Buyers Weekly, an industry newsletter published at P.O. Box 2533, Petaluma, CA, 94953; 707/ 765-1725. Kay’s Korner appears exclusively in WLJ.)