News Update

News Update
Feb. 29, 2008

USDA Faces Congressional Grilling, Lawsuit

Triggered by the Feb. 17 recall of 143 million pounds (lb.) of meat, lawmakers convened Feb. 27 and 28 to debate U.S. food safety regulations and question agriculture and food industry representatives.

During a Senate hearing yesterday, several Congressional leaders called for a complete ban on downer cattle from entering the food supply, according to The Associated Press (AP). U.S. Secretary of Agriculture Ed Schafer resisted the suggestions, however, telling Reuters, “I am convinced that the rules in place today are protecting the (food) supply. … They broke the rules. It doesn’t mean the rules are wrong.”

Instead, Schafer said the Agriculture Department must first discover what exactly happened at Hallmark/Westland Meat Packing Co., and determine if it’s happening at other processing locations.

In addition, Schafer said the agency will begin more random inspections of harvesting facilities and will perform immediate audits of 23 sites that provide beef for federal food programs.

Wayne Pacelle, president of The Humane Society of the United States (HSUS), also spoke at the hearing, echoing calls for a complete ban on downer cattle.

American Meat Institute (AMI) President J. Patrick Boyle also testified, calling the actions at the Chino, Calif., plant a “shocking departure from both industry best practices and typical operations in federally inspected meat plants.” Boyle expressed frustration with HSUS’s handling of the undercover video footage that first exposed the violations. “One can also ask of the Humane Society how it could allow this abuse to continue for almost four months, while it edited its video for release …”

Boyle said USDA officials sent a mixed message to media and the public when it announced such a massive recall, yet stated the beef presented a negligible health risk. Boyle called for a more thorough risk assessment from USDA in the future before requiring such a massive recall.

Yesterday’s Senate hearing echoes a House of Representatives Energy and Commerce subcommittee meeting Feb. 27, during which representatives urged food industry executives to do more to prevent recalls and unsafe products, according to Reuters. Although food companies like Dole Food Co. and ConAgra Foods have initiated steps to highten food safety, lawmakers said the food industry hasn’t done enough to prevent unsafe products from reaching consumers, Reuters reports.

In related news, HSUS filed a lawsuit against the U.S. Department of Agriculture (USDA) Feb. 27 in an effort to ban downer cattle from entering the food supply. According to an HSUS release, the lawsuit alleges that the downer “loophole” is “irrational and inconsistent with the USDA’s obligations to ensure humane handling and food safety under the Humane Methods of Slaughter Act and the Federal Meat Inspection Act.”

Oil Reaches $103 Per Barrel, Subsides

Light, sweet crude oil for April delivery hit $103.05 per barrel on the New York Mercantile Exchange today before falling to $102.02 per barrel midday in Europe, CNN.com reported. Yesterday’s contract reached a record settlement price of $102.59 a barrel, according to the article.

Sources quoted by CNN.com say more investors are buying into commodities, oil included, due to a weakening dollar and rising fear of inflation.

Food Prices a Growing Threat

Rising food costs fueled by growing demand, oil prices and global warming have sparked a growing threat of food shortage, a Feb. 27 Time article noted.

According to the article, available at www.time.com, several countries are struggling to feed their people. Hungry crowds rioted in at least one African nation last week, and protestors in India last fall burned food-ration stores after stockpiles ran out. Food relief organizations are finding it difficult to keep up with demand as food prices skyrocket and more hungry people no longer able to afford food seek relief.

Smithfield Cuts Sow Herd

Smithfield Foods Inc. announced Feb. 19 plans to reduce its U.S. sow herd by 4%-5%, or 40,000 to 50,000 sows. According to Smithfield, this ultimately will result in production of 800,000 to one million fewer market hogs annually.

The company will begin phasing in these reductions immediately, a company release stated. Smithfield currently raises 18 million market hogs annually.

“Given the economics for raising hogs today, we cannot continue on the current path; something has to change,” said C. Larry Pope, president and chief executive officer (CEO). “Grain costs continue at record levels, with the potential of escalating, given the current U.S. government policy favoring corn for ethanol. Today the economics are very challenging and we believe that these increased costs will translate eventually into still higher food costs for the American consumer. In the meantime, Smithfield is taking immediate action to improve the efficiencies of our live production operations.”

For more information, visit www.smithfieldfoods.com.

Schafer Names Joseph Glauber as Chief Economist

Secretary Schafer announced Feb. 28 the selection of Joseph Glauber as USDA Chief Economist. Glauber has served as Acting Chief Economist since the Jan. 3, 2008, retirement of Keith Collins.

As chief economist, Glauber is responsible for USDA’s agricultural forecasts and projections and for advising the Secretary of Agriculture on economic implications of alternative programs, regulations, and legislative proposals. His responsibilities include the Office of the Chief Economist, the World Agricultural Outlook Board, the Office of Risk Assessment and Cost-Benefit Analysis, the Global Change Program Office, and the Office of Energy Policy and New Uses. Glauber has served as Deputy Chief Economist at USDA since 1992. He was recently elected to serve as Chairman of the Federal Crop Insurance Board of Directors in his capacity at USDA. He returned to USDA in December from temporary assignment to the office of the U.S. Trade Representative.

— compiled by Crystal Albers, associate editor, Angus Productions Inc.