The
AGRIBUSINESS
EXAMINER
July 19, 2002   #175
Monitoring Corporate Agribusiness
From a Public Interest Perspective

EDITOR\PUBLISHER: A.V. Krebs
ADDRESS: PO. Box 2201, Everett, Washington 98203-0201

E-MAIL: avkrebs@earthlink.net
WEB SITE: http://www.ea1.com/CARP/
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USDA GAMBLES WITH PUBLIC HEALTH
TO ENSURE PROTECTING A COMPANY,
MEAT INSPECTORS WAIT TWO WEEKS
BEFORE NOTIFYING CONAGRA ITS MEAT
MIGHT BE CONTAMINATED WITH DEADLY E-COLI

DAVID MIGOYA, THE DENVER POST: Federal meat inspectors suspected that ConAgra ground beef was contaminated with potentially deadly E. coli two weeks before they asked the company to issue a giant recall.

But U.S. Department of Agriculture inspectors never told ConAgra --- or the dozens of supermarkets across the country that were selling the tainted meat --- that ground beef it produced might have E. coli and could make consumers sick, The Denver Post has learned through federal records and interviews.

Instead, inspectors who found the first of the tainted meat at a Denver processor in mid-June spent the rest of that month testing for more E. coli before finally asking ConAgra Beef Co. in Greeley on June 30 to issue the recall.

By then, the meat ConAgra sold to processor Galligan's Wholesale Meat Co. --- none of it distributed publicly --- had failed four E. coli tests, stores in at least ten states were selling thousands of pounds of the meat they bought through different suppliers, and reports of illnesses to Colorado health officials were starting to stack up. Local USDA officials refused to comment [last] Friday about why the agency did not warn ConAgra that ground beef it produced May 31 was suspect, something company officials said they would like to have known.

On Friday, state health officials confirmed that six more people were sickened after eating E. coli-tainted ground beef, including a boy from South Dakota who was airlifted to Children's Hospital in Denver for treatment. That brings to 18 the number of victims afflicted with E. coli 0157:H7, the most in Colorado since 1997 when 17 illnesses led to the recall of 25 million pounds of tainted ground beef from a Nebraska producer, then the largest recall in U.S. history.

Health officials confirmed that a dozen of the victims were sickened by the recalled meat and are using DNA evidence from the meat and the victims to link the others. The department is also testing eight new victims to see if their illnesses are related to E. coli.

"This is truly outrageous. The USDA at a minimum should give companies notice that their product is suspected of contamination," said Caroline Smith DeWaal, food safety director for the Center for Science in the Public Interest in Washington. "This is not just a disservice to the public, but it's gambling with the public health to ensure the USDA is not harming a company."

The company recalled 354,000 pounds of ground beef, much of it distributed through Safeway stores in Colorado and five other Western states.

A ConAgra spokesman expressed surprise Friday that its meat was suspected for contamination long before the USDA asked the company to recall its product. The company likely would have considered asking customers such as Safeway to withhold the meat from shelves until the E. coli finding was confirmed, spokesman Jim Herlihy said. "We would have liked to get to the bottom of it as soon as possible before people continued to consume the product," he said.

USDA regional director Ronald Jones, who runs the agency's Boulder office and is responsible for inspection operations in several Western states including Colorado, refused to comment Friday, hanging up on a reporter after referring questions to USDA headquarters in Washington.  A USDA spokesman in Washington could not be reached for comment late Friday.

E. coli 0157:H7 is a virulent form of the bacteria that comes from the feces of slaughtered cattle. This year there have been 11 recalls of E. coli-tainted ground beef nationwide, according to the USDA's Food Safety Inspection Service website. Another 14 cases, including the one involving the ConAgra meat at Galligan's, included positive tests for the pathogen, but the companies did not distribute the product during testing. No recall was issued.

The USDA first suspected on May 14 that ConAgra meat might be tainted. That's when an inspector found E. coli in a batch of ground beef at Galligan's. USDA inspectors weren't sure where the E. coli came from because Galligan's mixed ground beef it purchased from two different suppliers, a common practice among meat processors, then sold it to customers that include Denver's City Jail.

One of the suppliers was ConAgra.

Galligan's officials said Friday that they never allow meat to be distributed while the USDA is testing, partly to ensure contaminated meat doesn't reach the public. To isolate the source of the E. coli, Galligan's officials decided to keep separate the ground beef purchased from the two suppliers. USDA tests on June 11 and 13 found no E. coli, company owner Richard Galligan said. That meat was from a supplier different than ConAgra.

USDA records show ground beef tests on June 12 and 14, however, were positive for the pathogen. The meat tested on those days came from ConAgra in Greeley, according to several federal and private sources familiar with the recall.

"We're very satisfied that our manufacturing practices kept (contaminated) product we received from going into commerce," Galligan said. "It's the responsible thing to do, both as a businessman and as a citizen. I don't want to see people get sick, so I won't allow any meat to go until the USDA tests show everything's OK."

Despite finding the E. coli on two separate occasions, the USDA didn't tell ConAgra that its meat was being scrutinized. That's because the agency tested the ground beef Galligan's had made from ConAgra meat. The USDA didn't test sealed ConAgra packages that Galligan's had bought. That happened on June 24, when a pair of unopened 10-pound chubs Galligan had purchased that month from ConAgra were sent to a USDA lab. Both chubs tested positive for E. coli.

That started the recall --- on June 30, a month after the tainted meat had been produced. "I'm not aware of any regulation that doesn't allow the USDA to tell a suspected supplier that there might be a problem with their product," said Seattle-based attorney William Marler, a food-safety specialist who represents four families in the Colorado outbreak.

"Good business practices would have been to allow ConAgra to at least tell its outlets that 354,000 pounds should be held for a couple days until tests showed it was OK. Why the USDA wouldn't do that is beyond me." Galligan said he's not sure whether the USDA should prohibit companies from distributing meat that's being tested, but he'll continue the voluntary practice to ensure his customers are protected.

"A guy has to be a fool to put a product out there that's being tested," he said. "We're a small company, and it's in our best interest to be sure our customers get good, wholesome meat."

USDA regulations allow companies to "ship or hold" their product during E. coli testing. Much of the ground beef ended up in Safeway stores, although company officials haven't said exactly how much of it they sold.

Safeway announced July 2 that it had sold some of the meat, but the growing number of reported illnesses made company officials extend the recall to include ground beef it sold during a two-week period in June, Safeway spokesman Jeff Stroh said. The company announced Thursday that it had suspended its ground beef purchases from Con-Agra until the USDA recall investigation is completed.

Additional samples of ConAgra meat are being evaluated by the Colorado Department of Public Health and Environment. Some have been genetically matched to illnesses in victims, said Dr. Jim Beebe, a state microbiologist. Two-year-old Olivia Rodriguez of Aurora is the only victim who remains hospitalized. She is in good condition at Children's Hospital.
 

INSPECTION SCANDAL MOTIVATES USDA
TO CHANGE MEAT NOTIFICATION POLICIES

DOW JONES NEWSWIRES: U.S. federal inspectors will begin notifying meat processors immediately when they suspect beef may be contaminated as a result of an E. coli outbreak that has sickened at least 18 people.

The policy change comes after the Agriculture Department's Food Safety and Inspection Service acknowledged a 12-day lag from the time it first suspected ground beef had been tainted with E. coli, until the time the producer, ConAgra Beef Co. (CAG), based in Greeley, Colorado was notified and a recall issued.

"This is deeply troubling," Linda Swacina, acting administrator of the Food Safety and Inspection Service, said in a statement Monday. As a result, Swacina said that inspectors will now notify a meat producer verbally and in writing as soon as a positive E. coli sample is discovered in ground beef that has been sent to a retailer or grinder. "This will allow all the suppliers to take proactive steps without waiting for results from the FSIS investigation," Swacina said.

The FSIS has also dispatched an investigation team to the ConAgra plant in Greeley which was found to be the source of the tainted meat.

Tests taken June 12 and June 14 at Galligan's Wholesale Meat Co. in Denver showed the meat was contaminated with E. coli. On June 24, follow-up tests conducted to determine the source indicated meat from the ConAgra plant was the source of the contamination.

But it wasn't until June 29 that ConAgra was notified its meat had been contaminated, and the company recalled 354,200 pounds of ground beef the next day.

FSIS spokesman Steven Cohen said that, under the new policy, ConAgra and other producers that supplied meat to Galligan's would have been notified of the contamination immediately after the first test results came back. "Any information that we have that would give reason to believe that our products might be suspect would be welcome and the sooner we have that information the sooner we can respond to it.," said ConAgra spokesman Jim Herlihy.

Caroline Smith DeWaal, food safety director for the Center for Science in the Public Interest, said the change should benefit plants and consumers and praised the FSIS for their action. "The government has responded swiftly. It's unfortunate it has taken this kind of tragedy," she said.

Galligan's had put a hold on distribution of meat form the tainted batch after the June 12 test was taken, but other retailers sold the contaminated ConAgra meat before the recall was issued.

The tainted ConAgra beef was shipped to Colorado, Alabama, Virginia, Maryland, New Mexico, Kansas, Michigan, Texas, Wyoming, Montana, Nebraska, New York, California, Illinois, Iowa, Tennessee, New Jersey, Minnesota, Arizona, Idaho.

Eighteen people --- 17 Colorado residents and a South Dakota child ---have become ill from eating the beef. E. coli can cause bloody diarrhea and intense abdominal cramps. Children and the elderly are at most risk for hospitalization. Proper cooking can kill E. coli.
 

CONAGRA RECALLS 19 MILLION PDS. OF BEEF,
SECOND LARGEST RECALL IN U.S HISTORY,
PAST HISTORY INDICATES CONSUMERS
WILL LIKELY "BRUSH OFF" SERIOUSNESS OF THREAT

REUTERS: ConAgra Foods Inc. has launched the nation's second-largest recall of ground beef because of potential contamination with a deadly bacteria that has sickened at least 16 people, the U.S. Agriculture  Department said [today].

The decision by the No. 2 U.S. food company to pull a total of nearly 19 million pounds of fresh and frozen ground beef at the height of the summer barbecue season ranks second to Hudson Beef's record recall of 35 million pounds of meat in 1997. The news sent shares down seven percent.

ConAgra is the-second biggest supplier of food and meat after Kraft Foods Inc. Its brand names include Hunt's Ketchup and Healthy Choice Meals.

The number of illnesses from ConAgra beef tainted with E. coli 0157:H7 was difficult to pinpoint. The U.S. Centers for Disease Control said it confirmed at least 16 people were sickened by the ConAgra beef in Colorado, California, Michigan, South Dakota, Washington and Wyoming. Another six illnesses were under investigation. Earlier, USDA officials said at least 19 people had fallen ill because of the tainted beef.

ConAgra agreed to recall almost 19 million pounds of beef [today], after first pulling 354,200 pounds from the market on June 30. The ground beef was sold in 21 states. "This action is being taken as a cautionary measure to ensure the protection of public health," Agriculture Secretary Ann Veneman said. "Public health is our number one priority."

E. coli O157:H7 can cause bloody diarrhea, dehydration and kidney damage. Children and the elderly are the most at risk.

The 19 million pounds of additional meat recalled was produced at the company's Greeley, Colorado, plant between April 12 and July 11, the USDA said. Some of the meat was sold at Safeway grocery stores, although the USDA refused to detail how much.

The USDA said it would publish later [today] a list of meat inspection lot numbers that were stamped on packages of ground beef that has been recalled. Consumers should return the meat to a grocery store or discard it. "We have no way of knowing for sure how much (beef) is in consumers' hands," said USDA Undersecretary Elsa Murano.

A ConAgra spokesman declined to comment, saying only that the company has held talks with the USDA over the past week.

The recall also raises questions about ConAgra's pending deal to sell off more than half its fresh meat processing operations to a private investor group led by Hicks Muse Tate & Furst. The deal, valued at about $1.4 billion, was intended to allow ConAgra to focus more on branded  consumer products such Healthy Choice and Armor meats. Analysts said the huge recall may not dampen consumer demand for grilled hamburgers at summer picnics.

"I continue to be amazed at the capacity of the American consumer to brush off most recalls,'" said Credit Suisse First Boston food analyst David Nelson. "I've yet to see Americans get overly concerned about this type of thing."

Consumer groups criticized the Bush administration for delays in recalling the ConAgra beef. The department's Food Safety and Inspection Service admitted that it waited ten days after federal meat inspectors first detected the E. coli bacteria in a ConAgra sample before notifying the company.

An embarrassed USDA this week revised its food safety policy to require federal meat inspectors to immediately alert a beef company when its sample tests positive for E.coli. Inspectors will no longer wait until an  investigation is complete before notifying a company. Carol Tucker Foreman, food policy director for the Consumer Federation of America, said the USDA was more concerned about protecting big agribusiness companies than consumers.

The National Cattlemen's Beef Association, which represents ranchers, said the recall showed the need for meat companies to invest in irradiation technology that uses low doses of electrons or gamma rays to destroy dangerous bacteria.

The largest U.S. food recall for E. coli 0157:H7 contamination was in the summer of 1997.  Hudson Foods first recalled 25 million pounds of its ground beef when 15 people in Colorado fell ill. The firm eventually pulled a total of 35 million pounds of beef off the market after investigators determined that some of the tainted ground beef was reworked into batches of non-contaminated beef. Hudson was purchased by poultry giant Tyson Foods Inc. one year later.

The E. coli 0157:H7 bacteria is destroyed when meat is cooked to an internal temperature of 160 degrees Fahrenheit. . . . .
 

CONAGRA FOODS STOCK DROPS 7%
ANALYSTS SEE ONE CENT A SHARE LOSS

MICHAEL MCHUGH, DOW JONES NEWSWIRES: Shares in ConAgra Foods Inc. [were] down almost ten percent Friday after the U.S. Department of Agriculture announced a recall of 18.6 million pounds of beef from the Omaha-based food giant suspected of being contaminated with E. coli bacteria.

ConAgra stock is off $2.35, or 9.9%, to $21.45 on volume of three million shares. Average daily volume is 2.1 million.

The USDA said the recall was voluntary and affects beef trim and fresh and frozen ground beef products destined to become ground beef to be produced in the company's Greeley, Co., plant. "This action is being taken as a cautionary measure to ensure the protection of public health," said USDA Secretary Ann Veneman.

Analysts do not expect the recall to have much of an impact on ConAgra's earnings. "I think it's important not to overreact," said Christine McCracken of Midwest Research. She estimates that the cost of the recall, which includes getting the product back, storage, loss of contracts and freight, will cost the company $9 million to $10 million. That works out to less than one cent a share, McCracken said.

Leonard Teitelbaum, an analyst at Merrill Lynch & Co., also believes the recall will not have an impact any greater than one cent. As a result, he's not adjusting his fiscal first-quarter earnings estimate for the company of 38 cents a share, versus 36 cents last year. Furthermore, in a research note Friday afternoon, Teitelbaum said only about ten percent of a product is returned in a typical recall. "Our intermediate-term and long-term strong buy rating is emphatically reinforced," wrote Teitelbaum.

Perhaps of greater concern is how the recall will impact the impending sale of ConAgra's fresh beef and pork processing business to a joint venture led by Hicks Muse Tate & Furst Inc. Midwest Research's McCracken said she talked to ConAgra and that officials said they don't expect it to affect the sale, which was announced in May and cuts ConAgra's equity interest in the fresh meat business to $150 million from more than $1 billion. ConAgra will own 46% of the joint venture.

"There is no reason to think that the deal will not go through or that the terms of the transaction will be altered," said Merrill Lynch's Teitelbaum. He expects the company to get about $800 million in cash at closing --- which is expected at the end of August.

"This recall heightens our conviction that ConAgra is better off without the red meat business, and that the company will be valued significantly higher without meat than with it," Teitelbaum said.

ConAgra did not immediately return a telephone call requesting comment.

Friday's recall announcement significantly expanded a June 30 recall of 354,200 pounds of fresh and frozen ground beef. Dan Puzo, a spokesman for the Food Safety and Inspection Services of the USDA, said 16 illnesses have been linked to the possible contamination. He said the Greeley plant in question has not been shut down, but ConAgra is checking all the products there. There has not been any positive tests        since July 11. . . . .

ConAgra's massive beef recall may be pushing restaurant stocks down Friday, but the main reason for the shares' descent is the declining market. "The stocks were down before the (ConAgra) news hit the tape," said Mitchell Speiser, analyst for Lehman Brothers Inc. The news ran on Dow Jones Newswires at 11:31 a.m. EDT. Many large restaurant chains weren't severely hurt by the recall.

Representatives from McDonald's Corp., Wendy's International Inc. , and Lone Star Steakhouse & Saloon Inc. said their companies would remain unscathed. A spokesperson from Diageo PLC , owner of Burger King, wasn't immediately available for comment.

ConAgra isn't yet able to give specific information on the meat's distribution. The company sold the meat to wholesalers, who then repackaged it and sold it to other outlets, said ConAgra spokesman Jim Herlihy on a telephone recording.

McDonald's stock fell 94 cents, or four percent, to $24.17. Diageo dropped $2.12, or five percent, to $42.91. Shares of Wendy's slumped 82 cents, or 2.4%, to $33.54.Yum Brands Inc., which operates KFC, Pizza Hut, and Taco Bell, saw its shares fall $1.03, or four percent, to $24.76. Lone Star was down $1.17, or 5.7%, to $19.18.

Analysts were more concerned with consumer spending and the state of U.S. stock indexes than the beef recall. "The market has just been abysmal," said CIBC World Markets Corp. analyst John Glass. "Eventually you have to sell your winners," he added, noting that restaurant stocks have been outperforming the market. Not that   outperforming Friday's market is a bragging point. The Dow Jones Industrial Average fell 390 points, or 4.6%, to 8019, its lowest level since October 1998.
 

CARNECO FOODS\TYSON FOODS
RECALL 131,000 PDS. OF SUSPECTED
E-COLI CONTAMINATED FROZEN BEEF PATTIES

REUTERS: A Nebraska meat plant said on Tuesday it voluntarily recalled about 131,000 pounds of frozen ground beef patties that may be contaminated with potentially deadly E.coli bacteria.

Carneco Foods, a joint venture between Arkansas-based Tyson Foods Inc. and Carneco Holdings, recalled frozen beef patties produced on February 22 at its Columbus, Nebraska plant. The company discovered the problem after being notified by its supplier that it had shipped Carneco Foods products tainted with E.coli O157:H7, said the U.S. Agriculture Department.

E.coli O157:H7 is a potentially deadly bacteria that can cause bloody diarrhea and dehydration. The company urged consumers to cook their meat at an internal temperature of 160 degrees Fahrenheit, which can kill harmful bacteria.

USDA said no illnesses have been linked to consumption of the product.

"Carneco Foods is committed to food safety and would never knowingly use suspect raw materials in its product," the company said in a statement. "Because of the date of production involved, it is likely most of the frozen beef patties have already been consumed," it added. The recalled products were distributed to retail establishments nationwide.

Sam's Club, a division of Wal-Mart Stores Inc., urged members in 32 states and Puerto Rico to return the recalled products for a full refund.

USDA said it has initiated an investigation into the shipment of the product. "I urge consumers who have purchased the suspect product not to eat it and return it to the place of purchase," said Linda Swacina, acting administrator for USDA's Food Safety and Inspection Service.

The affected frozen patties were sold under the Northern Plains brand name in six-pound bags and seven-pound and ten-pound boxes. The six-lb bags include a code of 0205321P or 02053A1P. The boxes include a production code between 20020531317 and 20020530500. Each bag or box also bears EST.245P inside the USDA seal of inspection.
 

INCREASE IN IMPORTED MPC'S SEEN
AS THREAT TO DAIRY FARMERS SURVIVAL

ROBERT SCHUBERT, EDITOR, CROPCHOICE: Joaquin Contente is a dairy farmer feeling the squeeze from cheap, imported milk protein concentrates. "This is an issue that has to be addressed in order for U.S producers to survive," says Contente, a second-generation dairy farmer in the San Joaquin Valley and president of the California Farmers Union.

The issues at hand involve the economic well being of family farmers and food safety. On a broader scale, these imports epitomize the inability or unwillingness of government to address what some see as the ongoing global push for monopoly control over much of agriculture.

To produce milk protein concentrates, better known as MPCs, take skim milk, run it through an "ultrafiltration" process, and you'll end up with a concentration of protein ranging from 40-90%.

Imports of these milk proteins surged in the second half of the 1990s in large part because U.S. officials who negotiated the General Agreement on Tariffs and Trade (GATT), codifier of the World Trade Organization, understood that industry had been using the substances to make glues and other such products, not food. So, they didn't push for tariffs or other import controls.

Subsequently, milk protein concentrates containing more than 40% "milk protein" by weight rose from 31.4 million pounds in 1996 to 116.1 million four years later. New Zealand, Australia and European countries accounted for most of that 270% increase, according to a June 2002 study at Pennsylvania State University.

Why? They're cheap.

Converting all of the imported dairy proteins into their liquid milk source would equal about five percent of the 2001 U.S. milk production, says John Bunting, as his Jersey cows graze the thick pastures of his Delhi, New York dairy farm.

"If you were to put that five percent into tractor trailers, you'd have a line stretching from Los Angeles International Airport to Eau Claire, Wisconsin," he says. The liquid milk source of the concentrates cost $7 per hundred pounds in 2001, about half the price that U.S. farmers received for blended liquid milk.

He and Contente contend that processors are substituting imported milk protein concentrates for domestic nonfat dry milk to make their cheese, butter, ice cream and other products more cheaply.

The Commodity Credit Corporation, part of the U.S. Department of Agriculture, is then obliged to buy all that domestic dry milk under the dairy price support program. Much of the powder then sits in warehouses. The concentrates have increased the cost of the support program by $572 million from 1996 to 2000.

But the loss to dairy producers is staggering, Contente says. Taking into account the value of milk used to make products such as cheese and butter and the value of Class I milk (the bottled kind), he figures that the importation of concentrates has cost dairy producers about $5 billion per year.

"All that MPCs are is a back door way of getting inexpensive imported milk proteins into the United States, which displace domestic milk, which then gets purchased by the CCC as part of the dairy price support program," says Steven Krikava, director of governmental affairs for the Land O' Lakes cooperative.

It's not just the corporate giants like Kraft, a subsidiary of Philip Morris, and Leprino Foods that use milk protein concentrates. Even the major dairy cooperatives, including Dairy Farmers of America (in control of nearly 30% of domestic milk) and Land O' Lakes are selling out the interests of their own member producers to use the imports, Contente says.

Two years ago, the Land O' Lakes board of directors learned that the cooperative had been using the imported concentrates, says Contente, one of its 6,000 members. Management's rationale: competitiveness. Although administrators said they would "try" to curtail the imports, he speculates that the cooperative is planning to use more MPCs in its cheese production. No one from Land O' Lakes management would comment on his statements.

"They seem to forget that the purpose of a co-op is to enhance the farm gate price for producers," he says. "It was founded by producers who were being taken advantage of by brokers who bought their butter cheap and then sold it high in New York and other places. Arguably, Land O' Lakes is now operating just like the brokers."

The way New York dairyman John Bunting sees it, these and other cooperatives have grown into corporate clones, always using "competitiveness" and "efficiency" to mask their desire for control.

He wonders whether the government needs to look into the possibility that DFA and Land O' Lakes are violating the Capper Volstead Act. The 1922 law allowed for, even encouraged, the formation of cooperatives as a way of giving farmers equal footing with large corporations during the agricultural depression that followed World War I. Its language stated that such associations must be "operated for the mutual benefit of the members thereof."

"But they're not being very beneficial to member dairy farmers if they go off and buy MPCs from abroad," Bunting says.

Congress is moving to address the problem, albeit too slowly for some.

In the spring of 2001, U.S. representatives and senators introduced HR 1786 and S. 847, both with very similar language calling for tariffs on imported milk protein concentrates. The bills have the support of the National Milk Producers Federation, which represents DFA, Land O' Lakes and other cooperatives and their members.

But the details and the deals are what matter.

Contente references a June 6 letter from the Federation to Rep. Phil Crane, vice-chairman of the House Ways and Means Committee. The letter concludes: " . . . we expect that the USA will pay compensation to major MPC and casein exporters in the form of additional access for these products." The latest proposal has it that a tariff would kick in when imports reach their average over the last three years, plus ten percent, he says,
chuckling.

Using that compensation formula for the years 1998 through 2000, the tariff-free quota would be 102.19 million pounds of MPCs. The actual imports in 2000 were 116.1 million pounds, up from 63.8 million in 1998. "If you're going to grant all this extra compensation in the form of additonal access for these products, then why write the law? Why waste the ink and paper," Contente wonders.

"A ceiling is better than none at all," says Chris Galen, spokesman for the National Milk Producers Federation. In order for the bills to pass Congress and head off potential challenges brought through the World Trade Organization, "we have to compensate certain foreign exporters of MPCs. We can't just unilaterally impose tariffs without expecting a challenge."

There are other ways of compensating New Zealand, Australia and the other exporters, Contente says. The authors of S. 847 suggested, Contente says, that compensation could take the form of either higher quotas for other commodities, such as kiwi fruit, or cash, or both. "Three hundred or four hundred million in cash would probably do it, if you consider that the cost of the CCC program, not to mention losses to producers, was $1 billion that we paid out in last two years. And it's all sitting in warehouses," he says.

The Food and Drug Administration does prohibit the use of the protein concentrates in "standardized cheese products," but is it enforcing its regulations? When it comes to Kraft Singles, Bunting wonders. The cheese is a standardized product, yet MPCs are listed among its ingredients.

"FDA is saying it's OK if the butcher's thumb is on the scale," says Bunting, as he references a May letter from John B. Foret, a food safety enforcement official with the FDA, to James Harsdorf, the Wisconsin state secretary of agriculture.

Foret wrote: "The Center for Food Safety and Applied Nutrition (CFSAN) establishes priorities to make the most efficient use of available resources, i.e., the `CFSAN Program Priorities.' Current priorities focus on bioterrorism, food allergens and food safety. To date the use of MPC ingredients in standardized cheese has not been highlighted for enforcement because it is not considered a food safety priority."

The federal food and drug regulator chooses what violations to go after first based on how much risk of harm they pose, says a source inside the FDA. Details about investigations are not revealed so as to avoid compromising them. That's not very convincing for Bunting, who asserts that the concentrates pose potential health risks.

"There are no standards of identity and no one knows their exact origin," he says. "Yet these products, coming from around the world, are being used in food production places." He cites a Food Technology article about possible problems with a globalizing food supply.

"The globalization of America's food supply increased substantially during the 1990s. Correspondingly, so did the risk to American consumers of acquiring a foodborne parasite. In 1990, about 13 species of parasitic animals were of concern to food scientists in the United States (Jackson, 1990). Today, that figure has multiplied by more than a factor of eight."

"The only reason to use MPCs is to make the product cheaper," Bunting says. His answer to many of the problems facing agriculture here and around the world is for each nation to realize it has a vested interest in being as self-sufficient as possible in terms of food production and distribution. That would benefit farmers, consumers and the environment.
 

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