July 26, 2002   #177
Monitoring Corporate Agribusiness
From a Public Interest Perspective

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JUDITH GRAHAM, CHCAGO TRIBUNE: The government was warned in February about possible E. coli contamination at a Colorado meat processing plant, and even though two U.S. inspectors recommended an investigation, none occurred, documents released Monday showed.

About 19 million pounds of meat from ConAgra Beef Co's plant in Greeley, Colorado, was recalled last week and as of Monday, 25 people in six states had been sickened by the E. coli outbreak traced to the plant. Six of those people were ill enough to require hospital care.

The Agriculture Department's response to the warnings raises troubling questions, including whether the latest outbreak of E. coli infections could have been prevented if the agency had been more aggressive. A related issue is whether the meat recall, the second-largest in history, could have been avoided if more caution had been exercised.

In the wake of a public outcry, ConAgra announced several measures designed to enhance food safety, including more training for plant workers and much more extensive testing for E. coli at all its plants, including facilities in Idaho, Nebraska, Texas and Utah.

Information about early warnings of potential contamination at ConAgra's Greeley plant was supplied by John Munsell, owner of Montana Quality Foods and Processing of Miles City, Montana, whose family-owned business has been operating since 1946. He said the government has been persecuting him for raising alarms about possible safety violations. Government officials said they were unable to substantiate his allegations.

At issue is what happened after samples of ground beef processed at Munsell's eastern Montana plant tested positive for E. coli bacterium on February 19, 20 and 21. Munsell said he discovered all the meat was supplied by ConAgra's plant in Greeley. He said documents indicated that the meat had been processed on the same day and came from the same batch.

By Februnary 25, Munsell had written to the USDA's district office in Minneapolis, warning that if more infected meat remained in circulation public health could suffer a "tremendous adverse effect" and urging officials to take prompt action. While he didn't name ConAgra directly, he noted that USDA inspectors in Montana knew which company had supplied him with the tainted meat and offered to give the information to government officials.

Two days later, USDA inspectors Ronald Irvine and Daryl Burden wrote to the Minneapolis USDA office, urging an investigation of the source of the contaminated ground beef. Their review of the three E. coli samples "strongly suggests a common source of the contaminant: coarse ground product of a single identified lot received from Est 969," the letter said.

Coarse ground refers to meat that is ground once coarsely, before being ground again more finely by an establishment like Montana Quality Foods and then distributed. "Est 969" is a reference to the ConAgra Greeley plant. The officials suggested "a follow-up investigation at the source of the product considering the serious public health implications."

Steven Cohen, a spokesman for the USDA's Food Safety and Inspection Service, said: "You have a letter signed by two people. It sounds like it's more of an opinion" than a finding of fact.

The food safety agency believes Munsell mixed meat from his own slaughterhouse with the meat from ConAgra, making it impossible to know where the E. coli came from. Munsell adamantly denies any product from his slaughterhouse was used in the ground beef.

The USDA tried to get a "clean sample" of the meat from ConAgra, Cohen said, but couldn't do so because it had been processed and frozen in August and no other intact samples were available. Because there was no solid evidence indicating contamination at the ConAgra facility, Cohen said, officials took no further action.

"At the very least, this was forfeiting an opportunity to follow a very significant scientific lead," said Felicia Nester, food safety project director at the Government Accountability Project, an advocacy group. "It makes no sense when you have a lead like this to omit looking into the problem. I have never seen such clear evidence of the USDA ignoring
inspectors trying to do the right thing."

E. coli began showing up in sample tests at the ConAgra Greeley plant with greater frequency than usual only a few months later. Between April 12 and July 11, some 28 lots of meat produced on as many days were discovered to be infected with the bacterium, which can cause severe stomach cramps, bloody diarrhea and kidney failure.

When this kind of contamination occurs, onsite USDA inspectors are responsible for certifying that none of the meat from those lots is distributed. These inspections occurred as required, Cohen said. But the system is far from fail-proof. Infected meat processed May 31 at the ConAgra plant was released, prompting the current E. coli outbreak. And this month, after a USDA team launched an in-depth review at the facility, the officials determined they could not be sure all contamination had been contained, Cohen said. That's when the recall was expanded to 19 million pounds of fresh and frozen ground beef.

"E. coli is a challenge for the entire industry, and we're very intent on learning and fixing what happened here," said Jim Herlihy, ConAgra spokesman.


DIANE CARMEN, DENVER POST COLUMNIST: If 19 million pounds of meat distributed to half of this country had been contaminated with a deadly strain of E. coli bacteria by terrorists, we'd go nuts. But when it's done by a Fortune 100 corporation, we continue to buy it and feed it to our kids.

As children are weaned from dialysis, joining others recovering from eating ground beef contaminated with feces, the rest of us are ready to return to business as usual from the meat industry.

Be sure to cook those burgers well, we remind each other. Well-done burgers won't give you renal failure despite the traces of manure.

Consumers, like cattle being led to the slaughter, barely twitch when the corporate machine that controls our food supply ships another load of tainted meat. We've come to expect it. We actually blame ourselves for not sterilizing our meat thermometers every time we check to see if the fecal contaminants are done.

Meanwhile, we pay no attention when the industry eliminates another safeguard. Faster meat disassembly lines, fewer poorly paid workers, fewer inspectors, more mechanized processing --- they're all designed with profits, not consumers, in mind.

It's no wonder that federal officials count 61 deaths and 73,000 cases of E. coli 0157:H7 poisoning in the U.S. every year. By comparison, it took only a handful of cases of the human form of mad cow disease to shut down the beef industry for three years in Great Britain, where consumers fought back.

Kathy Kelley, a cattle rancher near Meeker, is exasperated with "lazy" American consumers who don't have a clue about the source of their food, much less the shame-less exploitation of humans, animals and the environment involved in its production.

Kelley doesn't think of the 19 million pounds of recalled beef as mere hamburger but as tons of costly feed, acre-feet of scarce water, years of work by ranchers and thousands of head of cattle slaughtered --- and wasted --- all because of an inherently filthy system.

"There is no reason for people in this country to have E. coli poisoning," she said. "It's entirely a byproduct of industrial meat processing."

"They hire economic refugees, exploit unskilled workers, steal the meat from the suppliers and endanger the lives of the consumers," said another angry cattleman, Mike Callicrate of St. Francis, Kansas. Ranchers are getting "the lowest share of the consumer's meat dollar in history," while consumers are "paying the highest prices in history for the dirtiest product since 1906 when Upton Sinclair wrote The Jungle. " Callicrate said.

The free market system has collapsed. While drought-stressed ranchers sell off herds for a fraction of their value, meat prices remain unmoved. Deliberately inadequate labeling thwarts consumers from making informed choices. Information about what country the animal is from or the packing plant that processed it is withheld, and measures to require those details repeatedly have been defeated in the legislature, at the urging of the meat

They don't want us to know.

Then, to protect the corporation from litigation, we're reminded once again to be sure to cook the living, well, manure out of it. They freely admit it's the only way we can be sure the product they're selling won't kill us.

Diane Carman's commentaries appear Tuesday, Thursday and Sunday in the Denver Post.


NOEL PETRIE, PUBL:IC CITIZEN: Public Citizen and the Government Accountability Project called yesterday for a congressional investigation into the events that led to the recall of 19 million pounds of meat processed by ConAgra at its Greeley, Colorado, plant and into the manner in which the U.S. Department of Agriculture (USDA) has implemented a new meat inspection program.

The groups cited extensive e-mail evidence showing that top USDA officials were told in February that E. coli-contaminated meat was being produced at the ConAgra plant, but those officials chose to ignore the warnings. The USDA and ConAgra negotiated a voluntary recall on June 30 and another, much larger recall last week. The groups called for the investigation in letters to the chairs of the House and Senate Agriculture committees and the House Government Reform and Senate Government Affairs committees. The letter went to Sens. Tom Harkin (Dem.-Iowa) and Joseph Lieberman (Dem.-Connecticut), and Reps. Larry Combest (Rep.-Texas) and Dan Burton (Rep.-Indiana).

"It's time for the Congress to take a good, hard look into USDA food safety policies and how they are implemented," said Wenonah Hauter, director of Public Citizen's Critical Mass Energy and Environment Program. "The ConAgra recall is not an aberration.  It is another example of a food safety system that is teetering on the brink of collapse."

The groups criticized the way the USDA is implementing its Hazard Analysis Critical Control Point (HACCP) program, in which meat plants are responsible for the inspection process and for determining where in their production system hazards are most likely to occur and controlling them. Government inspectors have little authority to require corrective action when they see a problem.

The e-mail evidence shows that earlier this year, USDA inspectors determined through documentation and microbial testing that the Greeley plant was the likely source of contamination found at a much smaller meat processing plant.  USDA's top brass not only ignored the inspectors' recommendations that the agency take action, but also chastised them for documenting their conclusions.

"Unfortunately, it's a complaint we have heard all too often from our whistleblowers," said Felicia Nestor, food safety project director for the Government Accountability Project.  "Like a collective recurring nightmare, the inspectors find problems, call Washington for help and then must stand silently by as administrators allow problem plants to operate without interruption.  Commenters who blame the inspectors for inaction are really missing the mark on who really wields the authority at USDA."

The two groups stated in their letter that they were supporters of the HACCP when first introduced because it was designed to add scientific testing to the food safety inspection system.  In practice, both internal and external examinations of the implementation of HAACP by USDA have discovered major flaws.

An investigation conducted in 2000 by the USDA's inspector general concluded that the public's health was being jeopardized by the manner in which HAACP was being implemented. Just recently, a draft report by Congress' own investigative arm, the General Accounting Office, severely criticized the USDA for its implementation of HAACP.

In addition, GAP and Public Citizen have found that the USDA is not enforcing its own pathogen performance standards for the meat industry and is permitting meat processors who continually fail those performance standards to continue to operate.  The findings were detailed in a report issued in May called  "Hamburger Hell: The Flip Side of USDA's Salmonella Testing Program." This report is available at:

"It's not good enough to say that your food safety system is based on science when you don't use it," said Hauter.


DANE HAMILTON, REUTERS COMPANY NEWS: Buyout firm Hicks Muse Tate & Furst said on Tuesday it was fully committed to its proposed $1.4 billion purchase of ConAgra Foods Inc.'s fresh meats division, but ConAgra's huge recall of ground beef would delay completion of the deal.

ConAgra launched a recall of nearly 19 million pounds of ground beef last Friday, prompting speculation that Dallas-based Hicks Muse might seek to back out of the deal announced on May 21.

The transaction was previously expected to close in August. A spokesman declined to specify the length of the delay or to say whether the terms of the deal might change. Separately, a ConAgra spokesman said the company received clearance for the deal from U.S. and Australian antitrust authorities. ConAgra shares were up 72 cents or 3.2 percent at $22.65 in late afternoon trading on the New York Stock Exchange.

"We believe that taking a brief pause in the transaction process is the right decision, enabling ConAgra beef management time to focus on successfully executing the product recall and to address their customers' needs," said Roy Winnick, a Hicks Muse spokesman.

ConAgra, the second-biggest supplier of food and meat after Kraft Foods Inc.., launched the second-biggest U.S. recall of ground beef after the U.S. Agriculture Department said the meat might be contaminated by E.coli bacteria.


REUTERS: ConAgra Foods Inc.'s recall of 19 million pounds of hamburger, which the Agriculture Department said is linked to possible E. coli bacteria illnesses among 22 people, could pose a risk to the sale of its fresh meat operations later this year, analysts said [last] Friday.

"ConAgra really wants to get rid of this thing," said David Nelson, an analyst with Credit Suisse First Boston. "Sometimes we see things like this get renegotiated."

ConAgra agreed in May to sell off more than half of its fresh beef and pork processing operations to an investor group led by private equity firm Hicks Muse Tate & Furst. The deal, valued at about $1.4 billion, is scheduled to close in August. Representatives of ConAgra and Hicks Muse did not return calls seeking comment. Merrill Lynch analyst Leonard Teitelbaum said he believes the deal will go forward and noted that no retailers have severed their relationships with ConAgra.

But some analysts said the value of the sale could go lower if Hicks Muse forces ConAgra back to the bargaining table under a stipulation in merger agreements known as a "material adverse change" clause. The clause gives the buyer the ability to renegotiate or walk away from a deal in the wake of unexpected events.

Tyson Foods Inc. used such an argument last year to try to back out of its deal to buy beef processor IBP Inc. after accounting irregularities surfaced at an IBP unit. After a court battle, a federal judge sided with IBP, and the deal went ahead after a long delay.

But the recall represents only a fraction of ConAgra's meat operations, said Christine McCracken, an analyst with Midwest Research, who estimates the recall will cost the firm $9 million to $10 million. "They are very confident it won't force a renegotiation of terms," said McCracken. "But there's always a risk."

ConAgra's planned sale of 54% of its fresh meat business is valued at about five times cash earnings, analysts said. That compares with about 12 times cash earnings for deals in the packaged foods industry. Analysts believe the low valuation was necessary to unload a business that had held back earnings for years.

ConAgra agreed to voluntarily expand a June recall of hamburger meat that is potentially tainted with a strain of the harmful E. coli bacteria. It is the second-largest ground beef recall in history. In 1997, Hudson Foods recalled 25 million pounds after 15 people in Colorado fell ill. After a subsequent recall, the company's financial condition weakened and it was bought out by Tyson a year later.


GREG WINTER, NEW YORK TIMES: Running afoul of federal inspectors as they pick their way through meat plants is far from unheard of at ConAgra Foods Inc., one of the world's largest food companies.

In the last year alone, the Department of Agriculture has briefly halted work in two ConAgra plants because of health violations, and has threatened to do so at least a half-dozen other times unless the company pays more attention to its own food safety plans.Another ConAgra plant had the highest rate of salmonella among all the turkey processors tested by the department last year, with nearly half its birds showing some contamination, according to government records.

And the Colorado plant where a ConAgra subsidiary, the ConAgra Beef Company, processed the 19 million pounds of beef recalled [last Friday] had been cited almost ten times in the last three years, for violating safety codes intended to protect workers in dangerous settings, records of the Occupational Safety and Health Administration show.

Though the new recall is the second-largest ever for meat, ConAgra is hardly at the extreme of the industry. In fact, it is regarded as something of a leader in food safety by public health advocates, who argue that the real danger lies in the shortcomings of federal regulation.

"This outbreak shows a failure of the USDA. to recognize the problem until it was too late," said Caroline Smith DeWaal, food safety director at the Center for Science in the Public Interest, referring to 19 people whose illnesses apparently resulted from eating the tainted beef. "The whole point of meat safety regulation is to prevent these problems before they turn into massive recalls."

A draft report by the General Accounting Office, Congress's investigative arm, has found that inspections by the Agriculture Department are deeply flawed, both in design and in execution. Months often pass after plants fail contamination tests before the department steps in to investigate the problem, the report found. Further, it said, penalties are often too light to force compliance.

The consequences, some public health advocates argue, show clearly in the department's own statistics: contamination rates for salmonella and E. coli both increased from 2000 to 2001.

Though the recall announced [last Friday] was admittedly large, ConAgra said it had not previously had to pull back any beef for E. coli contamination in at least five years and that before then, such troubles were small. Further, while recalls of the company's other products are not uncommon, including those of 6,300 pounds of Chef Boyardee ravioli and roughly 400,000 pounds of soup, both this year, they are more often due to labeling mistakes than to bacterial contamination.

Still, the beef recall comes at an especially awkward time for ConAgra, which is in the midst of spinning off most of its fresh-beef and pork processing business, for $1.4 billion. Hicks, Muse, Tate & Furst, the investment group leading the purchase, declined to comment on whether the deal would be affected, but the recall could serve as leverage in further wrangling over price.

The effects of a major recall are often unpredictable, bringing near ruin for some companies and few consequences for others.

In mid-August 1997, Hudson Foods began what seemed like a modest recall of 20,000 pounds of frozen hamburger patties because of the possibility of E. coli tainting. Within two weeks, that recall had mushroomed to 25 million pounds, causing the company to lose its biggest customer, Burger King. Reeling from the crisis, Hudson was swallowed up by Tyson Foods by the Labor Day weekend.

On the other hand, Sara Lee, having pleaded guilty to selling Listeria-tainted meat that appears to have caused 15 deaths and six miscarriages in 1998, was virtually unharmed. In a settlement with federal prosecutors last year, the company paid $4.4 million in fines and a contribution to food safety research, a figure that consumer groups derided as a pittance for a company whose 2001 sales totaled $17.7 billion.


RALEIGH NEWS & OBSERVER: Smithfield Packing Co. is voluntarily recalling 19,800 pounds of pork neckbones that may be contaminated with plastic, the U.S. Agriculture Department said Saturday. The company, whose Bladen County slaughterhouse is one of the world's largest, discovered the problem.

"Because of the potential for injury, we want consumers to be aware of the recall," said William J. Hudnall of the USDA's Food Safety and Inspection Service in Washington. "We urge consumers to return the product to the point of purchase."

No injuries have been reported, the food safety service said.

The products being recalled were sold in two to four-pound styrofoam trays of "Premium Smithfield Pork, Pork Neckbones." The side of each tray bears a ten-digit code starting 1962, 1972 or 1982 and the establishment code "EST.18979."

The neckbones were produced between July 15 and July 17 and distributed to retail stores and military commissaries in Alabama, the District of Columbia, Florida, Georgia, Maine, Mississippi, North Carolina, New York, Pennsylvania, South Carolina and Virginia.

Questions about the recall were being directed to Smithfield Packing at 877-933-4625.


ANN RUNDLE, VICTORIA [TEXAS] ADVOCATE: Eight years ago Kenneth Schauer got a loan for $260,000 to build two new turkey houses in Gonzales County. To get the money, he borrowed against 60 acres of land that had been in his wife's family since the early 1900s.

Today he owes $160,000 on the houses, which measure 600 feet long by 50 feet wide, and with Cargill Inc.'s announcement in May that it will not renew any of its contracts with turkey growers in the county, Schauer is not sure where he's going to get the money to pay off the loan.

"There is a possibility that we will have to sell some of the land to pay off this note that we have," his wife Gail Schauer said, explaining that they live in her grandfather's house, which she inherited in the early 1970s. "It's a place that the family has always congregated and still does congregate. It's special to me," she said.

The Schauers are two of about 50 turkey growers in Gonzales, Lavaca and Caldwell counties that have filed a lawsuit against Cargill claiming that the company drove them out of business by making false statements to encourage them to spend more money and then unlawfully terminated their contracts, according to David Burrow, a Houston attorney. "I think when all the evidence is obtained and it's all on the table, my personal feeling is that they knew they were going to pull out, and they didn't tell them," said Burrow, who is representing the turkey growers. "In fact, they told them just the opposite. The people representing Cargill kept trying to get them to invest more
money and buy more things," he said.

Patricia May, director of public relations for Cargill Turkey Products, said Tuesday that the company has not seen the lawsuit. "We are unable to comment on it at this time," she said.

Also named in the lawsuit, which was filed in district court in Gonzales County, are Cargill Inc.-Turkey Products, Plantation Foods Inc., Agri-Bedding Supplies Inc., Agri-Wood Products Inc., Mida Bio Products & Services Ltd., Mida Farms LLC, Heritage Dedicated Services Inc., Mike Neal and Ira Brister.

The suit alleges breech of contract, common law fraud and violations of the 1983 Texas anti-trust act, Burrow said. Monetary damages are being sought by each of the plaintiffs, he said. "It's too early to calculate the damages of these cases right now," Burrow said. Schauer said he never would have risked the family land if he had any indication that the turkey growing business would end in South Texas before the 15-year loan was paid off. He said Plantation Foods Inc., which sold 100% of its stock to Cargill in 1998, was "very encouraging."

"They encouraged all the people here in Gonzales to expand for them, and at that time, gave no indication that it would not be a long-term relationship," Schauer said. And even when Cargill took over four years ago, "they indicated as long as we did a good job down with our cost and our productivity, they would continue to grow turkeys down here." Schauer said his contract runs out in October and then "that's it."

His wife is working a part-time job now, but eventually will need to find a full-time job. And, Schauer said, "we are to the point where we are trying to figure out what in the world we are going to do with these humongous houses that were built especially for turkeys that don't suit any other type of business, really."

Burrow said each of the plaintiffs he represents has a different story to tell, depending upon how they made investments and how many turkey houses they have. "But they have one common thing," Burrow said, "I think they all have been defrauded, frankly."


"The most extraordinary aspect of the national furor over The Jungle, with its international repercussions, was that public attention was concentrated almost exclusively upon material regard by Sinclair as incidental, mere background and local color for his major theme which was the oppression of the Packinghouse workers."
--- "Afterword," by Robert Downs, The Jungle by Upton Sinclair, Signet Classic, N.Y.,N.Y.: 1906.

While seeking to show the miserable and unsafe working conditions  of packinghouse workers in the early part of the 20th century Upon Sinclair also revealed in his classic The Jungle how unsafe and contaminated the meat was that was being processed in those packinghouses. The public reaction was instantaneous and the U.S. Congress moving at warp speed for that body enacted within the year the Food and Drug Administration (FDA).

When Sinclair was later questioned about the public reaction to his book he wrote in keen disappointment, "I aimed at the public's heart and by accident I hit it in the stomach."

Unfortunately, nearly 100 years later the consuming public seems to have neither the heart nor the stomach to aim at !!!


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