May 7, 2004

 

 

US Meatpackers Divided Over Mad Cow Tests

 

Kentucky's Creekstone Farms expects to receive an answer from the U.S. Department of Agriculture within the next week about its latest request to voluntarily test its cattle for mad cow disease so it can resume beef shipments to Japan.

 

Creekstone, which raises and sells Black Angus in Campbellsburg, Ky., and slaughters them in Kansas, argues that Japanese consumers won't buy its beef without assurances that the cattle are free of the brain-wasting disease linked to a similar ailment in humans.

 

But last month the USDA denied the premium beef producer a license to test every animal. A report commissioned by the government says that testing all cattle killed for human consumption is "unjustified in terms of protecting human and animal health."

 

Creekstone's crusade is dividing American cattlemen over a bigger free-enterprise question: Should the government allow a private company to test cattle to satisfy its customers even if the outcome might mean higher costs for small and large farmers in the long run?

 

Creekstone invested $500,000 to build a testing laboratory at its Arkansas City, Kan., processing plant and hired seven employees to run the lab. Creekstone is ready to begin testing and has also asked the USDA for permission to ship brain stem samples to Japan for independent tests.

 

The company says customers have agreed to absorb the testing costs.

 

Before the first - and only - case of mad cow disease in the United States was announced in December, Creekstone exported 30 percent of its beef; about half went to Asian markets, said Bill Fielding, Creekstone's chief operating officer.

 

"Japan is a perfect customer," Fielding said. "So it hurt us probably more than most any other packer. It's just very, very significant."

 

Fielding estimates that Creek-stone immediately lost $80,000 to $100,000 a day shortly after the mad-cow scare. The company has since gained new customers in the United States, but Fielding said it is losing more than $200,000 a day in revenues without access to the closed markets.

 

"For two months it was day to day and very critical. Right now we have gotten through the worst part of this," Fielding said. "The whole group of people here have really pulled together. Right now our belief is we're going to make it through this and we're going to end up being stronger."

 

Others are following suit. The Gateway Beef Cooperative in St. Louis, representing 59 Missouri and Illinois farmers, expects to file a similar request with the USDA.

 

Gateway Beef manager John Tarpoff said the co-op has a Japanese customer willing to pay for mad-cow testing and could make as much as $60,000 a week in beef sales abroad.

 

Tarpoff does not believe all American beef should be tested but said small processors like Creek-stone and Gateway should be allowed to test if it's necessary to re-enter the Japanese market.

 

"The people from Washington kind of took the position that Creekstone was a one and only," Tarpoff said. "That's not the case. I mean, as far as I'm concerned, more power to them. I'm right there, right behind them.

 

"If Creekstone was permitted to start testing and if we were permitted to start testing, I'm sure other packers would be wanting to do that too."

 

Some beef industry groups fear that allowing a few companies to test every animal might prompt trade partners to request that all U.S. exports be tested, a move that could be costly for cattlemen and result in higher prices for consumers.

 

The National Cattlemen's Beef Association continues to oppose private testing, citing the safeguards established over the past 15 years to protect U.S. food from mad cow disease, formally known as bovine spongiform encephalopathy (BSE).

 

Those measures include the removal of certain cattle parts from the food supply, a ban on certain cattle feeds that could spread the disease and a new surveillance system announced by the USDA in March that will target the highest-risk cattle population and include a random sample of animals.

 

In a statement issued last month, national cattlemen's association President Jan Lyons said the private-testing debate undermines consumer confidence in beef and disrupts talks on reopening the beef trade.

 

"Allowing private companies to use testing as a 'marketing' tool before the government first establishes the framework ... will place undue costs on cattlemen without producing additional protections for consumers," Lyons said.

 

U.S. and Japanese officials met last month in Japan and announced that a decision on resuming beef exports to Japan is expected by the end of summer. Private testing was discussed, but "we didn't go anywhere with that," said J.B. Penn, undersecretary for farm and foreign agricultural services.

 

After the USDA refused Creekstone's testing request, The Associated Press quoted Japanese Vice Agriculture Minister Mamoru Ishihara as saying: "The U.S. government's decision not to accept the company's offer is, frankly speaking, regrettable."

 

James Hodges, president of the American Meat Institute Foundation, a trade group that includes Creekstone, said the group supports a strong surveillance program but questions Creekstone's request.

 

"Testing for food safety purposes has no tangible benefit because the safety of the product is assured by removing the potentially infectious material, or the so-called specified risk materials," Hodges said.

 

Creekstone, the brainchild of Chicago businessman and Western Kentucky University graduate John Stewart, launched its brand of premium beef in 1999. As part of its producer network, the company sells purebred bulls to other farms, then buys the offspring and sends them to feedlots in the West to be fattened.

 

Joe Meng, director of genetic development at Creekstone's 1,200-acre Henry County farm, said visitors from Japan, South Korea and China have toured the Kentucky farm to inspect how the cattle are raised.

 

"Particularly with a country like Japan, which imports the majority of their protein, they're much more concerned about how the cattle were produced."

 

The Consumer Federation of America is supporting Creekstone, as is the alternative nonprofit cattlemen's group R-CALF, which represents 9,000 cattle producers in 46 states.

 

Bill Bullard, chief executive of R-CALF, believes that if select mad-cow tests were to prove the safety of American beef, customers would likely withdraw their testing demands.

 

"By accommodating customer requests for testing, we will simultaneously have more scientific evidence as to the prevalence of BSE," Bullard said. "At this point ... our industry has had not a single case of BSE in a native animal, and we believe that this level of testing would be temporary."