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DAVID KRUSE

By Staff | Apr 13, 2012

I will admit that I was a bit slow to recognize the implications of the “pink sliming” media sensationalism of a beef product that is included in ground beef.

Tyson says that it has hurt beef demand so we will believe them. The industry calls this product LFTB which is the acronym for “lean finely textured beef.”

There is no such thing as pink slime.

The product is 100 percent beef processed from 50-50 beef trim to remove some of the fat. By doing so, they can offer consumers a leaner product. It is used in about 70 percent of ground beef consumed. Without LFTB there would be a shortage of 90 percent-plus lean product and lean hamburger prices will go up.

Hamburger product processor ABA Foods filed chapter 11 bankruptcy as its customers stopped buying its products as a result of the LFTB smear. The company provided meat to supermarket and fast food chains like Super-Valu and Burger King. More bankruptcies would be expected.

There is a huge injustice in all of this because these companies did absolutely nothing wrong. They produced a wholesome product that added value to the beef industry that flowed through to producers and because some news network decided that they could turn this into some kind of scoop for ratings, they damaged the industry and consumers. The only winner would be ABC News and Australian beef producers as they replace the product being lost.

LFTB is processed using ammonium hydroxide. “Ammonia, in the form of ammonium hydroxide, is naturally found in beef, other proteins and virtually all foods. It is widely used in the processing of numerous foods, such as baked goods, cheeses, gelatins, chocolate, caramels and puddings. The process removes the fat from the meat, resulting in a 94 percent to 97 percent lean beef. Ammonium hydroxide is found naturally in all proteins we eat – plant or animal – and one of its roles is to prohibit bacteria from forming.”

The irony is that LFTB added to food safety. Diane Sawyer was just the mouthpiece reading what came across the teleprompter. It was the network’s news division that decides what the news is. LFTB is not an additive. It is 100 percent beef. The reality of a smear like this is that after the damage is done and misconceptions are seated, the facts don’t really matter.

Retailers, super-markets and restaurant chains ran away from the product like a bunch of scared children. Several companies asked USDA for permission to label ground beef with LFTB in it. As LFTB is not an additive it puts USDA in an awkward position. Beef is beef. The package can say that it contains lean beef derived from beef trimmings, but technically that is where all ground beef comes from. There will be a lot more packages of ground beef labeled that it contains product from a foreign country as a result. If the package was just labeled 100 percent beef it would cover it.

What they should do, but won’t, is offer hamburger with LFTB included at a 15 percent lower price than hamburger without it, along with a beefisbeef.com fact sheet. Taking LFTB from the ground beef supply chain will increase the cost to consumers 10 percent to 15 percent.

Iowa Gov. Terry Branstad wants Congress to hold a hearing on the smear job that turned good beef into pink slime. That might create some positive pushback, but that won’t fix this. If news networks don’t want to practice responsible journalism they have the first amendment to hide behind.

British Chef Jamie Oliver railed against the product. The British are more used to tabloid journalism than is the American public, so Americans didn’t know not to take him seriously. Once scorned and food companies have made their decision, they will look foolish if they changed right back because they were foolish to have validated the smear with their actions.

This is not like finding a food borne pathogen or some other food safety issue at a ground beef plant. In those instances the companies deserved the ramifications that befell them.

In this instance BPI was producing a healthful product that was adding value to the beef industry and cattle producers and the entire beef industry gets screwed. Nobody deserved this.

Food industry analysts said that the damage is done and I believe them. It is too bad that this put meat companies that did nothing wrong out of business, reduced the value of U.S. cattle damaging producers and will cost consumers more for hamburger for absolutely no justifiable reason than network ratings. Is this really how stupid this country has become to allow and accept this? The beef industry has a reason to be frustrated and grudgeful.

The LFTB issue came at an unfortunate time when retailers had decided to stop buying beef, rejecting the price. They made the choice to stop buying beef rather than price it higher where it had to go to consumers to be able to maintain their margin.

The industry took a hit in March but May is Beef Month is still ahead and retailers have gotten what they want – lower beef prices.

The overall bullish supply fundamentals are still intact. The news cycle will move onto the next sensational story and after thoughtful reassessment beef buyers will decide that LFTB included in hamburger is a good thing.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

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