Controversy may send beef prices higher

2012-03-28T12:00:00Z 2012-12-03T15:42:33Z Controversy may send beef prices higherBy MATTHEW WILDE, matt.wilde@wcfcourier.com Waterloo Cedar Falls Courier

WATERLOO, Iowa --- The removal of most "lean, finely textured beef" from the nation's food supply will increase already escalating beef prices, experts say.

Want a hamburger? Industry analysts and food retailers said Tuesday you should be prepared to spend as much as 10 percent more to satisfy your carnivorous craving.

Beef Products Inc., based in Dakota Dunes, S.D., suspended operations Monday at three plants, including its Waterloo operation where 220 people work. Sales of LFTB, the company's main product, plunged recently after a backlash by consumers caused by negative publicity, BPI officials said.

LFTB is extracted from beef trimmings and treated with ammonium hydroxide to kill bacteria. It is deemed safe by the U.S. Department of Agriculture and has been marketed without issue for about 30 years.

But the 100-percent beef product is called "pink slime" by critics, a phrase coined by a former USDA official because of its color and texture. BPI officials say the unflattering name and misinformation in the national media and on the Internet are responsible for orders drying up. That is despite the fact no food-bourne illnesses ever have been associated with it.

Before the recent storm of negative publicity, LFTB --- 95 percent lean on average --- was in an estimated 70 percent of hamburger and other processed products nationwide. Capacity at the three closed plants was 900,000 pounds a day.

Shane Ellis, livestock economist at Iowa State University in Ames, said an extremely tight meat supply just got tighter. He estimates price hikes of 5 percent to 10 percent for many beef products, like pre-packaged frozen burgers.

"Shuttering three of four plants is pretty significant," Ellis said. "Prices will go up. Whether it's catastrophic and causes the shakes" is yet to be determined.

U.S. cattle inventory is at a 52-year low, statistics indicate. Government data show retail beef prices soared 11.5 percent last year and are expected to increase another 4 percent to 5 percent this year.

Jerry Fleagle, president of the Iowa Grocery Industry Council, agreed that the disappearance of LFTB from the food chain will push prices higher. An extra 12 to 13 pounds of beef per head is available for human consumption because of LFTB, he said.

"Prices will increase, primarily for ground beef. Not anything outrageous; it's a supply and demand thing," Fleagle said.

About a year ago, British celebrity chef Jamie Oliver devoted an episode of his television show to "pink slime" and protested on social media it was included in food without a label. Products that contain LFTB include fresh retail ground beef, low-fat hot dogs, lunch meats, pepperoni, meatballs, frozen entrees and canned foods.

Recently, ABC News and other media outlets did stories that provided inaccurate information and scared the public for no reason, BPI leaders said.

"Our employees and our local communities deserve better treatment than we received from the national media," said Eldon Roth, BPI president and CEO, in a statement.

Major restaurant and supermarket chains quit buying LFTB due to public concern, including Hy-Vee.

Chris Fernau, assistant meat department manager at Hy-Vee's Crossroads Center store in Waterloo, said Ellis and Fleagle's estimates are accurate.

Hy-Vee used to buy hamburger containing LFTB. Fernau said once supplies already purchased are sold, the store will make its own fresh hamburger from chuck and arm roasts and other cuts.

"Now we have to pay someone to do it (trim fat and grind)," he added. "It will take more time and have a shorter shelf life."

Trunck's Country Foods in Reinbeck and Dysart never sold fresh products with LFTB, but owner Darren Trunck still expects prices to increase because of the hiccup in the supply chain.

"With the shortage, it will roll over to other products," he said.

Copyright 2015 Waterloo Cedar Falls Courier. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(3) Comments

  1. Missyb
    Report Abuse
    Missyb - March 30, 2012 11:37 am
    The media sure has a way of promoting big business. This is just a scare tactic once again.
    This product contains ammonia. AMMONIA people!
  2. slipstream
    Report Abuse
    slipstream - March 28, 2012 3:07 pm
    Quit the scare tactics about higher beef prices already. Obviously the workers and unions are desperate. I'd rather pay more for quality, but what you're implying ain't gonna happen. Even if it did, I'd buy more pork chops and chicken breasts.
  3. breeze
    Report Abuse
    breeze - March 28, 2012 2:26 pm
    Quit buying beef and see how high they rise...
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