Mike
Well-known member
Independent Packers Fight to Survive
JEFFERSON CITY, MO (April 23, 2004) – With breath held in anticipation, small packing plants across the nation exhaled sharply and explicitly when USDA denied Creekstone Farms Premium Beef from testing all of their cattle for bovine spongiform encephalopathy (BSE). Small packing plants knew this decision could potentially place them on the auction block for giant packers to snatch up for even more consolidation.
While Creekstone Farms publicly battles USDA, Gateway Beef Cooperative, a Missouri-based beef cooperative, is facing the same challenges as Creekstone. The Gateway Beef Coop's board members will send a letter to the U.S. Department of Agriculture next week requesting permission to test all of their cattle for BSE.
"It is costing us $60,000 per month based on the order we had with Japan before BSE hit. We would like to be able to test all of our cattle and reopen our market with them," said Robbie Meyer, cattle producer and president of Gateway Beef. "100 percent BSE testing could be our survival kit."
Gateway Beef's unique processing plant has drawn attention of major overseas markets. Gateway is the only prime Certified Angus Beef plant in the nation. Gateway just completed a $250,000 cooling and cutting room in their plant eight days before BSE was detected in Washington State. They had already secured orders with Japanese consumers before borders closed to US beef.
Japan was not the only overseas market paying attention to Gateway's quality prime beef. Customers in Europe want hormone-free beef and Gateway was willing to provide it. Before the case of BSE was found in the US, they were close to becoming a verified hormone-free beef plant. This verification would place them in compliance with the European Union to sell hormone-free beef to customers throughout Europe. USDA was in the process of verifying Gateway's beef producers as raising hormone-free cattle, but after December 23, a hold was placed on the verification progress.
Efforts to connect with overseas markets are now shut off completely with USDA's refusal to allow Creekstone to test all of its cattle for BSE. Even though media is focusing on Creekstone, there are other examples of small independent packers who may lose their business if exports are not opened.
"Every packer is hurting because of lost exports, but the smaller independent packer sees a larger hit percentage wise because they can't fall back on other endeavors like the four major packers can, said John Tarpoff, manager of Gateway Beef. "The four largest packers that control 80 percent of the beef market have consolidated so much that they can fall back on other commodities like pork, chicken or turkey. Smaller packers have to specialize or cater to their customers to make a profit."
Tarpoff added that consolidation will continue at a steady rate if small processors aren't allowed to test for BSE. He reiterated that small processing plants like the one he manages will have to shut down because they will lose their specialized markets.
While Creekstone has not made a decision on their next move with USDA, Meyer knows that small independent processors have to stick together to make it.
"Next week, a letter will be sent to USDA requesting permission to test all of our cattle for BSE," said Meyer. "With their previous decision, USDA is playing favors to the big packers whose cash flow is taking priority over our right to test for BSE to secure niche customers willing to pay for the test and high quality meats."
JEFFERSON CITY, MO (April 23, 2004) – With breath held in anticipation, small packing plants across the nation exhaled sharply and explicitly when USDA denied Creekstone Farms Premium Beef from testing all of their cattle for bovine spongiform encephalopathy (BSE). Small packing plants knew this decision could potentially place them on the auction block for giant packers to snatch up for even more consolidation.
While Creekstone Farms publicly battles USDA, Gateway Beef Cooperative, a Missouri-based beef cooperative, is facing the same challenges as Creekstone. The Gateway Beef Coop's board members will send a letter to the U.S. Department of Agriculture next week requesting permission to test all of their cattle for BSE.
"It is costing us $60,000 per month based on the order we had with Japan before BSE hit. We would like to be able to test all of our cattle and reopen our market with them," said Robbie Meyer, cattle producer and president of Gateway Beef. "100 percent BSE testing could be our survival kit."
Gateway Beef's unique processing plant has drawn attention of major overseas markets. Gateway is the only prime Certified Angus Beef plant in the nation. Gateway just completed a $250,000 cooling and cutting room in their plant eight days before BSE was detected in Washington State. They had already secured orders with Japanese consumers before borders closed to US beef.
Japan was not the only overseas market paying attention to Gateway's quality prime beef. Customers in Europe want hormone-free beef and Gateway was willing to provide it. Before the case of BSE was found in the US, they were close to becoming a verified hormone-free beef plant. This verification would place them in compliance with the European Union to sell hormone-free beef to customers throughout Europe. USDA was in the process of verifying Gateway's beef producers as raising hormone-free cattle, but after December 23, a hold was placed on the verification progress.
Efforts to connect with overseas markets are now shut off completely with USDA's refusal to allow Creekstone to test all of its cattle for BSE. Even though media is focusing on Creekstone, there are other examples of small independent packers who may lose their business if exports are not opened.
"Every packer is hurting because of lost exports, but the smaller independent packer sees a larger hit percentage wise because they can't fall back on other endeavors like the four major packers can, said John Tarpoff, manager of Gateway Beef. "The four largest packers that control 80 percent of the beef market have consolidated so much that they can fall back on other commodities like pork, chicken or turkey. Smaller packers have to specialize or cater to their customers to make a profit."
Tarpoff added that consolidation will continue at a steady rate if small processors aren't allowed to test for BSE. He reiterated that small processing plants like the one he manages will have to shut down because they will lose their specialized markets.
While Creekstone has not made a decision on their next move with USDA, Meyer knows that small independent processors have to stick together to make it.
"Next week, a letter will be sent to USDA requesting permission to test all of our cattle for BSE," said Meyer. "With their previous decision, USDA is playing favors to the big packers whose cash flow is taking priority over our right to test for BSE to secure niche customers willing to pay for the test and high quality meats."
