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USDA INSPECTION--Comparative Advantages

Econ101

Well-known member
This thread is meant to shed light on the Issue Ben Roberts brought up on USDA INSPECTED MEAT.

Please keep all posting on this thread relevant to the topic. Articles and facts surrounding this topic are encouraged.

Ben Roberts:
In 1905, Uption Sinclair wrote a novel titled The Jungle. In writing his novel Upton Sinclair also exposed the unsanitary conditions that existed in the large meat packing plants of Swift, Armour and Morris.

When the public read this novel, the consumption of meat fell dramatically. The packers had to do something very quickly to convince the public that their products were safe and wholesome. Influenced by the packers, President Theodore Roosevelt contacted Uption Sinclair and ask him to write a report about the conditions that existed in Chicago. In closing his seven page report to the President, Uption Sinclair said:

" I might add that when I was in Chicago, I learned a good deal about the connections which the packers have in Washington, so I think it most likly that before the Department of Agriculture got anybody started for the purpose of investigating Packingtown, word had been sent there to the packinghouses that things should be cleaned up. I know positively that this was done in the case of Major Seaman, who went out there for Collier's Weekly."

Little did Uption Sinclair know that the influence of the big packers went all the way to the President of the United States.

President Roosevelt concluded, "Who knows the meatpacking business better than the meatpackers?" He ask the big packers to help write the new meat inspection laws.

The big packers then came up with a way to convince the public that their meat products were pure and wholesome. The Meat Inspection Act was passed on June 30th of 1906, which was the last day of the fiscal year, so it was sure to pass without opposition. The Meat Inspection Act was written by the big packers. It should be remembered, however, that Federal jurisdiction is limited to interstate and foreign commerce, and that this inspection can only be legally applied to establishments doing interstate and foreign business. But the Federal inspection does not and can not reach the establishments doing business exclusively within the state. Such packing plants must be looked after by the state and municipal authorities. In the absence of an efficient local inspection, consumers were urged to look for meat bearing the Government label. At that time Swift, Armour, Morris and Cudahy were the only packing firms that were doing interstate and foreign business. So it was only their products that had the Government's stamp that insured the public that their products were pure and wholesome.

The packers backed the Meat Inspection Act, which they had written, for marketing reasons. J.O. Armour said" The Meat Inspection Act was the greatest form of advertisement the meat packers ever had." They knew that if the U.S. Government stamped their approval on meat products the public would except that as good.

The big packers even paid the inspectors' wages for two years. After the public overwhelmingly accepted the USDA Inspected stamp of approval on meat products, the big packers then said they would no longer pay the government employees wages, thus letting the government bear the expense of marketing the meat packer's products.

Now where is the fraud, or is it only fraud depending on who is doing it?

Ben Roberts
 

Econ101

Well-known member
The New Rules Project - Designing Rules As If Community Matters



The Journal of the New Rules Project - Winter 2001

State Inspections Revive Local Markets

After years of suffering heavy hits from industry consolidation and low prices, small livestock farmers and independent meat processors are getting a second chance through a long-forgotten policy. The recent resurrection of state meat inspection programs has given farmers the opportunity to market their own meat and is increasing business for small processors.
By Brian Levy

In the past 30 years, the meat packing industry has been shifting to ever-larger processing plants located in a shrinking number of counties that have huge livestock production enterprises. As a result, the industry is roughly ten times more concentrated geographically today than in the early 1960s. From 1976 to 1996, the number of federally inspected plants processing beef fell by more than half, from 1,665 to 812.(1) In 1997 the 14 largest of these plants (those with 1 million head of annual capacity or more) processed 63 percent of the steers and heifers in the U.S.(2)

Only the largest cattle slaughter plants - those that slaughtered more than 500,000 head annually - increased in number during the 1980s. Plants that slaughtered between 10,000 head and 100,000 head annually declined in number by 65 percent between 1980 and 1990, while plants that slaughtered fewer than 10,000 head annually declined in number by 44 percent.(3) This concentration of processing capacity has coincided with an even more severe concentration of ownership. Today, four firms process 81 percent of all steer and heifers, up from 36 percent in 1980.

Similar trends exist in hog processing. The number of federally inspected hog slaughter plants fell from 1,322 in 1976 to 770 in 1996. In 1995, the largest 33 of these plants processed over 87 percent of the hogs in the U.S. One Smithfield plant can process 32,000 hogs a day or more than 10 million a year. Nationally, the top four hog processors now handle over 50 percent of U.S. hogs. In the Southeast, Southwest and West, the four largest firms slaughtered more than 90 percent of the total federally inspected hogs in 1997.(4)

Gary Benjamin, vice president of the Federal Reserve Bank of Chicago, offers a glimpse of a possible future, "some 50 producers could account for all the hogs needed in the United States . . . fewer than 12 plants could process all of the country's hogs."(5)

Lacking alternative markets, small livestock farmers must sell to ever-larger and ever-fewer packing facilities. Fewer customers mean a lower take-it-or-leave-it price. Many of the packers own their own livestock or have contracts with large suppliers, which means the small producer stands at the back of the line. Farmers drive their animals to the nearest federally inspected packer. For some, this means shipping their animals hundreds of miles.

New problem, old solution

In response to these trends, smaller processors and farmers have called for new ways of processing and marketing their meat. This has led states to revive an old idea: small state-inspected processing facilities.

In 1906 Congress passed the first meaningful meat inspection law. The law required that all meat sold to foreign countries or across state lines be inspected by the federal government (eventually the United States Department of Agriculture (USDA) Food Safety and Inspection Service). The individual states (or in some cases cities and counties) had a variety of generally weak laws and ordinances concerning meat inspection. These remained applicable for all meat processed and sold in-state.

With the passage of the federal Wholesome Meat Inspection Act and the Wholesome Poultry Products Act in 1967, all state meat inspection programs were required to license state processing plants as "at least equal to" federal standards. The only exception to the rule was a stipulation that allowed very small meat processors to pack meat for individual customers (known as "custom" processors).

By 1970, almost every state maintained its own inspection system for meat processors, primarily because the relatively small packers who kept their products within the state did not want to be subjected to federal inspectors.

Over the next 10 years, however, the majority of states turned all inspection back to Washington. Some dropped the programs to save costs, while other programs were revoked when the USDA found them falling short of federal guidelines.(6)

With the programs gone, processors without federal inspection could only slaughter and process meat for the farmer who raises the animal or the consumer who purchases a live animal, stamping the wrapped meat "not for sale." Restricted to individual service, these custom processing plants slaughter livestock for local farmers, dress deer and store meat for customers. The plants are by nature small - most process ten animals a day or less. These processors shy away from applying for federal inspection, wary of a USDA meat inspection program that caters almost exclusively to large, assembly line operations.

Recently, however, small processors and farmers have encouraged states to bring back state certification programs. The decision has suited the USDA, which finds it lacks the resources to cover additional state meat plants. Bringing back the programs has made it easier for the state's meat producers to sell their homegrown beef, pork and poultry directly to consumers in the state. Farmers may now take their livestock to a growing number of state-inspected processors that have been certified as "equal to" federal standards.

By selling directly to a smaller local processor, farmers avoid the trucking, brokerage and yardage fees associated with selling to a larger remote packing plant. Farmers typically receive the same spot market price as they would from large packers. Unlike the large plants, however, smaller processors can provide more individualized service, and may offer a higher price for specialty meats such as organic beef. Processors may then sell the meat in an adjacent meat market or through a private label distributed in-state.(7)

Many farmers have opted to retain ownership of the meat altogether. Using "co-packing" agreements, farmers work with a processor to cut and package their livestock, then sell the meat directly to consumers or through local grocery stores. The ability to direct-market the meat increases business for processing plants while providing higher returns to farmers.

States take the lead

Minnesota boasts an example of a revived state meat inspection program. In November 1998 the Minnesota Department of Agriculture (MDA) recreated the state's meat inspection program, which had been shut down in 1972. The state currently has approximately 360 slaughter and processing facilities, of which 100 are large USDA-certified plants. Most of the remaining 260 facilities are custom processors and are not certified to handle meat for sale.(8)

In the last two years 32 of the smaller plants have been state certified as "equal to" federal guidelines. They now collectively process about 200,000 pounds of meat per month for sale in Minnesota. (Ten of the plants do slaughtering and processing. The rest only process.) MDA's program has spurred construction of ten new meat processing facilities and the upgrading of many more small plants. The federal government pays half the cost of the state program's $675,000 annual budget.(9)

Recently North Dakota became the 26th state to adopt a state meat inspection program to certify meat for marketing in-state. South Dakota has had its program for several years and is now inspecting over 100 facilities. Some states never ended their state inspection programs: Wisconsin has been inspecting meat for nearly 30 years, and now has more than 300 state-inspected plants and 100 inspectors.

Today state meat inspection programs cover about 3,000 smaller plants that account for about 7 percent of all meat and poultry products consumed in the United States.(10)

Now the challenge lies in allowing state-inspected meat to cross state lines. A bill introduced by Senator Daschle (D-SD) would have allowed interstate meat marketing (S.1988, the New Markets for State Inspected Meat Act of 1999). The bill would also require state meat and poultry inspection programs to become seamlessly integrated with federal programs. Despite widespread support, the bill did not pass under the 106th Congress, but it will likely be reintroduced and passed in the next session.

Saving local meat

If past experiences portend the future, the meatpacking industry will further consolidate and move again. Seeking lower costs and less regulation, many of the major U.S. meatpackers already have plants abroad. To survive, livestock farmers and smaller processors must encourage consumers to build a rooted, regionally based food system. State meat inspection programs have helped them to take the first step.

Footnotes

1) Prepared statement of Keith Collins, chief economist of the USDA, before the Senate Committee on Agriculture, Nutrition and Forestry. Federal News Service (January 26, 1999).
2) MacDonald, Ollinger, Nelson and Handy. "Consolidation in U.S. Meatpacking," USDA/ERS Report No. 785 (2000): p.9.
3) Anderson, Donald W., Brian C. Murray, Jacqueline L. Teague and Richard C. Lindrooth. "Exit from the meatpacking industry: a microdata analysis," American Journal of Agricultural Economics 80, no. 1 (February 1998): 96.
4) Drabenstott, Mark, Mark Henry and Kristin Mitchell. "Where have all the packing plants gone? The new meat geography in rural America," Economic Review 84, no. 3 (1999): 65-82. Published by the Federal Reserve Bank of Kansas City.
5) Benjamin, Gary. In Economic Perspectives (January 11, 1997).
6) The USDA began revocation of some state meat inspection programs after several well-publicized cases of lax inspection enforcement. Interestingly, today the majority of widely publicized meat contamination cases are traced back to USDA-inspected plants. Processing plants are much larger today and contamination incidents at a large facility pose a much greater risk to public health than similar incidents at smaller facilities.
7) The economies of scale associated with meat processing in small facilities (15 animals/day or less) are largely undocumented. Most studies focus on plants that process 1,000 animals a day or more. However, different facilities serve different markets. In cattle, for example, small processors serve almost exclusively a custom, or niche market, while nearly all larger facilities specialize in boxed beef. Due to their size, larger processors are able to sell "drop" (miscellaneous non-edibles, blood, etc.) to secondary processors for $100-120/head. Smaller processors create smaller, unreliable amounts of drop, and consequently receive $17/head for the same material. In some cases, they must pay disposal fees. They are thereby at a competitive disadvantage from the start.
8) Lillywhite, Jay. AURI Meat Processors Census and Survey 2000. http://www.auri.org.
9) Personal conversation with Kevin Elfering, Minnesota Department of Agriculture.
10) Federal Document Clearing House Congressional Testimony, April 6, 2000. Carol Foreman, director of the Consumer Federation of America, for the Senate Agriculture, Nutrition and Forestry Committee on S.1988.

Brian Levy
Research Associate, Institute for Local Self-Reliance
© 2001 Institute for Local Self-Reliance

Questions directed to [email protected]

phone: 612-379-3815

View the rest of the Winter 2001 issue of The New Rules, or view Back Issues

The above story originally appeared in
The New Rules- Winter 2001

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Econ101

Well-known member
What has happened to small plants lately with USDA Inspections?



...........

Perhaps the most troublesome trend of the year was the inability of many meat plants to continue under federal inspection. The Nov. 15th AAMPlifier relays that since HACCP was introduced and through the second quarter of 2005, the previous total of 5,268 processing plants under USDA inspection has decreased by 1,149 (21.9 percent) to 4,119. As is always the case, the little guy got hurt the most. Those facilities dropping federal inspection include 48 percent that were very small plants (fewer than 10 employees or less than $2.5 million in sales); 27.5 percent that were small plants (having 10 or more but fewer than 500 employees); and 10 percent that were large (those with 500 or more employees). What’s more, the number of slaughter plants decreased by 188 plants to a total of 803. Of those ceasing inspection, 58 percent were very small plants; 22 percent were small; and 6 percent were large plants.

Inspection withdrawal reasons varied, Krut relays. But based on hundreds of calls and communications AAMP has received from these plants, most decided to drop USDA inspection because of frustration over ever-changing HACCP requirements, the lack of uniformity in inspection demands, and the lack of agency acceptance of available scientific validation for the smallest plants.

“This figure has been dramatic with nearly 22 percent of all meat slaughter and processing plants dropping out of inspection in the past five years. In some areas, more than one-third of the plants have withdrawn,” Krut says.

Looking to 2006, other issues must be addressed early, Krut says. One is the unfair application of FSIS-imposed overtime that results in direct cash payments in excess of $10,000 a year in many very small plants. The other is the need to re-establish ratings for Noncompliance Reports. “Not all NRs are serious, but FSIS’ enforcement program ignores that fact and builds a bad track record for even the best of plants,” Krut says. Industry must continue to be prepared to address unexpected challenges, Boyle says. “Set clear goals, but be nimble enough to respond when your priorities change due to events you could never predict. That’s what makes our industry interesting.”

Here’s hoping industry –small and very small plants, in particular – gets some needed relief in 2006, and that the pluses for industry be many – and the minuses be few.

Bryan Salvage, Editorial Director/Processing Businesses [email protected]

Web posted: December 30, 2005
 

Econ101

Well-known member
USDA-Disapproved: Small farmers and big government
National Review, Jan 27, 2003 by Rod Dreher

Find More Results for: "USDA inspected small plants "
USDA Announces Grants...
FSIS launches program...
Horse plants to pay...
Salmonella declines...

Jenny Drake was a Virginia state health inspector until five years ago, when she and her husband moved to rural Tennessee and started Peaceful Pastures, a small livestock farm. They raise free-range beef, pork, turkey, veal, lamb, goat, duck, and chicken -- without jacking the animals up with hormones and antibiotics, as is common practice at factory farms. Their meat goes through a USDA processing facility, as government regulations require -- all except the poultry. And because of those chickens, the Peaceful Pastures have been troubled. Therein lies a tale about government regulation, the decline in food quality, and the end of family farming in America.

"The state says no bird in Tennessee can be sold without USDA inspection of the processing facilities," says Drake. "Here's what kills all of us small poultry farmers: There are no USDA custom-kill processing plants in the entire Southeast."

Drake says she looked into building a small processing facility on her farm, but the cost of meeting government standards made it impossible. If all she had to do were to construct facilities strictly for meat processing, Drake figures she could have done so for $20,000; but as the law stands now, a building that met minimal federal guidelines would cost about $150,000.
 

Econ101

Well-known member
What the USDA thought would happen:

Regulation and Industry Structure

No analyses have been published addressing the impact of sanitation control and process control regulation (Wholesome Meat Act of 1967 and Wholesome Poultry Products Act of 1968) on industry structure, but Census Bureau data show a large number of very small plants exiting the poultry slaughter industry after 1963. Total Quality Control and Partial Quality Control programs, on the other hand, were completely voluntary and thus should have had no effect on Industry structure.

Will increased HACCP regulations lead other small firms to close up shop? There are more than 400 swine- and hog-slaughtering plants regulated by the Food Safety and Inspection Service and perhaps as many inspected by State regulatory agencies. Most of these plants slaughter much less than 20,000 cattle or hogs annually. Using Census data, Ollinger, MacDonald, Handy, and Nelson found that about 50 percent of all cattle, hog, chicken, and turkey slaughter plants fail every 5 years. These plants are primarily in the small and very small categories. This historically high level of plant turnover occurred before HACCP was implemented. Consequently, it will be difficult to separate HACCP-caused plant failures from the normal high levels of plant turnover.

Furthermore, ERS researchers, using FSIS estimates, concluded that HACCP regulation should have small cost effects on both large and small plants. These small estimated costs appear unlikely to cause a major increase in plant turnover.

ERS plans to update the estimates of HACCP compliance costs by conducting a survey of industry's use of new food safety technologies, management practices, and work practices.

For more information concerning market structure visit the Food Market Structures briefing room.


For more information, contact: Michael Ollinger

Web administration: [email protected]
Updated date: February 12, 2001

As you can tell, from 2001 to 2005, small plants suffered despite the best analysis of the USDA's top dogs.

The USDA, with its policies, is helping concentrate the industry for the benefit of the big packers with its regulations.
 
A

Anonymous

Guest
The biggest fraud comes about when you have an employee of the Mexican government ( who expects half of their employees and bureaucrats salaries to come from graft and kickbacks- and who will "sell you my seestah for 50 Pesos" ) using that USDA inspected stamp- and then giving the US consumer the impression that it has been inspected by a USDA US government employee who is answerable to our laws and oversight....

Former HHS Secretary Tommy Thompson said that only .005% of all imported food/meat product ever actually gets looked at by a US inspector...

That to me is fraud......And the competitive advantage lies with the companies in those countries that have no oversight and allow anything into the product ....
 

Econ101

Well-known member
Protecting the big boys:

Food Safety Suit filed against USDA by Montana Meat Processor

Government Accountability Project
October 13, 2004
Email this page

The Government Accountability Project (GAP), a non-profit good government group based in Washington, D.C., filed an action in the United States District Court for the District of Columbia today on behalf of a Montana meat processor who had urged Congressional hearings during the months leading up to the July 2002 E.coli beef recall by ConAgra Foods, one of the largest beef recalls in history. John Munsell, who operates his decades old family beef slaughter and packing plant, Montana Quality Foods of Miles City, Montana, filed the suit for declaratory, injunctive and monetary relief against the United State Department of Agriculture and several of its officials. The twenty page federal complaint alleges violation by the USDA of the Federal Meat Inspection Act of 1907, and of his own free speech and petition rights under the First Amendment of the U.S. Constitution. Munsell alleges he was retaliated against by the USDA for publicly criticizing the agency’s performance in protecting the nation’s beef supply from adulteration by the bacterial pathogen, E. coli O157:H7, originating in America’s largest beef slaughter plants. Munsell’s family has operated a meat processing plant in Montana since 1946.

As a major part of his business operations, Munsell grinds and processes boxed beef and course ground beef purchased from USDA classified “Large Plants”. Throughout its history, no consumer death or illness related to adulterated beef has been attributed to any product processed by Munsell’s family business. The federal suit alleges that, as a matter of actual practice and policy, the USDA imposes a form of strict liability on small plants like Munsell’s for adulterated meat products received from large plants. He alleges, however, that the USDA does not adequately insure that these politically powerful large plants are controlling E.coli contamination. Instead, he says, USDA policies prevent government inspectors at small plants from doing testing that might show the large plants are shipping E.coli adulterated meat that has already been labeled “USDA Approved” to the small down-line processors like him.

E. coli is the abbreviated name of the bacterium in the family Enterobacteriaceae named for its genus Escherichia and its species coli. The bacteria live in the intestines of even healthy cattle, and adulteration of meat may occur in the slaughtering process. E.coli from cattle is harmful to human health and can cause severe diarrhea, kidney failure, severe illness and/or death.

In January and February 2002, the USDA issued a recall for less than 300 pounds of meat sold from Munsell’s plant, which he believed he had obtained from one of two of the top five largest beef processors in North America, Cargill Beef of Wichita, Kansas, or ConAgra Foods of Omaha, Nebraska. However, Munsell alleges that when he attempted to give the USDA proof of the large plant source of the E.coli contaminated beef, the agency would not accept it.

According to the lawsuit, Munsell then began contacting individual congressmen and senators urging an investigation of USDA practices, and that Congress force the USDA to record and “traceback” the large plant source of contaminated beef each time the E.coli is found in test sampling at small plants. Senators Max Baucus and Conrad Burns, and Congressman Denny Rehberg, all of Montana, subsequently sent letters to the USDA asking for an assessment of Munsell’s allegations that public health was being jeopardized by the large plants and USDA’s lax enforcement toward them. Munsell expressed concern that large amounts of E.coli contaminated coarse ground beef from the large plants could be in frozen storage at numerous small plants across the country, and once processed, could lead to consumer sickness and death.

While these Congressional inquiries were in progress, according the lawsuit, ConAgra announced an initial recall of 350,000 pounds of E.coli adulterated beef, and in July, 2002, the volume of this recall was substantially increased to over 19 million pounds.

The lawsuit alleges that the USDA began a campaign of unfair and unwarranted regulatory enforcement actions against him in retaliation for his allegations to Congress and top USDA officials. Munsell says that he was ordered by the agency to submit corrective action plans to prevent E.coli at his plant, but rejected his demand that the most effective corrective action would be for the USDA to insure that “USDA Approved” beef he buys from the large plants is not contaminated when it arrives at small plants like his. Consequently, the lawsuit states, Munsell was forced to engage in expensive testing and “hazard analysis” for meat that he, and the public, should be able to rely upon as safe, given its USDA “approved” status when purchased.

The suit asks the federal court to issue an injunction requiring the USDA to reform its practices regarding the responsibilities of large plants, and to protect the rights of small plants to assume that large plants are selling safe beef. Among the specific provisions that Munsell seeks in the injunction to enforce the Federal Meat Inspection Act are: (1) Obligating the USDA to insure through inspection that no E.coli adulterated beef enters into commerce from large plants, or is supplied to small plants in the course of commerce. This would include insuring that large plants submit and implement approved “hazard analysis” plans to detect E.coli before it leaves their plants; and (2) forbidding the USDA from taking enforcement actions against small plants when it can be shown that the E.coli came from the large plants, but instead requiring the USDA to immediately perform a traceback to the supplying large plants, and to implement corrective action against them.

The lawsuit also seeks unspecified money damages against one USDA officials who allegedly planned and directed retaliation against Munsell and his family business. A jury would decide these damages. The complaint filed today can be found at www.whistleblower.org.

###

As the nation's leading whistleblower organization, The Government Accountability Project 's mission is to protect the public interest by promoting government and corporate accountability through advancing free speech in the workplace and ethical conduct, litigating whistleblower cases, and developing policy and legal reforms of whistleblower laws. For more information visit www.whistleblower.org

NOTICE: In accordance with Title 17 U.S.C. Section 107
 

Econ101

Well-known member
Oldtimer said:
The biggest fraud comes about when you have an employee of the Mexican government ( who expects half of their employees and bureaucrats salaries to come from graft and kickbacks- and who will "sell you my seestah for 50 Pesos" ) using that USDA inspected stamp- and then giving the US consumer the impression that it has been inspected by a USDA US government employee who is answerable to our laws and oversight....

Former HHS Secretary Tommy Thompson said that only .005% of all imported food/meat product ever actually gets looked at by a US inspector...

That to me is fraud......And the competitive advantage lies with the companies in those countries that have no oversight and allow anything into the product ....

It is pretty sorry when imported meat gets the stamp easier than small companies in the USA. This gives comparative advantages to the large multinationals who bribe our government.
 

mrj

Well-known member
Are these problems the fault of USDA.......or of the individual state?

I believe SD has, or maybe it is federal, a law in which state inspection must be equivalent to, or better than, federal inspection. Being a slower process, it seems it should not be difficult to inspect better than at the federal level involving huge plants moving quickly.

I believe some buffalo processing plants, and some small plants processing beef and other meats do have Federal Inspection in SD, and there are quite a number of state inspected plants. At least four, very likely more, within 60 miles of us, and two within 30 miles.

Rumor has been that it is the small federal inspected plants keeping state inspected plants from selling product interstate, in order to keep their monopoly on that business, believing they go the supposed extra mile of providing federal level of inspection, which obviously is not any better than state inspection under our regulations.

MRJ
 
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