What is in this article?:
- Unfounded consumer backlash to lean finely textured beef threatens a key cog in industry efficiency.
- Consumer reaction to an ABC News report about LFTB on March 7 was so loud and stunningly swift that three of the nation’s largest grocers decided to quit offering ground beef containing LFTB.
LFTB goes viral
With social media as the vector, the LFTB myths and misinformation multiplied and spread faster than a grass fire in high wind. Less than three weeks after the ABC News episode, BPI had idled three of its four LFTB processing plants in Iowa, Kansas and Texas. According to BPI, those plants accounted for around 650 jobs. To the company’s everlasting credit, they decided to keep paying full salary and benefits to those employees while figuring out the potential for rescuing their livelihood.
Tyson Foods, one of many beef processors that sell beef trimmings to BPI, says the reduction of BPI’s operations means less lean meat will be recovered and more of the beef trimmings will be converted into lower-value products.
“We believe the decrease in BPI’s production will result in less lean beef available in the market and may result in higher consumer prices. Alternatively, we believe there may be an increase in the supply of some of the raw materials used to produce ground beef, and this may result in lower values that could ultimately affect livestock prices,” Tyson said in a late-March statement.
On March 29, Iowa Gov. Terry Branstad initiated a media event and hosted the governors of Kansas and Texas, along with the lieutenant governors of Nebraska and South Dakota – states impacted by the plant closures – for a show of support for BPI in Sioux City. Also included in the conference were national media, USDA officials, representatives of food safety and consumer advocacy groups, animal scientists and academics.
At about the same time, BPI and other industry groups began encouraging consumers to study the facts, and then demand their retailers at least give them the choice between ground beef with and without LFTB.
Some retailers are doing just that Hyvee, Inc., with 235 retail stores in eight Midwestern states, explained in a late-March statement: “Following our recent decision to stop purchasing ground beef containing LFTB, we heard from many customers who asked us to continue carrying this product. They’ve sent us a clear message: They want a choice when it comes to ground beef, and they want to support companies that provide thousands of jobs in our Midwest trade area. In response to this feedback, Hy-Vee has made a decision to offer both kinds of ground beef – both with and without LFTB. Both products will be identified so customers can determine for themselves which type of ground beef they want to buy.”
Economic dominos fall
In the meantime, negative economic consequences are rippling across the industry.
The week of March 30, Texas Cattle Feeders Association market analysts pointed out, “So far, the impact of the misrepresentation of LFTB has cost the 50% ground beef market about $10/cwt.”
That same week, the drop credit plunged 55¢/cwt., equivalent to $6-$7/fed animal. At least part of that stemmed from declining tallow values due to the increased amount of sub-50% trim being rendered.
All the while, packer kills ran lighter as they figured out what to do with the sub-50% trim they’d been selling to LFTB processors, and also how to serve customers saying they no longer wanted ground beef containing LFTB.
Lighter kills compounded short-term beef demand already made tenuous by unexpected extra beef tonnage due to the mild winter, feedlots becoming less current in marketings, another surge in grain prices, and increasing gasoline prices overwhelming paltry gains in per-capita income.
“LFTB is a rather small component of the total carcass, but it’s an important component,” says Jim Robb, Livestock Marketing Information Center (LMIC) director.
At the end of March, Robb explained the market shock from the LFTB fiasco was too new to pinpoint specific impact on beef demand. He reckons a negative impact will emerge with more weeks of data.
Robb also notes what should be a chilling reminder to both beef producers and consumers in an age of quick-kill media: “Consumers in the U.S. don’t have to buy beef; they likely wouldn’t starve without it.”