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Recent Developments Surrounding LFTB

May 9, 2012
By: Jim Wiesemeyer, Pro Farmer Washington Consultant

Following are updates on recent developments surrounding lean finely textured beef (LFTB):

Prices have risen for LFTB component: Dow Jones reported that wholesale prices for "50 percent lean" beef trimmings -- one of the components in lean finely textured beef (LFTB) -- have risen by more than 50 percent from mid-April lows, according to USDA data. Ironically the story ran just a day after Beef Products Inc. announced they were permanently shuttering three of their four plants that make LFTB, saying demand for the product had slumped and not recovered. (see item below for details on this....)

PERSPECTIVE: The uptick in prices for the product may well be too little, too late, as evidenced by the BPI announcement. It may also signal that those products are finding some other "home" in the meat sector since the LFTB demand has dropped off so dramatically.

USDA responds to comments from Sen. Chuck Grassley (R-Iowa) on LFTB: USDA is taking exception to comments from Sen. Chuck Grassley (R-Iowa) who contends the USDA response to the LFTB situation helped to make matters worse.

Following the USDA move to offer schools the option to not purchase LFTB for use in lunches despite insisting the product was safe, Grassley said USDA "immediately said hot lunch programs didn't have to purchase it and so that sent a signal if it wasn't good enough for the hot lunch program, it wasn't good enough for this supermarket and that supermarket and they all jumped on board."

Radio Iowa noted that Grassley's comments did not sit well with USDA, quoting Communications Director Matt Paul as saying, "You know, we were very disappointed that Senator Grassley made that characterization. From the first discussion of this in the national news, USDA was very strong in pointing out the safety record of LFTB. And in fact, at the pinnacle of this public discussion, the company cited USDA's support for the product."

Paul further noted, "All we said was that schools have a choice if they don't want to receive this product, we on behalf of them, sort of their wholesaler, are simply making a case based on their concerns until there's some greater public understanding of LFTB, that we would give district the option."

The USDA response was based on "a consistent message about the safety of this product," Paul said.

PERSPECTIVE: Grassley isn't the only one who has questioned the USDA response to the LFTB situation. Others have noted the apparent contrast between USDA's response to the LFTB developments and the apparent message USDA sent to foreign buyers of U.S. beef in the wake of the fourth U.S. case of BSE - that the product is safe and there is no reason for them to halt imports of U.S. beef. Only Indonesia opted to place any limits on U.S. beef.

Meat Industry Update: LFTB Closings | Safeway Pork | Taiwan Team in U.S.

Beef Products Inc. to permanently close 3 plants: Beef Products Inc. announced it will permanently close its plants that produce Lean Finely Textured Beef (LFTB) in Amarillo, Texas; Garden City, Kansas; and Waterloo, Iowa. Its South Sioux City, Nebraska, plant will continue to operate at a reduced capacity.

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