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OVERVIEW:
* CANADA'S GRAIN GROWERS CHAFE
By Douglas Belkin
* HARPER ANNOUNCES $1 BILLION IN FARM AID
CBC News
* AS FARM NUMBERS DWINDLE, FARM BUREAU INFLUENCE BROADENS
By Ken Midkiff
* CARGILL MILL OCCUPIED BY BRAZIL LAND REFORM ACTIVISTS
By Dow Jones Newswires
* KRAFT FOODS BUYS SHARES FROM ALTRIA
BY Associated Press
* THE HARD TRUTH ABOUT ETHANOL
By Matt Crenson
* SQUEEZING PROFIT FROM ETHANOL TO GET HARDER
By Philip Brasher
* FAST-FOOD INDUSTRY'S VULNERABLE UNDERBELLY
By Jerry Hirsch
CANADA'S GRAIN GROWERS CHAFE By Douglas Belkin Wall Street Journal March 8, 2007
Canada's barley farmers, long insulated from the vagaries of global trade by the government-backed Canadian Wheat Board, will vote next week on whether to break free.
Some farmers view the 72-year-old board, which buys and sells their product on the world market, as inefficient. If the barley farmers are allowed to bolt, wheat farmers could follow, marking the biggest change in Canada's huge grain business in three generations.
Farmers like Doug McBain, who has harvested barley on 1,500 acres of high country prairie all his life, are among those agitating to leave. As global grain prices have climbed in recent years, the debate has grown more contentious. "Where you stand has almost become like a religion," says Mr. McBain, 49 years old. "What I say is, if you can't compete on your own, get out of the market, but don't try and tell me what to do."
Last year Mr. McBain was offered $4.25 a bushel from a Chinese distributor for his malt barley. He was legally prohibited from selling it himself, and instead was required to accept $3.25 from the Wheat Board, which hadn't sold at the top of the market. He says he has friends who would like to grow organic barley but, because they couldn't sell it for the premium it could command, they have little incentive to try.
In recent weeks, long-simmering tensions between backers and opponents of the 15-member board have reached a boil. Some 80,000 barley farmers have until March 13 to cast their advisory vote on one of three options: ditch the board and sell their grain themselves, preserve the status quo, or remain under the board with the provision that they can opt out. Polls show less than one-third of farmers want to leave things as they stand.
Barley represents about ten percent of the wheat board's business, but the vote is seen as a bellwether for the nation's massive wheat market.
At the heart of the fight are issues of land rights, self-determination and money. Ultimately at stake is the system through which 55% of the world's durum wheat and 25% of its malting barley will be sold. U.S. grain companies are watching the struggle because they stand to benefit from a more accessible market.
In 1935, Canada created the wheat board to insure loans to farmer's cooperatives during the Great Depression. About 90% of the country's wheat and barley for domestic human consumption and export is sold through the board. The majority of that harvest is pooled and farmers receive an averaged price.
For the farmer, that means the lows in the market are generally avoided --- but so are the highs, and whether that has meant an overall benefit to the farmer has become a contested issue.
In the mid-1990s farmers began to challenge what they came to see as over-regulation. Some protested the board by illegally trucking their harvest to the U.S. and selling for better prices. Dozens ended up in jail. For farmers who want out of the wheat board, which now sells about $4 billion of grain a year, those protesters are seen as freedom fighters. To others, they are traitors.
"If you make a decision on your farm that only affects you, you get to make it," says Kyle Korneychuk, a wheat board director and Saskatchewan farmer who favors maintaining the board's monopoly. "But if you're going to do something that affects all the farmers in Canada ... you're going to get pushed back."
The board today is more crucial than ever, says Mr. Korneychuk, as a half-dozen multinational agricultural companies like Archer Daniels Midland Inc. and Cargill Inc. control the lion's share of the global grain market.
"We're aware [of the controversy] but we're not lying awake dreaming about it or scheming around it," Cargill spokesman Robert Meijer said. "Once they make a decision we will work with them, whether that be with the board or without the board."
Last year, Canada's Conservative Prime Minister Stephen Harper replaced four of the five government-appointed members of the board. In their place he selected directors who want to break the board's monopoly.
"The ultimate aim is to have a strong, viable, yet voluntary wheat board," said Conrad Bellehumeur, spokesman for Agriculture Minister Chuck Strahl. "We want to remove the wheat-board monopoly and offer farmers the freedom to choose how they market their product."
Mr. Korneychuk says that if the board became optional, it would lose effectiveness and limp along until it disappears in a few years.
To that, Mr. McBain says good riddance. His broad stretch of prairie at the feet of the Rocky Mountains has been painstakingly cultivated by his family since his grandfather immigrated from Scotland 100 years ago. Every slab of timber in the pair of red barns and each furrow in the soil was set in place by a McBain. Today, the farmer has little patience for anyone telling him what to do or how to do it.
Mr. McBain also says board regulation has stymied local investment. He argues that were it not for the board, hundreds of millions of dollars would have been invested in Canada instead of migrating to the U.S.
Mr. Korneychuk says tens of thousands of farmers have already left their land because they couldn't compete with subsidized U.S. farmers or the cheap labor available in Eastern Europe. As fixed costs for farmers continue to rise and competition tightens, he predicts it will only get worse. In the meantime, the board has reformed itself and now offers farmers a broader array of options to sell their crop than they had a decade ago.
After the March 13 vote, the debate over whether barley farmers remain under the wheat board will be taken up by the federal government, which appears headed toward an election this spring. Should the Conservatives gain a majority in Parliament, Mr. Bellehumeur, the agriculture ministry spokesman, said the board will be opened up. The battle over wheat is likely to follow. "The ultimate goal is to remove the monopoly," he said.
Mr. McBain said he is ready. "I don't need a baby sitter."
HARPER ANNOUNCES $1 BILLION IN FARM AID CBC News March 9, 2007
Prime Minister Stephen Harper was in Saskatchewan Friday to announce $1 billion in aid for Canadian farmers --- but the federal budget will have to pass before all of the cash starts flowing.
The money will come in two chunks: $600 million will go toward setting up a savings program where farmers and governments will contribute to accounts and another $400 million will help farmers offset the rising costs of inputs like fuel, fertilizer and chemicals.
Making a brief appearance in Saskatoon with Agriculture Minister Chuck Strahl, Harper said after the $400 million portion is spent, there'll be $100 million a year to deal with cost-of-production increases. The money will be paid out directly to farmers and Ottawa is looking for a provincial component, Harper said.
"Our government is hopeful that the provinces will join us in a cost-sharing approach that lies at the heart of new farm savings programs," Harper said. "We will be looking forward to working with the provinces quickly so producers will be able to benefit as soon as possible."
Harper said implementation of the new program will be dependent on passage of the budget, which comes out March 19.
Ken McBride, the president of the Agricultural Producers Association of Saskatchewan, said the new spending is good news and mirrors what his group has been advocating for months, although it won't solve the problems of every farmer in the country. "We still need stronger, long-term policies to move the industry forward and we look forward to discussing those matters," McBride said in a news release.
But National Farmers Union president Stewart Wells dismissed the announcement as little more than an election gimmick. "You might not want to call it vote-buying, but here's a cheque at election time," Wells said. A federal election hasn't been called yet, but Wells says all the recent federal announcements make it seem like one is coming.
Saskatchewan Premier Lorne Calvert was not at Harper's side when he made the announcement. Asked about that, Harper said it was a national program, not a Canada-Saskatchewan program.
AS FARM NUMBERS DWINDLE, FARM BUREAU INFLUENCE BROADENS By Ken Midkiff Columbia Tribune March 9, 2007
The one good thing that came out of the sordid story about the peccadilloes of Fred Ferrell, the former director of the Missouri Department of Agriculture, was that the Missouri Farm Bureau Federation was exposed as Gov. Matt Blunt's go-to organization. Indeed, Blunt himself related that very few of his decisions were made without consulting the Farm Bureau.
Charlie Kruse, president of the Missouri Farm Bureau, was a staunch Ferrell supporter, recommending him for the job as director of the ag department and lamenting his demise. When Blunt fired Ferrell, Kruse commented on the many good things Ferrell did as agriculture director. In the course of revealing that Ferrell had done some "inappropriate" things, it also came out that the Farm Bureau had inordinate influence with the governor. So what is it that Blunt likes about the Farm Bureau?
Let's look at some Farm Bureau policies and positions. These are all taken right off of the Web site www.mofb.org, so there can be no whining and moaning that the organization never said it. The Missouri Farm Bureau:
* Is in favor of drilling in the Arctic National Wildlife Refuge. * Is opposed to most government regulations but supportive of more government money. * Supports corporate agribusinesses, large corporations that own the animals in concentrated animal feeding operations. * Is in favor of nuclear energy and nuclear fusion. * Is in favor of doing away with the federal office of education --- in keeping with its motto, "Go away, but give us more money." * Believes that Missouri should be no stricter than the U.S. government in laws and regulations. * Is opposed to minimum wage laws applying to teenagers.
Many of the 97 pages of Farm Bureau positions and policies have nothing to do with agricultural issues --- but then, most Farm Bureau members are not farmers. Although it is difficult to ascertain the number of Missouri policyholders who are farmers, a few years ago a study revealed the there were about 4,000 policyholders in Houston --- Texas, that is.
That metropolitan area has few to no farmers. How is it that the Farm Bureau Federation is sustained? The answer is that every person who is a consumer of various companies with the name "Farm Bureau" contributes to the Farm Bureau Federation. The "Voice of the American Farmer" turns out to be the voice of a few conservative paid executives.
In addition to establishing positions based on shaky ground, the Missouri Farm Bureau Federation is sometimes adamantly in favor of local control --- such as school boards --- and at other times adamantly opposed --- such as regulations on corporate agribusiness. It must subscribe to the theory that "consistency is the hobgoblin of small minds." If local control is good for schools, it must be good for public health.
Whether you know it, if you hold a Farm Bureau insurance policy, you are in favor of the above positions and many more. You are opposed to abortion, you are in favor of weakening the Endangered Species Act, you want more undocumented laborers (while opposing "amnesty"), you are in favor of nuclear fusion and you are a fervent believer in right-wing values.
Didn't know that? Didn't know that the Farm Bureau Federation speaks for you?
The number of full-time farmers in this country has dropped to less than one percent of the population. At the turn of the 19th century, more than 50% of the population of this country lived and worked on the farm. This astounding turnaround occurred while the Farm Bureau claimed to speak for the farmer.
With friends such as these, who needs enemies?
KEN MIDKIFF is chairman of the Missouri Sierra Club and author of the forthcoming book "Not a Drop to Drink."
CARGILL MILL OCCUPIED BY BRAZIL LAND REFORM ACTIVISTS By Dow Jones Newswires March 7, 2007
SAO PAULO, Brazil --- Activists from the international land reform movement Via Campesina invaded the Cevasa ethanol mill owned in part by Cargill on Wednesday, Cargill confirmed.
The Cevasa property is located in Patrocinio Paulista, roughly 300 kilometers north of Sao Paulo city. Cevasa is a joint venture with Cargill and other local partners. The invasion occurred on the day that U.S. President George W. Bush is scheduled to arrive in Brazil to discuss ethanol with Brazilian president Luiz Inacio Lula da Silva.
Cargill purchased 63% of Central Energetica Vale do Supucai Ltda, or Cevasa, last year. The mill, one of Brazil's largest, produces 1.4 million metric tons of sugarcane and 125 million liters of ethanol each year, according to Cargill.
The cane crop is still growing and no sugarcane is being crushed at this time. Sao Paulo sugar mills will go into production phase around April. "We're taking advantage of the fact that Bush is coming today to talk about ethanol and sugarcane to denounce the expansion of monoculture crops in Sao Paulo," said Soraia Soniano, a spokeswoman from the Landless Rural Workers Movement, known by the acronym MST. Soniano is currently on the property.
"We took over Cargill because the company is a symbol of big transnational agribusiness," Soniana said.
Some 200 women from MST and Via Campesina invaded the Cevesa mill at 5:30 in the morning local time, or 0830 GMT, Cevasa said. Via Campesina put the total close to 900. "When the workers arrived three hours later, they saw us and turned around and went home," Soniano said.
Wednesday's action is part of a larger scheme against agribusiness this week. At least four properties were occupied by Via Campesina and MST activists over the last 24 hours under the banner "Women Against Agribusiness". The movement is also part of the group's actions for International Woman's Day 2007, celebrated worldwide on March 8.
Via Campesina said that at least 700 freelance cane cutters went on an informal strike Tuesday and Wednesday at the Sao Martinho ethanol and sugarcane properties in Pirandopolis, around 600 kilometers north of Sao Paulo city. The group said President Bush was scheduled to visit the site on Friday. The workers are protesting against big land owners who they say have reduced per-ton pay for sugarcane cutting. Cane cutters earn between 580 Brazilian reals ($274.88) and BRL900 per month, according to Soniano.
Land reform activists also invaded the office of Brazil's National Development Bank, or BNDES, in Rio de Janeiro on Wednesday. BNDES is one of Brazil's top agribusiness credit lenders. Women from Via Campesina also invaded a mining operation owned by mining company Vale do Rio Doce in Minas Gerais on Wednesday. Cevasa said it was following judicial procedures to have the women removed from the site.
Brazil is the world's No. 1 sugarcane producer and largest producer of sugarcane ethanol.
KRAFT FOODS BUYS SHARES FROM ALTRIA BY Associated Press MARCH 7, 2007
Kraft Foods Inc., maker of namesake cheeses and other foods, said it bought about 1.4 million shares of its stock from parent Altria Group Inc. for $46.5 million, or about $32.09 per share. In a filing Tuesday with the Securities and Exchange Commission, the Northfield, Ill.-based company said the March 1 purchase was in anticipation of Atria's spinoff of Kraft.
The per-share price was the average of the high and low price of Kraft's stock on March 1. Kraft has about 1.64 billion shares outstanding.
It is a 1.5 percent premium to the stock's closing price on Monday, the day before the SEC document was filed. Altria is due to spin off the company at the end of the month. Kraft shares fell 34 cents to $31.89 during midday trading on the New York Stock Exchange. Shares of New York-based Altria shares rose 19 cents to $84.61 on the NYSE.
THE HARD TRUTH ABOUT ETHANOL By Matt Crenson The Associated Press MARCH 11, 2007
America is drunk on ethanol.
Farmers in the Midwest are sending billions of bushels of corn to refineries that turn it into billions of gallons of fuel. Automakers in Detroit have already built millions of cars, trucks and SUVs that can run on it, and are committed to making millions more. In Washington, politicians have approved generous subsidies for companies that make ethanol. And just last week, President Bush arranged with Brazil's President Luiz Inácio Lula da Silva for their countries to share ethanol-production technology.
The problem is, ethanol really isn't ready for prime time. The only economical way to make ethanol right now is with corn, which means the burgeoning industry is literally eating away at America's food supply. And most analysts conclude its environmental benefits are questionable.
Proponents acknowledge the drawbacks of corn-based ethanol, but they think it can help wean America off imported oil and help the country make the necessary and difficult transition to an environmentally and economically sustainable future.
Q: What is ethanol?
A: Ethanol essentially is moonshine. Virtually all the ethanol produced in the United States comes from corn that is fermented and then distilled to produce pure grain alcohol.
Q: Will my car run on it?
A: Any car will burn gasoline mixed with a small amount of ethanol. But cars must be equipped with special equipment to burn fuel that is more than about ten percent ethanol. All three of the major U.S. automakers are already producing flex-fuel cars that can run on either gasoline or E85, a mix of 85% ethanol and 15% gasoline. Thanks to incentives from the federal government, they have committed to having half the cars they produce run on either E85 or biodiesel by 2012.
Q: How fast is ethanol production growing?
A: According to the Renewable Fuels Association, a trade group, ethanol production has doubled in the past three years, reaching nearly five billion gallons in 2006. With 113 ethanol plants operating and 78 more under construction, the country's ethanol output is expected to double again in less than two years.
Q: Is ethanol better than gasoline?
A: For all the environmental and economic troubles it causes, gasoline turns out to be a remarkably efficient fuel. The energy required to pump crude out of the ground, refine it and transport it is about six percent of the energy in the gasoline itself.
Ethanol is much less efficient, especially when it is made from corn. Just growing corn requires expending energy --- plowing, planting, fertilizing and harvesting all require machinery that burns fossil fuel.
Modern agriculture relies on large amounts of fertilizer and pesticides, both of which are produced by methods that consume fossil fuels. Then there's the cost of transporting the corn to an ethanol plant, where the fermentation and distillation processes consume yet more energy.
Finally, there's the cost of transporting the fuel to filling stations. And because ethanol is more corrosive than gasoline, it can't be pumped through relatively efficient pipelines but must be transported by rail or tanker truck. In the end, even the most generous analysts estimate that it takes the energy equivalent of three gallons of ethanol to make four gallons of the stuff.
Q: But aren't there environmental benefits to ethanol?
A: If you make ethanol from corn, the environmental benefits are limited. When you consider the greenhouse gases that are released in the growing and refining process, corn-based ethanol is only slightly better than gasoline. Growing corn also requires the use of pesticides and fertilizers that cause soil and water pollution.
The environmental benefit of corn-based ethanol is felt mostly around the tailpipe. When blended into gasoline in small amounts, ethanol causes the fuel to generate less carbon monoxide.
Q: What about ethanol's economic benefits?
A: Making ethanol is so profitable, thanks to government subsidies and continued high oil prices, that plants are proliferating throughout the Corn Belt. Iowa, the nation's top corn-producing state, is projected to have so many ethanol plants by 2008 it could easily find itself importing corn in order to feed them.
But ethanol is profitable only when oil is costly and corn is cheap. The 51 cent-a-gallon federal subsidy doesn't hurt. But oil prices are off from last year's peaks, and corn has doubled in price over the past year, from about $2 to $4 a bushel, thanks mostly to demand from ethanol producers.
High corn prices are causing social unrest in Mexico, where the government has tried to mollify angry consumers by slapping price controls on tortillas. U.S. consumers will soon feel the effects as well. Virtually everything Americans put in their mouths starts as corn. There's corn flakes, corn chips, corn nuts and hundreds of other processed foods. There's corn in the occasional pint of beer and shot of whiskey. And don't forget high-fructose corn syrup, a very widely used sweetener.
Animals eat more than half of the corn produced in America. On Friday the Agriculture Department announced that beef, pork and chicken will soon cost consumers more thanks to the demand of ethanol for corn.
Many agricultural economists believe rising demand for feed corn has squeezed the supply --- and boosted the price --- of not just sweet corn but also wheat, soybeans and several other crops.
Last year ethanol production used 12% of the U.S. corn harvest, but it replaced only 2.8 percent of the nation's gasoline consumption. "If we were to adopt automobile fuel-efficiency standards to increase efficiency by 20%, that would contribute as much as converting the entire U.S. grain harvest into ethanol," Brown said.
Q: Isn't there a better renewable fuel substitute for gasoline?
A: Most experts think it will take an array of renewable-energy technologies to replace fossil fuels. Ethanol would be more beneficial both environmentally and economically if scientists could figure out how to make it from a nonfood plant that could be grown without the need for fertilizers, pesticides and other inputs. Researchers are currently working on methods to do just that, making ethanol from the cellulose in a wide variety of plants, including poplar trees, switchgrass and cornstalks.
But plant cellulose is more difficult to break down than the starch in corn kernels. There are also technical hurdles related to separating, digesting and fermenting the cellulose fiber. Though it can be done, making ethanol from cellulose-rich material costs at least twice as much as making it from corn.
Q: How much more efficient would cellulosic ethanol be compared to corn ethanol?
A: Studies suggest that cellulosic ethanol could yield at least four to six times the energy expended to produce it. It would also produce less greenhouse gas emissions than corn-based ethanol because much of the energy needed to refine it could come not from fossil fuels, but from burning other chemical components of the very same plants that contained the cellulose.
Q: How much gasoline could cellulosic ethanol replace?
A: The U.S. Department of Energy estimates that the United States could produce more than a billion tons of cellulosic material annually for ethanol production, from switchgrass grown on marginal agricultural lands to wood chips and other waste produced by the timber industry. In theory, that material could produce enough ethanol to substitute for about 30 percent of the country's oil consumption.
Q: What would be the economic effects?
A: If farmers find it more profitable to grow switchgrass rather than corn, soy or cotton, the price of those commodities is bound to rise in response to falling supply. "You can produce a lot of ethanol from cellulose without competing with food," said Wallace Tyner, an agricultural economist at Purdue University. "But if you want to get half your fuel supply from it, you will compete with food agriculture."
There may also be ecological impacts. The government currently pays farmers not to farm about 35 million acres of conservation land, mostly in the Midwest. Those fallow tracts provide valuable habitat for wildlife, especially birds. Though switchgrass is a good home for most birds, if it became profitable to grow it or another energy crop on conservation land, then some species could decline.
Q: Will ethanol solve all of our problems?
A: Ethanol is certainly a valuable tool in our efforts to address the economic and environmental problems associated with fossil fuels. But even the most optimistic projections suggest it can only replace a fraction of the 140 billion gallons of gasoline that Americans consume every year. It will take a mix of technologies to achieve energy independence and reduce the country's production of greenhouse gases.
If we're serious about achieving energy independence and mitigating global warming, experts say, one of those solutions must be conservation.
SQUEEZING PROFIT FROM ETHANOL TO GET HARDER By Philip Brasher Des Moines Register March 7, 2007
High corn prices could wipe out much of the profit in the ethanol industry for years to come, economists say. Net operating returns for the ethanol industry will drop to 28 cents a gallon this year, down from 61 cents last year, according to a report prepared for Congress by the University of Missouri's Food and Agricultural Policy Research Institute.
The economists see the operating margin slipping eventually to 19 cents a gallon by 2012. Plants need to make about 20 cents a gallon to cover capital costs, so the decline in margins will discourage construction of plants, said Pat Westhoff, the institute's program director. "That slows investment dramatically," he said. But a lot depends on the price of oil, Westhoff said.
The price of ethanol tends to follow the price of oil and gasoline. The estimates in the research institute report are based on projections that the price of oil will fall from about $60 a barrel last year to $50 a barrel by 2016.
David Nelson, chairman of Global Ethanol LLC, which operates a plant at Lakota, said oil prices are likely to be higher. "I'd be surprised if the world is going to keep it at $50 a barrel," he said. The report predicts U.S. ethanol production rising sharply in the next couple of years, as new plants come on line, then expanding relatively slowly from 2010 through 2016.
Economists see a similar crunch for biodiesel due to the soaring price of soybeans.
FAST-FOOD INDUSTRY'S VULNERABLE UNDERBELLY By Jerry Hirsch Los Angeles Times March 11, 2007
The Klaus family has lived the fast-food industry's nightmare: people getting sick from E. coli.
A few days after picking up a dinner of hamburgers and chicken nuggets at a Wendy's drive-in, the Salem, Oregon, family received a call from county health inspectors inquiring whether they had eaten food from the chain. JoAnn Klaus already knew something was wrong: Her four-year-old son, Evan, was hospitalized with diarrhea and dehydration, and 23-month-old Scott had similar symptoms.
As the brothers received blood transfusions to save their lives, health inspectors scoured the local Wendy's looking for any source of the E. coli bacteria that had attacked the boys. They discovered that restaurant employees cleaned lettuce with equipment that was used to handle raw hamburger meat.
The boys are still paying the price for their meal. Now 11 and eight, Evan and Scott see a kidney specialist annually. Scott takes medication for high blood pressure, and doctors say he may develop kidney problems in adolescence.
Cases like this still haunt the fast-food industry. In the last few months, hundreds of diners have been sickened by E. coli transmitted through lettuce served by fast-food chains Taco Bell and Taco John's.
Without improvements in food handling, especially of produce, new outbreaks of E. coli and other food-borne diseases will shake the public's confidence in the fare served at restaurants, industry executives say. "People might start to say they shouldn't eat anywhere," said Brian Dixon, vice president of marketing for Taco John's.
According to the Centers for Disease Control and Prevention, 52% of the 9,040 outbreaks of food-borne illness reported between 1998 and 2004, the latest year for which numbers are available, were linked to restaurants and other commercial food establishments.
Irvine-based Taco Bell, a division of Yum Brands Inc., sells more than $6 billion of tacos, chalupas and burritos annually through its 5,800 U.S. restaurants. Industry analysts believe the chain's sales plunged in the Northeast during the outbreak late last year. Yum, which also owns KFC and Pizza Hut, said Taco Bell's sales fell five percent in the fourth quarter of 2006, when the outbreak occurred, and that the incident cost the chain $20 million in operating profit.
The outbreak occurred at Taco Bells in New York, New Jersey, Pennsylvania and Delaware, but reverberated across the nation. "If it happens on one coast the people on the other coast will know 10 minutes later," said Ted Taft, a food industry consultant with Meridian Consulting Group in Wilton, Connecticut
E. coli has dogged the fast-food industry since 1992, when tainted hamburger meat served by the Jack in the Box chain killed three children and sickened 700 patrons.
Roni Rudolph Austin still bears the emotional scars of that outbreak. Her 6-year-old daughter, Lauren, died ten days after eating a hamburger with contaminated meat from a Jack in the Box in Carlsbad, California. "It upsets me that we are so many years past the point when Lauren died and we are still seeing this," Austin said. "You can't protect your children from ignorance, but that's how E. coli gets out --- through people's ignorance in how to process foods," he said.
The incident sparked large-scale testing for E. coli, more stringent inspections and improved sanitation in slaughterhouses as well as other regulatory changes. Fast-food chains also reviewed their cooking techniques to make sure meat was heated to at least 160 degrees, the temperature that kills the pathogen. Those measures, while changing the way many fast-food chains operate and reducing outbreaks from contaminated meat, did nothing to improve the safety of produce.
"Produce is the Achilles' heel of the restaurant industry," said Michael Doyle, director of the Center for Food Safety at the University of Georgia, who was hired as a consultant by Taco Bell during the outbreak. "People eat it raw and the produce industry does not have a sure-fire treatment that kills harmful bacteria." Health officials say contaminated lettuce found its way from the California farms to the companies that chop and dice the greens that caused the Taco Bell and Taco John's outbreaks. Lettuce is used in 70% of Taco Bell's food items.
"This is a serious issue," Taco Bell spokesman Will Bortz said. "We need to identify where there are loopholes in the system and address how to fix them, both for Taco Bell and the industry."
Last month, the Department of Agriculture announced a new meat inspection policy that would increase scrutiny of processing plants with repeated safety violations and where the threat of E. coli is higher. Less-risky plants with better food-handling records would be inspected less often. Under this new system, hamburger processors would get more oversight.
In California, produce companies are developing a plan to enact safer farming and processing practices that would be subject to state inspection. But state lawmakers, and one national produce association, say more stringent regulation is needed to improve the safety of fresh produce.
David Theno, a food safety expert hired by Jack in the Box in 1993 to retool its procedures, said restaurant chains should be more aggressive in getting the produce industry to take action. The first step is more testing of produce for pathogens, said Theno, now the company's senior vice president for quality and logistics. "People will say it is too expensive or that it is not practical but the meat guys said the same things in 1993 and 1994 and eventually came around," he said. Jack in the Box suppliers follow rigorous testing and employ stringent safety procedures for growing and processing produce, Theno said.
Farmers, for example, must fence their fields to prevent contamination from animal feces. They must provide bathroom facilities for workers near where produce is harvested. Bins used to hold vegetables are sanitized between uses. By the time lettuce is shredded and mixed, a single contaminated head could taint a much larger shipment, Theno said.
Few companies have honed centralization of distribution and preparation better than Taco Bell. Fifteen years ago, the chain turned its cooks into food assemblers. They no longer slice tomatoes or cook raw meat. Instead, vendors handle those tasks, and the processed food is shipped to the restaurants from a central distribution point. Workers reheat the meat and scoop it into taco shells and tortillas. They sprinkle pre-shredded lettuce and cheese over the top and throw in some pre-diced tomatoes.
The system has freed workers to focus on speed and given Taco Bell's offerings a consistency and predictability desired by consumers, Bortz said. The strategy of pushing food preparation and cooking to vendors was hailed as fast-food industry innovation, allowing the chain to shrink the size of its kitchens and open mini-stores inside gas stations. The rest of the fast-food restaurant industry has adopted many features of the Taco Bell system, speeding up the development of a sophisticated supply chain that quickly moves ingredients from farms and slaughterhouses into the mouths of millions of customers on a daily basis.
In some instances, Taco Bell's kitchen arrangement might prevent outbreaks from meat and poultry, which is cooked at the processor and then reheated at the restaurant. But it still leaves the chain vulnerable in its uncooked products --- cheese, lettuce, tomatoes, cilantro --- the items the FDA says are now the most common sources of E. coli.
Safety experts say fast-food chains need to push the produce industry to come up with treatments that do a better job of killing dangerous pathogens and to improve the way their prepared produce is packaged so that a surprise bacterial hitchhiker from the farm to the take-out window can't unleash a disaster. "The question," said Carl Winter, director of the FoodSafe Program at UC Davis, "is not if another outbreak will occur, but rather when."
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The Agribusiness Examiner #489
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By A V Krebs, Ed
Corporate Agribusiness Research Project, Mar 13, 2007
Straight to the Source
