How American Beef Producers Undermined Their Own Credibility
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Holmes Report

How American Beef Producers Undermined Their Own Credibility

It’s almost as if American cattlemen looked at the catastrophic events in the U.K. and decided to ignore every lesson while duplicating—and if possible exacerbating—every mistake.

Paul Holmes

More than a decade has passed since an epidemic of bovine spongiform encephalopathy, better known as mad cow disease, ravaged British beef and dairy herds, so it’s fair to say American cattlemen have had every opportunity to study that outbreak and learn from it. Yet to say the industry failed to learn would be an understatement. It’s almost as if American cattlemen looked at the catastrophic events in the U.K. and decided to ignore every lesson while duplicating—and if possible exacerbating—every mistake.

Last year, the American beef industry spent millions of dollars in lobbying fees and campaign donations to ensure that when mad cow disease eventually showed up on these shores, consumer confidence—and more importantly, the confidence of our trading partners—in the safety of U.S. beef would be as low as possible. Has any industry ever gone to such extraordinary lengths to undermine its own credibility?

The industry could have insured itself against devastating market loss relatively cheaply—the whining and wailing of its representatives in Washington notwithstanding. It could have accepted safety measures that cattle producers in Europe and Japan have found tolerable. It could have gone beyond the bare minimum necessary to protect consumers, and not incidentally, its own reputation. Instead, it chose to fight every new consumer safety measure, so that when the first case of mad cow disease was discovered last week, the industry was exposed and vulnerable.

The impact on the $3 billion-a-year beef export business was swift and devastating. Japan, which bought more than $1 billion of U.S. beef last year, was one of more than two dozen nations that suspended imports. Among the other countries that banned U.S. beef are Argentina, Australia, Brazil, China, Mexico, Russia, South Africa, South Korea, Thailand, and Vietnam. Two weeks later, despite intense lobbying by U.S trade officials, not one of those countries had lifted its ban on U.S. beef. In Chicago, meanwhile, cattle futures fell by the maximum allowable amount for three consecutive days.

The industry’s ability to fight back, and particularly its ability to win back the confidence of its overseas trading partners, will now depend on its ability to accept the unthinkable—that strong, strictly enforced regulatory policies are essential to its survival, that its critics knew more about what was best for the industry than its so-called leaders did.

Bovine spongiform encephalopathy (BSE), has been linked to a variant of Creutzfeldt-Jakob Disease, a disease that affects the human brain. The disease causes holes to form in the brains of its victims, leading to a loss of coordination and eventually death. People can contract a form of the disease known as variant Creutzfeldt-Jakob disease, by eating contaminated beef products, especially brain and spinal-cord tissue. First diagnosed in Britain in 1986, BSE was found in 178,000 British cattle and resulted in the destruction of 3.7 million animals, costing British farmers billions of pounds as countries around the world banned British beef.

For years, the American beef industry was fond of dismissing its critics with the argument that there had never been a case of mad cow disease in the United States. Of course, until the Challenger disaster there had never been a space shuttle explosion and until September 11 no one had ever flown a plane into a New York skyscraper. The assumption that America should be immune to mad cow disease was born of arrogance, and its folly became apparent on December 22, when officials from the U.S. Department of Agriculture announced that a slaughtered cow in Moses Lake, Washington, had tested positive for the disease.

It’s unlikely that the beef industry genuinely believed it would remain untouched by a disease that has struck in several other regions around the world—including some where the industry is far better regulated than it is here in the United States. Perhaps industry leaders chose to believe that scientists who warned of a threat were simply mistaken, or pursuing some radical political agenda.

But even if the agribusiness CEOs and the cattlemen believed they were safe from mad cow disease, they might have recognized that the warnings from the scientific community would alarm the public, causing at least some to turn away from beef. They could have taken actions that would have reduced that level of alarm. But they chose the opposite approach: after Oprah Winfrey interviewed a concerned expert and expressed her own misgivings about the safety of the nation’s beef, Texas cattlemen sued her under a ludicrous—and unconstitutional—food disparagement law. By attempting to silence its critics rather than debate them in public, the industry fueled the suspicion that it had something to hide—especially since it lost its case.

Beyond that, one could argue that senior executives have a responsibility to base their decisions not on what they believe will happen, but on what could happen—an extra degree of caution that seems particularly appropriate for those charged with safeguarding the nation’s food supply. Hope, as they say, is not a strategy.

Of course, it’s possible that the industry recognized the risk, but believed the cost of a mad cow outbreak in the United States would be lower (in financial terms) than the cost of accepting regulation. Critics of corporate America assume that this kind of cynical cost-benefit analysis—it’s worth putting a few dozen lives at risk in order to safeguard higher profits—takes place every day. That assumption is given additional credibility by some free-market advocates, who make the case that expensive regulation reduces profitability, which costs jobs, which causes pain and suffering that may ultimately have a societal cost that outweighs the loss of life because of less stringent regulation.

Perhaps the industry believed that the discovery of a single case of mad cow would not seriously impact American beef exports. If so, the industry was hoping for better treatment than it gave others. When a single incident of the disease was discovered in Canada earlier this year, the National Cattlemen’s Beef Association “applaud[ed] the swift action taken by the U.S. Department of Agriculture to comply with existing BSE regulations and stop all cattle, beef, sheep and goat imports from Canada until further notice.”

But echoing the industry line, the USDA’s chief veterinary officer, Dr. Ron DeHaven, said last week that trade restrictions being imposed on American beef “are not well-founded in science,” claiming that most meat cuts are safe from infection. Interestingly, a quick search of the media coverage surrounding the Canadian case and subsequent import ban found no similar comments from Dr. DeHaven decrying U.S. government policy.

But let’s assume for a moment that the industry is correct, that the disease is carried only by the spinal cord and not by muscle tissue, and that muscle tissue is not contaminated with spinal cord matter during the slaughtering process (which involves sawing the spinal cord in half, a procedure some critics believe can result in splattering). If so, the industry’s message is not exactly reassuring: “We believe we’ve done just enough to keep consumer safe, without inconveniencing our members or sacrificing any of our precious profits.”

The National Cattlemen’s Beef Association kept up the “all is well” tone in a press release issued on December 23. The release explained that the organization has “has fully supported an aggressive surveillance program in the U.S. to assure that if BSE were introduced it would be detected and eliminated” and urged consumers to “continue to eat beef with confidence. All scientific studies show that the BSE infectious agent has never been found in beef muscle meat or milk and U.S. beef remains safe to eat.” There was no hint that the organization would take or support any additional safeguards the might prevent future incidents.

A second release, issued on December 26, was almost surreal in its denial. “The U.S. beef industry has worked tirelessly to put effective preventive measures into place to protect our animals’ health and the health of our consumers,” according to Terry Stokes, NCBA chief executive, who cited an import ban (ironic, given that the industry is furious at countries that do not wish to import American cattle in the wake of recent discoveries), a surveillance program and a feed ban.

But at least the industry voiced its support for some new measures to safeguard the meat supply. Said Stokes, “As an additional precaution, we are requesting USDA put into place a ‘test and hold’ procedure that would require any animal tested for BSE to be held and not further processed until test results are received.  While specified risk material from non-ambulatory animals are removed from the human food supply and meat does not carry the infective agent, this precautionary measure would give consumers additional confidence in the safety of the food supply.”

Understandably, the release failed to make it clear that the industry had opposed both the testing of so-called “downer animals”—those too sick to walk—before slaughtering and processing for consumption, and the “test and hold” procedure. As a result of the industry’s opposition to such procedures, the animal that came down with mad cow disease had already been made into hamburger and probably eaten before the U.S. Department of Agriculture received the relevant test results. (Both the industry and the USDA say there is no serious risk to human health, because the central nervous tissue of the cow, which carries the disease, did not go into the food supply.)

Government officials, meanwhile, were using perhaps the least effective public relations ploy available to them. White House spokesman Scott McClellan said President Bush had been eating beef, and U.S. Department of Agriculture secretary Ann Veneman said she’d serve it for Christmas.  In the early days of the mad cow epidemic in the U.K., British agriculture secretary John Gummer was pilloried in the press for the same approach after he tried to feed hamburger to his four-year-old daughter at a media event. The child refused the burger, and Gummer ended up eating it himself. In any event, if Veneman wants to make a dramatic gesture, she should eat the meat from an infected cow, if she and her colleagues at the NCBA are so convinced that it’s safe.

But perhaps she has been listening to scientific experts like Stanley Prusiner, the University of California, San Francisco, researcher who won a Nobel Prize in 1997 for his work on the malformed prion proteins linked to mad-cow and related ailments. “They are making these sweeping statements for which they don’t have the data,” says Pruisner, who two years ago discovered the prion proteins in the muscles of mice infected with a mad-cow type disease—a discovery since duplicated by several other researchers—and who believes the discovery of mad-cow prions in beef cuts is inevitable.

Meanwhile, the most ironic comment of the entire episode so far was delivered by White House spokeswoman Suzy DeFrancis, who assured reporters, “Sound science has been a principle for this administration, and that is what the USDA is basing its answers on.” Lest anyone be reassured by that claim, let us remember that the administration is so committed to sound science continues to defy the consensus on global warming, effectively banned stem cell research, and would like to see creationism taught alongside evolution in the nation’s schools.

Consumers, apparently, have responded to the news coverage without panic. Most early reports suggest little or no decline in beef consumption. Walt Riker, vice president of corporate communications and media relations for McDonald’s, told reporters that in the first few days of the crisis, “there has been no impact on sales” at the company’s restaurants. “Of course, we've been watching not just the volume of our sales but the specific McDonald’s products being sold, and we’ve noticed no reduction in the beef product being purchased.”

So industry representatives reserved their ire for the media, who insisted on covering the outbreak despite its insignificance.

Chandler Keys, the NCBA’s vice president of public policy, responded angrily to television ill or downed cattle. “That B-roll we’re watching is from England,” he said angrily. “Those are not U.S. animals. That is B-roll from the epidemic—and I stress the word epidemic—that the Europeans found themselves in.” It is not known whether the NCBA supplied television stations with B-roll of sick or downed American cattle to use in place of that footage, or whether sick and downed American cattle are significantly more attractive than their British counterparts.

But eventually the reaction of trading partners—presumably better informed about the real risk from mad cow than U.S. consumers—has forced the government and industry to take action.

In November, the Bush administration, at the urging of the dairy and cattle industries, lobbied successfully to kill legislation that would have banned the slaughtering of downer cattle for human consumption. The industry and the administration claimed such a ban—which would involve an estimated 130,000 out of the 35 million U.S. cattle slaughtered each year—would have been prohibitively expensive.

The beef lobby is one of the most influential in the nation. It is a huge source of campaign money for those who sit on the agriculture committees, and it has an unusually cozy relationship with those charged with regulating its actions. (In a role that must create numerous conflicts, the USDA is responsible for promoting beef as well as overseeing its safety.)

A review of campaign donations conducted by the Associated Press, the dairy industry contributed money to 33 of the 51 members of the House Agriculture Committee, and 28 of those 33 members voted to allow the industry to continue marketing downed animals. “It’s clear that the dairy industry has very much influenced the action of key members of Congress,” says Gary Bauston, president of the animal rights group Farm Sanctuary. “In light of this recent discovery, we hope that members of Congress will serve the public interest instead of the shortsighted interests of agribusiness.”

Meanwhile, Alisa Harrison, spokeswoman for Veneman, was previously director of public relations for the NCBA. Says Eric Schlosser, author of Fast Food Nation, “Harrison may well be a decent and sincere person who feels she has the public’s best interest at heart. Nonetheless, her effortless transition from the cattlemen’s lobby to the Agriculture Department is a fine symbol of all that is wrong with America’s food safety system. Right now you’d have a hard time finding a federal agency more completely dominated by the industry it was created to regulate.” Dale Moore, Veneman’s chief of staff, was previously the chief lobbyist for the cattlemen’s association.

When the USDA switched its position a week after the discovery of mad cow disease in Washington state, it said the cost of the ban on marketing downer animals would be minimal, and that it would not raise prices to consumers—a comment that was not challenged by the NCBA. The association’s reaction raises the question of whether industry had been exaggerating the potential cost of stricter regulation in order to avoid the inconvenience.

What seems certain is that the industry’s opposition to those new regulations two months ago is costing it millions—perhaps billions—today.

“I said on the floor of the House that you will rue the day that because of the greed of the industry to make a few extra pennies from 130,000 head, the industry would sacrifice the safety of the American people,” said Rep. Gary Ackerman (D-NY), chief House sponsor of the provision. ”The amount of money farmers would have lost euthanizing these poor, wretched animals, they lost the other day in five minutes.”

The Humane Society of the United States had similarly warned that if the meat from a lone cow with the brain-wasting disease found its way into the food supply, other countries would cut off U.S. beef imports and consumer confidence would be shaken. The temptation to stand outside the NCBA’s headquarters yelling, “We told you so” must be overwhelming.

Almost as certain is that industry will need to go even further if it is to restore overseas confidence in American beef.

The NCBA’s claim that the American beef supply is “the safest in the world” seems absurd when regulations are so much more lax here than they are in other developed countries. The European Union, for example, requires testing of all cows more than 30 months old. In Japan, meanwhile, authorities test all cattle bound for slaughter, regardless of age. Japan also requires testing whenever a cow that is 24 months or older dies, whatever the cause, and mandates the incineration of meat and bone meal, as well as parts of the cow such as brain and spinal cord that carry a higher risk of transmitting the disease. Last year, those tests turned up two infected cows that would have slipped through most other screening systems—one 23 months old and the other 21 months old.

In the U.S., only 10 percent of downer cattle—those most at risk—are tested, and the government allows the meatpacking industry to slaughter those animals and to sell their meat long before the results of those tests become available. The infected cow from Washington was a downer, slaughtered on December 9. The animal’s positive test result came back on December 22, by which time meat from the cow had entered the food supply and almost certainly been consumer.

There are equally troubling questions about whether enough is being done to prevent the spread of the disease through animal feed.

According to activist John Stauber, who was pilloried by the industry for his suggestion that mad-cow disease would one day rear its ugly head in this country, “Veneman and her advisors should institute a complete and total ban on feeding any slaughterhouse waste to livestock. You may think this is already the case because that’s what industry and government said they did back in the summer of 1997. But beside the cattle blood being legally fed back to cattle, billions of pounds of rendered fat, blood meal, meat and bone meal from pigs and poultry are rendered and fed to cattle, and cattle are rendered and fed to other food species, a perfect environment for spreading and amplifying mad cow disease and even for creating new strains of the disease.”

The USDA’s own survey found that 35 percent of product samples tested in 2002 contained “unacceptable nervous tissues.”

The current ban still allows the feeding of cattle blood to young calves, a practice Nobel laureate Prusiner calls “a really stupid idea.” And in any case, enforcement has been lax. A 2001 study by the Government Accounting Office found that one-fifth of American feed and rendering companies that handle prohibited material had no systems in place to prevent the contamination of cattle feed. More than a quarter of feed manufacturers in Colorado, one of the top beef-producing states, were not even aware of measures to prevent mad cow disease, four years after their introduction.

Finally, there are questions about the U.S. system for tracking cattle. As of this weekend, two full weeks after the positive test was announced, the USDA had found only 11 of the 82 cows from the Alberta herd that was shipped into Washington in September 2001. Since the Japanese government has indicated it will not resume imports of American beef until the source of the disease has been identified, finding those cows is a matter of some urgency.

When an industry is faced with new regulations, its reaction is almost always to fight them. Regulations after all, are a pain in the neck, and they can be costly—although rarely as costly as industry claims when it is trying to avoid them. But regulations are also a phenomenally powerful source of trust. One reason biotechnology, for example, is better accepted in the U.S. than in Europe is that Americans, for the most part, trust their regulators, and therefore trust the industries they regulate.

But trust is a fragile commodity, and when industries lobby for laxer regulation, they must take into account the consequent strain they place on consumer trust. In this case, it seems clear that if the beef producers and slaughterhouses and marketers had accepted oversight similar to that in other developed countries, it would have been far better placed to withstand the scrutiny that followed the discover of a single case of mad cow disease, to expect and receive the confidence of its largest customers.

In weighing the costs and benefits of regulation, however, it seems that the high price of restoring lost trust never entered the equation.

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