Beef Products Inc., BPI Technology Inc. and Freezing Machines Inc. (collectively known as BPI) are pursuing a lawsuit against ABC news and others for defamation of their beef product, lean finely textured beef.
"The lawsuit is without merit," states Jeffrey W. Schneider, Senior Vice President, ABC News. "We will contest it vigorously."
LFTB, the product reportedly dubbed "pink slime" by former USDA microbiologist Gerald Zirnstein, is simply a ground-beef product. Beef Products Inc., one of the few remaining manufacturers, says LFTB begins as a mixture of beef trimmings that is roughly half fat and half lean. It is finely ground and then spun in a centrifuge to remove most of the fat. BPI says the final mixture is 95% lean.
The primary difference between LFTB and all other ground-beef products is that LFTB is treated with ammonia gas, which turns into ammonium hydroxide when it comes in contact with moisture. The process is intended to kill microbes, such as salmonella and E coli. before products containing LFTB go to market.
Ammonium hydroxide is the same chemical compound found in household ammonia. It is a common food additive used to increase the food pH level and decrease microbial activity.
Estimated losses: $79.21 per carcass
An 800-pound beef carcass will yield 13.8% (110 pounds) of high-fat beef trimmings that contain less than 50% lean, often as low as 33% lean. In addition to the high-fat trimmings, an 800-pound carcass will also yield 9.2% (73 pounds) of 50% lean trimmings. That's 183 pounds or almost 23% of the carcass that get impacted by whipsawing beef trimming prices.
"On March 6, on the eve of the first ABC news story, the high-fat trimmings sold at 45 cents a pound," notes Don Close, Rabobank livestock analyst. "The price skidded to 5 cents a pound on May 30. The decline in high fat trimming prices took $44.92 off the carcass value."
On March 6 beef trimmings containing 50% lean sold for $1.02 per pound. By May 30, those trimmings were worth 55 cents per pound. That shaved $34.29 a head off the value of the carcass.
"The $44.92 decline in value of the high fat trimmings and the $34.29 decline in value of the 50% lean trimmings totals $79.21 per head," says Close. "That was a direct hit to packer margins, which was immediately reflected in fed cattle bids to beef producers."
Too valuable to waste
The U.S. is rapidly entering a period of the tightest beef supplies in modern history. Beef exports continue to grow, placing additional demands on a limited supply.
"The lean in higher fat content beef trimmings is simply too valuable to waste," declares Close. "That said, consumers and end users will determine the fate of LFTB, not the industry. However, the industry can take positive steps to see a return of the product to the food chain over time."
Doing so will require sustained efforts to:
* Educate consumers and inform them of the benefits of the product.
* Dispel the myths and concerns that have grown through the LFTB crisis.
* Regain trust of consumers, regulators and retailers so they can bring a replacement product to the market with confidence.