There are plenty of outside pressures that can threaten a processor’s profits. A drastic increase in corn prices can send raw material costs soaring, or an increase in gas prices can make refueling the delivery trucks an expensive proposition. Then, there are the government regulations. A new ruling can increase the amount of paperwork or raise the costs of doing business to the point that an owner may decide to shut down the business. 

Last March, FSIS published a Draft Guidance on HACCP System Validation and asked the industry for comments. While there was plenty of confusion as to how the draft guidance could be interpreted, it seemed clear to most in the industry that FSIS was asking establishments to conduct substantially more testing than they ever had in the past, as they would not be able to rely on previously accepted scientific documentation to validate their HACCP plans. 

The American Association of Meat Processors was one of the associations that led the charge against this revision and reinterpretation of HACCP plans.

“There are several well-recognized, long-standing processes and supporting documents which, when followed, result in the production of safe meat products,” AAMP wrote in the April, 2010, issue of the Independent Processor. “Depending on the FSIS interpretation of this guidance information, the potential microbiological testing that may be required by this validation initiative would be extremely costly to all meat processors and be a specific huge financial burden for the very small and small independent processors that make a wide variety of meat products.”

AAMP President Daniel Glier, owner of Glier’s Meats Inc. in Covington, Ky., said, “If they [FSIS] do press forward, each company or small plant would have to choose a product or two that they’re going to continue to manufacture, and the rest will have to go, or a lot of them will drop out [of federal inspection] and go to retail exempt. I don’t see any other way around it.”

The second draft was supposed to be released in August, 2010, but it may now be released in the spring of this year.

Another proposal with possible widespread ramifications concerns the USDA’s Grain Inspection and Packers and Stockyards Administration (GIPSA). Among its proposed changes, a producer need not show harm to competition as part of a Packers and Stockyards lawsuit, and packers who own livestock will not be permitted to sell their livestock to another packer.

While the rule is being championed by some producer groups, trade groups like the National Cattlemen’s Beef Association and the American Meat Institute have spoken out against it repeatedly. The AMI has said that the rule would limit or eliminate any marketing agreements between packer and producer, leading to increased vertical integration and more commodity meats. Three studies commissioned by meat industry associations have pegged the loss of revenue to the industry in the hundreds of millions and the loss of jobs in the tens of thousands.

More than 60,000 comments were submitted to the USDA in regards to the proposed GIPSA changes. Colin Woodall, NCBA vice president of government affairs, said in a December, 2010, video update that the USDA will analyze those comments and do a cost-benefit analysis. The economic and legal analyses will then be sent to the White House for further review.