Tyson, meat industry reacts to BPI plant shutdowns

Officials at Tyson Foods released the following statement regarding BPI's suspension of operation at three plants.

"We believe it's extremely unfortunate BPI has been forced to reduce operations, given its long history for producing safe, nutritious lean beef."

"Our company is one of many beef processors that sell beef trimmings to BPI. The reduction of BPI's operations means less lean meat will be recovered and more of the beef trimmings will be converted into lower-value products. We're making some modifications in our production processes to adjust for this change. We're also making adjustments to accommodate our customers that no longer want BPI's Lean Finely Textured Beef in their ground beef."

"We'd rather not publicly speculate what today's announcement will mean financially to our company or the other beef processors doing business with BPI. We will say we believe the decrease in BPI's production will result in less lean beef available in the market and may result in higher consumer prices. Alternatively, we believe there may be an increase in the supply of some of the raw materials used to produce ground beef, and this may result in lower values that could ultimately affect livestock prices."

The controversy over lean finely textured beef has cattle and beef prices were beginning to soften from all-time highs, notes USA Today. Retail hamburger prices had increased by as much as 20 percent last year, due in part to a reduced cattle herd and a surge in U.S. beef exports.

Commodity trader Dennis Smith of Archer Financial Services in Chicago suggested Monday that the cutback in the use of the beef trimmings will make beef supplies even tighter.

"The consumer back lash from the pink slime story seems to be having a larger impact than what I'd expected," Smith said Monday. "It seems that foodservice orders have dropped severely due to consumer back lash."

Smith added "stories like this will do one thing, over time it will make beef supplies tighter and drive the cost of beef upward."

Source: Tyson Foods Inc., Foodmarket.com, USA Today

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