Friday, February 29, 2008

Visualizing 143,000,000 pounds of ground beef

When we talked earlier this week about the largest food recall in US history -- that of 143 million pounds of ground beef from Westland/Hallmark in southern California -- my focus was on the true cost of food. But here's another thing to consider. If most of this beef hadn't already been served up at fast food restaurants and school lunch programs all around the US, the task of recalling it would be monumentally expensive. A big recall has already put one processor out of business in recent months.

But anyway, let's consider the logistics of recalling 143,000,000 pounds -- or 71,500 tons -- of ground beef. A semi-trailer can carry a load of about 45,000 pounds, or 22.5 tons. If we assumed that the entire cargo of a semi was just ground beef -- that is, no packaging, pallets, etc. it would take 3,178 semis to carry the beef. A typical truck and trailer is about 70 feet long, so if you lined them up bumper to dock lock, you'd have a string of trucks a little more than 42 miles long.

Of course, the hamburger was shipped in 40 and 50-pound cartons on pallets, so figure that there'd be another 15 to 20 percent of packaging weight, and add that to the line and you start to get a line of semis about 50 miles long.

And I don't know enough about logistics and shipping to know whether ground beef in boxes on skids is a cargo that can use up a truck's weight limit before running out of space.

But we don't really need to worry about a 50-mile long string of tractor-trailers pulling up to the Westland/Hallmark plant because, after all, most of the meat that was recalled has already been eaten.

But clearly the logistics have become an issue. In an interview on Vermont Public Radio last week, the director of food service for the Ferrisburg Public Schools said she was still awaiting instructions on what to do with the cases of beef that have been sitting in her freezers on hold since Jan. 31, when the USDA first issued a warning against using the beef.

Thursday, February 28, 2008

Too expensive to burn?

Cargill announced yesterday that it is canceling plans to build an ethanol plant outside Topeka, Kansas. The basic reason is that corn is now to expensive to use a feed stock for ethanol production, in Cargill's estimation.

Corn closed at $5.25 per bushel on the Chicago Board of Trade -- and I can remember a year ago lamb feeders in the midwest saying that they couldn't afford to feed lambs corn that cost $3.50 a bushel.

So whither corn? Is the irrational exuberance out of the marketplace yet? How will the federal government meet the conflicting goals of increased ethanol use, improved land conservation practices, and cheap food? Is this just a ploy by Cargill to try to put some downward pressure on the price of corn? Cargill is, essentially, in the business of adding value to corn by making it into various products from pork to ethanol to high fructose corn syrup -- if its basic raw material is too expensive and it can dial back perceived demand just a bit, perhaps production won't trail off, but prices will?

The timing of the announcement makes one wonder about this. Nearly all the major corn production for 2008 is pretty well locked in. Seed and fertilizer has been ordered and in some cases paid for. Land has been leased, removed from CRP plans, or otherwise committed to production. And Cargill looks at its Topeka plans and says, "Eh? Maybe not." It also mentioned that it has not made any decisions about three other plants that it has on the drawing boards.

For a company like Cargill, used to controlling absolutely everything in a "vertically integrated" supply and production system, it must be maddening to not be able to precisely control the cost of corn, when so much of their business model depends on it. But perhaps, just perhaps, it has figured out a way.

Wednesday, February 27, 2008

Speaking of the Valdez

Exxon Mobil is currently fighting a judgment against it in the Valdez case. It doesn't want to pay $2.5 billion in punitive damages. Sounds like a lot of money. But it's just shy of 9 days' earnings for them.

This is the world's smallest violin ...

Punitive damages are meant to punish and deter bad behavior, such as putting a relapsed alcoholic at the helm of a supertanker plying the waters of an extremely sensitive ecosystem. Hard to see how such chump change is going to make Exxon Mobil think twice about anything.

Monday, February 18, 2008

The further cost of cheap food

The largest food recall in US history has just taken place. Officials at the Westland/Hallmark meat packing plant were recently ordered to recall 143 million pounds of ground beef, some 37 million of which were sold to the the federal school lunch program, and which, officials acknowledge, has mostly already been eaten.

The recall, which covers meat dating back to February 2006, is due to the fact that non-ambulatory cattle may have entered the food chain in violation of food safety laws. At the same time, two employees of the Southern California slaughterhouse are charged with criminal animal cruelty for the way they handled these so-called downer cows.

Say what you will about the Humane Society of the US -- they are a crooked bunch -- but they managed to get their hands on some incredibly damning video shot at the plant. It showed two workers using a forklift to shove, prod, and lift down cattle out the way. They were also captured on tape pulling down cattle around by one leg over manure-soaked concrete yards, using a shock prod repeatedly on cattle that could not stand, and turning a high-pressure hose on a down cow.

Westland/Hallmark appears to be trying to pass this off as a couple of bad employees in an otherwise good plant. In a statement on the company's website, president Steve Mendell defended his company's record on the humane treatment of animals entering the plant.

"Words cannot accurately express how shocked and horrified I was at the depictions contained on the video that was taken by an individual who worked at our facility from October 3 thru November 14, 2007," Mendell said in the statement. "We have taken swift action regarding the two employees identified on the video and have already implemented aggressive measures to ensure all employees follow our humane handling policies and procedures. We are also cooperating with the USDA investigators on the allegations of inhumane handling treatment which is a serious breech of our company’s policies and training."

Both employees were fired.

Mendell went on to defend his company's food safety compliance thus: "Finally, I proudly assure our customers that we comply with all USDA requirements, including the requirement that only ambulatory livestock may enter the harvest facility to be processed for human food. I am confident that we have met this high regulatory standard."

The reason the meat was recalled and the plant shut down was because since 2006 there has been a ban on downer cattle entering the human food chain. Apparently the animals in question in this case were cleared for slaughter by the USDA inspector on site, but at some point between that clearance and their slaughter they became non-ambulatory. The regulations require that the inspector be notified and the animal re-inspected. That didn't happen in this case.

I don't know very much about Westland/Hallmark, but it appears from the video to be a plant that specialized in what are known as cull cows -- dairy cow that are being sold for meat for one reason or another. There are more and more of this kind of cow entering the market these days because, with milk prices at record highs, dairy farms are attempting to push cattle for higher and higher levels of production. Some of the large factory dairy farms are now averaging just one lactation per cow before some major system fails and she has to be sent off as a cull.

Typically cull cows are a source of hamburger. Their milk production keeps the level of finish or fat very low in their meat, making it less desirable for steaks and roasts. In the industrial food system, this source of lean meat is desirable because it can be sold as is -- ever buy "diet lean" hamburger? -- or mixed with cheap suet to make any grade of hamburger.

But hamburger production is a high-volume, low-margin business. All the meat must be removed from those dairy cattle's bones more or less by hand. There's tremendous pressure to move product through the system. Hundreds if not thousands of cattle are slaughtered every day at a plant like the one where these atrocities took place. Downer cattle are, at the very least, a bother, and at worst, might mean that someone's quota gets missed.

Plants like the Westland/Hallmark slaughterhouse can't exist without a large supply of cattle within a reasonable shipping distance. With the concentration of dairy in the irrigated areas of Southern California, plants like this one become not only possible, but virtually a necessity. When a single dairy farm is milking thousands of cows -- even tens of thousands in some cases -- there will be a certain number that will leave the farm every day.

On the alter of cheap milk, we sacrifice cows as we push them for maximum production. When they break down, we ship them off for hamburger to a plant where, in the name of cheap hamburger, we sacrifice our humanity. It's all very carefully kept out of sight and out of mind. Neither of these businesses would be possible without the artificially environment of irrigated cropland in the arid and semi-arid regions of California -- an environment made possible by taxpayer subsidized irrigation schemes and crop programs.

So what can you do? If you don't have one already, buy a freezer. Find a local source for your meat. Talk to the farmer or rancher who raises the animals, and order a half or a quarter of a steer. Talk to them about where and how their animals are slaughtered, and how they're handled and raised. Pay a little bit more for your meat if you have to. It's a small price to pay for your humanity.

Tuesday, February 12, 2008

The end of cheap food?

On the NPR call-in show "On Point" today, the topic was increasing
food prices. Host Tom Ashbrook had an agricultural economist on,
talking about the factors that are driving up food prices. In his
intro, Ashbrook talked about the rising theft of pigs in China,
tortilla riots in Mexico, and increased milk prices here in the US.
As possible causes, he mentioned the ethanol boom, and said - among
other things - that "farmers are sitting pretty on high prices."

Well Tom, let me give you an idea of what "sitting pretty" looks like
to this American farmer. It looks like all the small dairy farms in
my neck of the woods have been run out of business or gobbled up by
larger neighbors. Those larger neighbors are pulling in record
amounts of money for their milk this year - two years ago, the prices
were at an all time low. And despite the fact that prices are now at
historic highs, most of them aren't making very much more money than
they do when milk prices are "normal," because the cost of grain to
feed the cows, fuel to plant and harvest hay and other fodder and the
fertilizer to grow it have all skyrocketed in the last few years.

In the fall of 2004, I could buy a 21-ton tractor-trailer load of
shelled corn delivered to my farm (then located in Amherst, Mass.)
for $2,520, or $120/ton. Today, that same delivery would cost me
$4,095, or $195/ton. So in three years, the cost of corn delivered to
a farm in central New England has increased 60 percent, or 20 percent
per year at a time when the general inflation rate has been about 3
percent. Those damn Iowa farmers must be making a killing, right?

Nope. They're not the ones making it. Food and Water Watch Policy
Analyst Patrick Woodall points out these facts. "In 1980, the
farmgate price for corn was $2.70 and a new Ford Mustang cost about
$6,000. Today, the base model Mustang runs about $19,000 and corn is
selling for as much as $3.70 - meaning the price of Mustangs more
than tripled and the price of corn increased by a little more than a
third," said Woodall.

See Food and Water Watch's press release for further analysis of the lack of relationship between historical
corn prices and the prices of consumer goods, including groceries.

So who is making the money? Where's it going? What's driving the cost
of food through the roof? Well, we might consider looking at Exxon
Mobil's record year that just went into the books.

Exxon Mobil's record profits

That's right. The folks who brought you the Valdez earned a record 40
billion, 610 million dollars last year. In round figures.
$40,610,000,000. That's a net profit of $3,219.34 per second, 24
hours a day, seven days a week, 365 days a year.

To be honest, I think that pretty much ends the mystery of where our
food dollar is going. Over the years, partly because of government
planning and partly because of simple economics, the US and to a
lesser extent the world's food system has become concentrated. We
have a corn belt, which is widely known and recognized. But we also
have a dairy belt, a wheat belt, a beef belt, a sugar belt, a cotton
belt - you name, we've got a belt for it. Production of agricultural
products is concentrated in specific parts of the country where they
grow best, can be processed easily, or simply because there weren't
enough people around to object (note the concentration of beef
feedlots in the rural west).

The whole system is based on transporting commodities from where they
are grown to where they are needed - either for direct consumption or
for processing into other products.

In real terms, the farmer who grew that corn I bought in 2004 and the
one growing it today were paid about the same amount for their
efforts. After all, farm gate prices aren't what really matters: farm
profit is. The increases in cost incurred at my farm, and the
increase at the farm gate, are nearly all due to the increased cost
of energy.

Energy is expended to plow the land for the corn. Energy is expended
to fertilize the ground (commercial fertilizer is, essentially, a
petrochemical). Energy is expended to harvest, and dry the corn. Then
it's loaded into rail cars, which expend energy transporting it to
New England, where a grain company loads it into trucks and expends
energy getting it to the farm where it's loaded into my bin.

At every turn, Exxon Mobil and the other oil companies are making
record profits. No one else along the chain of custody is getting
rich, let me assure you.

So, what sitting pretty looks like to this farmer is pretty much what
it looks like to the soccer mom filling up her minivan or the road
warrior pumping gas into his SUV: shoveling dollars into the coffers
of oil companies.

What can be done? I can only really think of one thing. We have to
get used to paying what it really costs to get our food grown,
processed, and delivered to us. That might mean that suddenly the
small-scale production of grains, considered inefficient in the days
when a gallon of diesel cost less than $1, will suddenly start to
look more and more efficient. It won't make Vermont wheat any less
expensive, but perhaps it will be competitive with the $10/bu wheat
in Kansas that then has to make a 2,000 mile trip to Vermont.

It almost certainly means that there will be less and less grain-fed
meat around. Lambs, being a relatively poor converter of grain to
flesh when compared with pigs or poultry, will be one of the first
food animals to stop making a trip to the feedlot.

For the take of an industry watcher who has seldom been far off the
mark, see Stan Potratz's column. He's
predicting that more and more lambs will be marketed directly off
grass. This will take a new kind of sheep. The animals at the core of
the sheep industry have been selected as a means of adding value to
grain for so many years that they have become poor converters of
forage. Fortunately, the sheep industry has seen very little the sort
of vertical integration that has made pork and poultry production so
"efficient," so the right kinds of sheep are out there. But they are
in short supply.

Anyway, Tom Ashbook, none of us farmers are "sitting pretty" on our
high prices. If we even actually have them. We're struggling to get
by as usual, paying big money to big companies for things that we
must have in order to put food on your table.

You're welcome, by the way.