Originally created 04/08/04

Small meatpacker pushes for comprehensive mad cow testing



ARKANSAS CITY, Kan. -- While government regulators try to reassure Americans and international customers the U.S. meat supply is safe from mad cow disease, a fledgling Kansas meatpacker is willing to prove it.

Its survival might depend on it.

Creekstone Farms Premium Beef is one of the nation's smallest meatpacking companies. But it has set off a firestorm at the U.S. Department of Agriculture and within the cattle industry by seeking permission from regulators to privately test all the animals processed at its Arkansas City slaughterhouse for mad cow disease.

At a time when most of the world has banned imports of American beef after the discovery of a single case of mad cow disease in Washington state, Creekstone says it has assurances from Japanese customers they would accept its products - if every animal processed at the plant was tested for the brain-wasting disease.

If Creekstone receives permission from the Agriculture Department to begin such testing, and Japan begins importing Creekstone beef, the little company will have accomplished what nobody else could: reopen an Asian market to U.S. beef.

Doing so, Creekstone insists, is essential if the company and the more than 700 jobs it provides here are to survive.

The American Meat Institute, the meatpacking industry's trade association, opposes 100 percent testing, calling it an unnecessary expense not warranted by science. And to date, the Agriculture Department has not officially acted on Creekstone's request.

"This is new territory for the Department of Agriculture - and there are a lot of different issues on the table that have to be addressed," said spokeswoman Alicia Harrison.

But Creekstone's top officials, energized from recent talks with top Agriculture Department officials and a visit to Japan, are swiftly moving to ready the plant for mad cow testing.

"We may be a minority, but every person at this plant believes very strongly what we are doing is right," said Bill Fielding, the company's chief operating officer. "It is worth fighting for."

On a recent trip to Japan, Fielding said he saw the effects of the discovery of mad cow disease - known formally as bovine spongiform encephalopathy - first hand. Grocery stores hang signs above meat counters telling consumers the beef has been BSE tested, and workers wearing "Aussie Beef" aprons gave away free samples of Australian beef.

Fielding said Creekstone could start shipping meat to Japan within two weeks of getting USDA permission.

While they wait, the company is working with Kansas State University to set up a lab that would conduct the testing at the Arkansas City plant.

The plant, which processes 1,000 head of cattle a day, is among the nation's smallest. Industry leader Tyson Foods Inc., for example, processes 30,000 cattle a day at its slaughterhouses.

The major packers such as Tyson don't just have size on their side; their pork and chicken businesses have bolstered sagging beef profits, and some have beef packing plants outside the United States, Fielding said.

Fielding fears if the ban on exports forces small packers like Creekstone out of business, the result with be further consolidation in an industry that is already top-heavy. Eighty percent of the beef this country eats comes from four meatpackers.

"On one hand the government has always tried to at least limit the amount of consolidation," Fielding said. "But in this case it is playing right into the hands of the big packers and it will be at the expense of the cattle producer as an end result."

The Arkansas City plant has already survived one brush with bankruptcy. Just seven months after it was opened by Future Beef Operations, the Colorado-based company filed for bankruptcy and by 2002, 900 workers were without jobs.

The next January, Creekstone - a company founded in 1995 by a Kentucky farming couple with just 37 head of purebred Black Angus cattle - bought the plant to produce its own brand-name beef products.

Slaughter manager Brad Reed hired as many former Future Beef workers as he could find; as many as 75 percent of Creekstone's workers are former employees. By May 2003, the plant was in full production, with as many as 780 employees at its peak. Seven months later, the mad cow case slammed shut beef export markets.

For Creekstone, which exports as much as 25 percent of its brand-name beef, the loss of those markets was devastating. For example, beef tongue that once sold for $5 a pound now barely gets $1.80 a pound in the domestic marketplace. The company laid off 45 workers and cut the hours of nearly everybody else as it shut down production lines to three or four days a week.

"It is hard to cut back any more than we have," Fielding said. "It is a matter of whether we can survive."

On the Net:

Creekstone Farms: http://www.creekstonefarmspremiumbeef.com



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