Creekstone Farms wants to put beef to the test
Dec. 13, 2006
Amy Bickel
The Hutchinson News
It seems average enough -- a small town amid Kansas' rural landscape, surrounded by hills, pastures and cropland.
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| Gary Westbrook removes the spinal cord on an Angus beef carcass as it is processed at the Creekstone Farms processing plant in Arkansas City. Sandra J. Milburn/The Hutchinson News |
It's the hometown of a Kansas governor and a high school state championship baseball team.
But far from average, Arkansas City's largest employer has thrust the city, population 11,500, into the national spotlight through a legal battle with the federal government.
Creekstone Farms, a small specialty processor, churns out premium Angus steaks and beef products sold at groceries and upscale restaurants nationally and internationally.
After the first U.S. case of mad cow disease was discovered in Washington state, rocking the nation's beef industry in 2003, Creekstone officials decided the best thing to do was give in to the wishes of its international customers and test all cattle for the brain-wasting illness.
Concerns were huge -- Japan, the nation's top foreign buyer, was banning U.S. beef as a result of the Washington case.
Creekstone spent $500,000 to build a mad-cow testing lab, installing state-of-the-art equipment. The money invested, they believed, would come back when they secured Japanese buyers again.
Today, however, that lab sits empty. The only activity comes from workers processing carcasses in the next room.
Creekstone officials never figured their own government's Agriculture Department would keep them from testing -- the agency backing its opinion with an early 20th-century law.
"We're not saying U.S. beef is unsafe," said Creekstone founder John Stewart, who retired as chief executive officer in October. "We are looking at (testing) as a feature element for our program that would allow us to do more business."
He's pleaded his case to everyone from Washington congressional leaders to the national media -- voicing his concerns through National Public Radio, the Washington Post and USA Today.
With no budging from the USDA, Stewart decided to let the courts decide. Last March, Creekstone sued the agency for the right to test all animals for mad cow, or bovine spongiform encephalopathy.
"A lot of people would choose BSE-tested over other products," he said. "I know they would."
The mad cow threat
In all, the nation has had three cases of mad cow disease, two in U.S.-born cattle.
Researchers say the disease is spread when cattle eat meal containing spinal or brain tissue from an infected animal. Humans can develop a related fatal illness from eating tainted meat.
Japan has had 29 confirmed cases since the first report in 2001. To help ease consumer worry, Japan tests every animal for the disease.
Wanting to regain that closed market, Stewart announced the company would test all cattle slaughtered at its plant for mad cow. But the announcement caused uproar at the USDA. Stewart said one official even threatened to have him arrested if such testing occurred.
The agency said its authority comes from the Virus Serum Toxins Act of 1913, which helped stop con artists from selling bogus hog cholera serum to pig farmers.
Joe Bill Meng, Creekstone's vice president of animal science, health and welfare, said the USDA backs the four big packers -- including Tyson, Cargill Meat Solutions and National Beef -- that make up about 80 percent of the national market. They fear Creekstone's actions would cause them to test every animal, also.
While the USDA remains understanding toward Creekstone's plight, agency officials say, they claim to mainly be concerned about small business.
"It would actually be harmful to the little guys who couldn't afford to do the testing," said USDA spokeswoman Terri Teuber. "There is no scientific basis to test."
Researchers say mad cow typically develops in animals 30 months or older. U.S. processors slaughter cattle for food below that age.
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| Joe bill Meng, vice president of animal science at Creekstone Farms, talks about the letter J that is stamped on carcasses to be sent to Japan. |
The USDA randomly tests older animals for the illness, Teuber said.
As part of its two-year enhanced surveillance program, the USDA tested nearly 800,000 animals for mad cow. The agency since scaled back testing to 40,000 animals a year -- less than 1 percent of the 35 million head sent to U.S. slaughter plants.
Meanwhile, Teuber said, Japan opened its borders earlier this year to U.S. beef under 21 months of age.
"You have to wonder what the value would be," she said of why Creekstone would test.
Keeping cattle calm
About 830 workers arrive each day at Creekstone, where they process more than 1,050 head of black Angus cattle.
In all, the company processes roughly 250,000 cows a year with about 25 percent considered all natural -- free of antibiotics and hormones -- as well as traceable to each animal's place of origin, Creekstone's Meng said.
The fledgling company, which makes up less than 1 percent of the national market, purchased the plant from Future Beef in January 2003 at a bankruptcy auction.
Changes have been made to the plant. From the outside, the 450,000-square-foot building doesn't look or smell of a traditional processor. The entire operation is contained amid the plant walls, including the holding pens, designed by renowned autistic animal behavior specialist Temple Grandin, to keep the waiting cattle calm, he said.
The plant reopened under Creekstone about six months before the first BSE case.
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| The holding pens at Creekstone Farms were designed by animal behavior specialists Temple Grandin so the animals would feel calms and comfortable. |
Creekstone, which exported about a third of its beef at the time, lost customers, including Japan. By Christmas 2004, the company had laid off 150 workers because of the faltering international markets.
Exports to Japan in 2003 -- then the nation's top beef buyer -- totaled $1.4 billion, according to the U.S. Meat Export Federation. Japan imported $175.1 million worth of Kansas beef.
Currently, Creekstone's situation is better, with employment numbers up and domestic and international markets expanding. The company now is one of just five plants approved to ship to the European Union.
Unlike a year ago, many of the carcasses that hang in a cold locker are stamped with a J -- meaning the carcasses meet guidelines for shipment to Japan.
At present, Creekstone ships 15 percent of its product overseas.
"But we need to export 30-plus percent," Meng said.
Meng said regaining South Korea's market, also lost to a ban, would boost Creekstone's production by another 1,000 animals a week.
Last month, South Korea suspended imports from Creekstone because authorities there said they found a bone fragment in boneless beef. The move was criticized by Agriculture Secretary Mike Johanns, who said the find didn't represent "a threat to anyone," the Associated Press reported.
Creekstone spokesman Kevin Pentz declined to comment on the situation.
The value of testing
Creekstone's lawsuit has groups across the nation weighing in on both sides of the topic.
Industry trade group American Meat Institute criticized Creekstone's plans. The National Cattlemen's Beef Association doesn't back 100 percent testing and the Kansas Livestock Association has said testing every animal could harm the industry, including cow/calf producers.
Concerns include fears that testing costs would be passed on to the producer. Creekstone's Stewart, however, said that wouldn't happen.
In all, testing probably would cost the company around $11 or $12 an animal, he said, which would be reflected on the grocery store price tag.
"Testing for BSE allows us to increase the value of our product," he said. "We know for a fact that Japanese consumers are asking, and others are asking for tested beef, and they are willing to pay for it."
But the USDA's reasoning, said Kansas State University livestock marketing specialist Jim Mintert, is that saying an animal under 30 months is BSE-free is a false claim.
"If you let that same animal live another 12 months or 18 months, that same animal at an older age might test positive," he said, adding that the industry should make only the claims that can be proven.
Among those supporting Creekstone is University of Kansas anthropology professor Don Stull, who has studied and written books on the meatpacking industry.
"My own personal feeling, if Creekstone wants to do it, why not?" said Stull, who added that if Creekstone wins the lawsuit, it could significantly influence the way the industry operates.
The decision, however, is up to the U.S. District Court in Washington, D.C., which has received pretrial motions in the case, including a pending request for summary judgment filed by Creekstone Farms.
A final brief from USDA on the motion is due to be submitted by Friday.
