SEMA_________________________________

SOUTHEASTERN MEAT ASSOCIATION
P.O. Box 620777; Oviedo, FL 32762 Phone: 407-365-5661

USDA ISSUES PROPOSED RULE FOR MANDATORY COOL

The Agriculture Department has issued the proposed rule for mandatory country of origin labeling as required by the 2002 Farm Bill. Foodservice establishments, such as restaurants, bars, cafeteria and other institutions are exempt from mandatory COOL.

Under the proposed rule, a covered commodity can only bear a “United States country of origin” declaration if certain criteria are met. For beef, the covered commodity must be derived exclusively from animals born, raised, and slaughtered in the United States, including Alaska or Hawaii and transported for a period not to exceed 60 days through Canada to the United States and slaughtered in the United States. For lamb and pork, the covered commodity must be derived exclusively from an animal that was born, raised and slaughtered in the United States.

The proposed rule also outlines the requirements for labeling products of mixed origin including products produced both in foreign markets and in the United States as well as labeling requirements for blended products. For example, ground beef made from beef from the United States, Australia, and Mexico must be listed on the label as coming from Australia, Mexico, and the United States.

There are no record-keeping requirements for livestock producers because live animals are not covered commodities. Meat packers must have legal access to records that tell where the animal was born, raised, or slaughtered.

The newly formed Meat Association Council met in Chicago the end of October and COOL is an issue they are hot about. The Council approved a unified effort to bring the mandatory Country of Origin Law (COOL) to a voluntary basis. All members of the Council (including SEMA) will write Congress asking for a voluntary “COOL” program.

FSIS DIRECTIVE 10,240.4 GUIDES INSPECTORS ON COMPLIANCE WITH LISTERIA INTERIM FINAL RULE

The U.S. Department of Agriculture’s Food Safety and Inspection Service has announced that it has adopted the BAX system to screen for Salmonella in raw meat and poultry products. This measure will increase efficiency and allow FSIS to further protect public health.

For more information log on to: http://www.fsis.usda.gov/oa/news/2003/baxsalmonella.htm

IRRADIATION—THE MEAT INDUSTRY IS READY BUT IS THE PUBLIC?

USDA ruled that schools could purchase irradiated ground beef for the federally funded school lunch program beginning January 2004. However, schools may not be taking advantage of the new freedom of choice.

According to telephone interviews with school officials across the country, irradiation is new and more information is needed before using it. Many districts use pre-cooked hamburgers so they feel there is no need for irradiation. Also, more training is being given to cafeteria workers on food preparation, storage and sanitation. Some states will have it available if the schools request it.

NATIONAL BEEF BEGINS LACTOFERRIN USE

Lactoferrin—a natural protein that is credited with protection from bacteria while an immune system is developing –is naturally present in beef. By discovering how to activate the lactoferrin molecule, scientists were able to mimic its bacteria-fighting properties on the surface of beef.

National Beef CEO, John R. Miller said, “lactoferrin would be included as the final step in the company’s existing food safety interventions.

MARKET TREND

Agricultural economist John Nalivka told an audience at the Worldwide Food Expo in Chicago, IL that both food safety and competition drive the U.S. meat industry as manifest by costs, consumer preferences, and capacity.

Nalivka pointed out that over the past 12 years the industry as a whole has learned to add tremendous value to raw materials cost. The industry has built new plants and renovated older operations to create more value-added processing. At the same time the industry, once one of the most dangerous places and American could work, has reduced the incidence of injury by half.

Nalivka said pork’s share of market has hovered at 26-28 percent “for the past 15 years, and maybe for the past 20. It just doesn’t seem to change.” Beef now commands about 35 percent of the overall meat market and chicken has 31 percent.

Nalivka believes, with historically high cattle prices, cow-calf operations will want to keep cows to raise more calves; that means next year’s cow slaughter will drop dramatically. Imports will have to make up the difference. Nalivka said the current market is the result of a shrinking herd followed by closure of the Canadian border last May after a single case of BSE.

BID ACCEPTED

Following the approval of the sale by the United States Bankruptcy Court in Kansas City, Missouri, Smithfield Foods has completed the acquisition of Farmland Foods for $367.74 million in cash, plus the assumption of certain Farmland liabilities.

Farmland Foods had annual sales of $1.60 billion. With the acquisition of Farmland, Smithfield Foods annualized sales will approach $10 billion. Smithfield President Larry Pope told Farmland employees they were not planning on laying off any Farmland employees or close any plants.

MEAT ASSOCIATION COUNCIL

The newly formed Meat Association Council (MAC) met in Chicago October 28. MAC is made up of national and regional meat associations, of which SEMA is a member. This Association will work together on key issues. The first 3 issues to be worked on are:

1. Legislation to obtain interstate shipment rights for state-inspected meat and poultry products.
2. Work through congress to make country of origin labeling a voluntary basis not mandatory.
3. Bring to the attention of FSIS administrator’s attention that there is a deterioration of meaningful dialogue between the FSIS and the industry and FSIS and its own employees.

UNCLE SAM IS A TOUGH CUSTOMER

Filling out the paperwork to gain approval as a vendor is just the start. The real work begins later, with the sales and marketing efforts. Government buyers like companies with a track record. In some respects, government work isn’t that much different from non-government. “Government customers want the same things that anyone else wants—quality selection and good prices".

Filling out reams of paperwork and complying with scores of regulations may not sound like a good way to do business. Despite efforts to make government more efficient, red tape and compliance issues continue to dog the process, vendors say. A company must work to reach government customers and network at government trade shows, phone officials at their offices and send direct mail campaigns to various agencies.

PICCADILLY’S IS SELLING

Piccadilly Cafeterias signed an agreement to sell its assets, including its restaurant operations, to a joint venture formed by Tru-Foods Corporation and H.I.G. Capital for $54 million. Piccadilly filed for bankruptcy, which cleared the way for the sale. It expects the sale to close in January. Picadilly operates 170 cafeterias across the Southeast, about half of them in malls.

THIRD ANNUAL CONSUMER’S CHOICE PORK AWARDS

What’s new with pork? America’s Pork Producers want to know, and are calling for nominations for the third annual Consumer’s Choice Pork Awards. This prestigious award, which honors fresh ideas and innovations that enhance the demand for pork products, has become today’s standard in the industry. Help identify great new pork items—visit www.otherwhitemeat.com or e-mail consumerschoice@porkboard.org for information on how to nominate your company’s product today.

FAMILY BUSINESS

An estimated 88% of family business owners in the U.S. intend to pass the firm along to heirs. Some studies estimate that 75% of family-controlled firms won’t make it into the second generation. The Institute for Family enterprising at Babson College in Massachusetts says 92% of U.S.-based firms have some sort of family ties. That includes control of shares, not just who’s managing those firms.

Tim Habbershon, the Babson institute’s director, cites from his own research as well as others:

• Families control 60% of all public firms.
• Of the Fortune 500, 47% are controlled via stock management or both by family interests.
• At least 37% of firms in the Fortune 500 have second-generation involvement.
• 20% of businesses have more than one generation and more than one family member in management.

You’ve got to support all your employees, whether they’re in your family or not.

SEMA MEMBER IS BIG WINNER!!!

The North American Meat Processors Association held their convention at the Phonecian Resort in Scottsdale, Arizona. To help raise money for the Association, a raffle was held. A SEMA member, Dale Travis of Travis Meats was the big winner of $300.00. Congratulations Dale!!!!!

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THINGS TO PONDER…………………………

Tact is the ability to describe other as they see themselves…
Abraham Lincoln

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THE SEMA OFFICE WOULD LIKE TO WISH YOU AND YOUR FAMILY A VERY HAPPY THANKSGIVING!!!