Jolley: Creekstone Farms Takes Off The Gloves
Creekstone Farms Premium Beef, bloodied two years ago by a USDA decision that crushed their bid to do BSE testing on every animal they process, took off the gloves, fitted its corporate fist with brass knuckles and threw a haymaker at USDA Secretary Mike Johanns.
After Creekstone’s chief exec, John Stewart, journeyed to the USDA’s front door in Washington, D.C. on March 23 to announce the suit, he immediately threw a second punch. Within hours, he had backed up a press release sent to every conceivable news source with personal visits to international news service CNN, financial news site Bloomberg.com and the major U.S. newspapers to plead his case. It was a well-orchestrated public relations attack that gave him the upper hand for a few days as the feds scramble to respond.
Referring to BSE testing in a press release announcing the suit, Stewart said, "Our customers, particularly our Asian customers, have requested it over and over again. We feel strongly that if customers are asking for tested beef, we should be allowed to provide that."
The Japanese ban in 2003 cost Creekstone nearly one-third of its sales and caused the company to slash production and lay off about 150 people, Stewart said.
The USDA and large meat packers oppose comprehensive testing, saying it cannot assure food safety. The big four packers, possibly more concerned with the potential cost of widespread testing than the lingering effects of consumer distrust in export markets, insist the result of such a move might be to create even more distrust and scare consumers away from beef.
Creekstone needs government certification to test each animal. The USDA refused their request in 2004, claiming it had the exclusive right to do testing and quoted an obscure century old law in their defense. Stewart’s suit calls into question the validity of that claim.
Patrick Boyle, president of the American Meat Institute which represents the largest North American packers, said the existing U.S. testing program should reassure customers inside and outside the United States. "The U.S. risk of BSE is miniscule and declining, our proactive prevention strategies have worked and the safety of American beef is assured."
On the other side of a ten-wire electric fence sat R-CALF USA, an organization of several thousand cattlemen. The group quickly issued a press release supporting Creekstone. R-CALF USA CEO Bill Bullard said voluntary testing for BSE “would help reopen and maintain certain export markets for U.S. beef, which in turn, would certainly benefit the thousands of independent cattle producers this organization represents.”
“Instead of thwarting innovation, USDA should be applauding and facilitating Creekstone’s entrepreneurial spirit,” Bullard asserted. “Creekstone is leading the beef-processing industry into a new era – one that is predicated on meeting the needs and wants of its customers, and in so doing, Creekstone has discovered a reasonable, efficient, and timely means for resuming export trade with Japan. Other like-minded meat processors are sure to follow if Creekstone’s efforts attract financial rewards.”
Japanese Ag Minister Shoichi Nakagawa was unimpressed, however. In a Friday press conference he said, “Beef trade rules between Japan and the United States won't be affected by a lawsuit filed by a U.S. firm against the U.S. government over mad cow testing.”
Nakagawa said he understands Creekstone's eagerness to regain access to the Japanese market, but Japan cannot give preferential treatment to the company as the Japanese and U.S. governments have already set beef trade rules that do not require Washington to conduct universal testing of slaughter cattle for BSE.
"We don't deny their efforts to adapt themselves to the Japanese system at a high cost, but how can we make exceptions of them?" Nakagawa asked.
Stewart comments
During a Sunday evening conversation, Stewart said he wasn’t concerned with Nakagawa’s comment. “We never wanted the suit to get in the way of the trade negotiations,” he said. “We want to make BSE testing available to everyone.”
“We’ve never said U.S. beef wasn’t safe. That’s not why we want to test every animal. What we’ve said all along is our consumers have asked us to do it.”
He’s concerned about the length of time it’s taken to get this far. After two years of waiting, he’s anxious to get to the end of this rock-strewn trail. Although a Federal judge has already been assigned to the case, the trial date hasn’t been established. “It could happen within a month or take as long as six to nine months,” he said.
When I asked him why it took so long to file the suit, he said Creekstone was always negotiating in good faith with the USDA. “We had several meetings with Anne Veneman and her staff. It was very late in that process before we knew she wasn’t going to give. We wanted to give her successor, Mike Johanns, a chance to react before we went to court.”
Reaction to the suit has been curiously mixed. The AMI and R-CALF issued predictable statements. The National Cattlemen’s Beef Association, which came down solidly against Creekstone’s position in 2004, hasn’t commented so far. Stewart suspects the organization’s membership may be shifting.
“With the cattle production cycle on the upswing, their members will need access to Asian markets to be profitable next year,” he said. “Testing every animal will help reopen those markets. I know quite a few packers, some much larger than us, would like to start a testing program, too.”
He thinks regaining lost markets might take a lot longer than many expect. “The longer we’re out of Japan, the longer it will take to get back to where we were three or four years ago,” said Stewart. “Australian beef might be priced a little high but they’ve served the market well. The Japanese appreciate that.”
“It could take years to win back the market. Creekstone has a brand awareness in the Japanese market that should help us but others will have a problem.”
Creekstone also announced an initiative to begin marketing more beef to the European Union raising this question: Was putting a greater emphasis on the E.U. market designed to offset the continued and maybe long term loss of Japanese sales?
When asked the question, Stewart responded by saying, “Part of our overall business model is to have a world wide presence. The Europeans don’t have corn-fed beef and only two U.S. plants have approval documentation. There’s a big, underserved demand and we’re in a good position to supply it.”
Creekstone Farms Premium Beef, bloodied two years ago by a USDA decision that crushed their bid to do BSE testing on every animal they process, took off the gloves, fitted its corporate fist with brass knuckles and threw a haymaker at USDA Secretary Mike Johanns.
After Creekstone’s chief exec, John Stewart, journeyed to the USDA’s front door in Washington, D.C. on March 23 to announce the suit, he immediately threw a second punch. Within hours, he had backed up a press release sent to every conceivable news source with personal visits to international news service CNN, financial news site Bloomberg.com and the major U.S. newspapers to plead his case. It was a well-orchestrated public relations attack that gave him the upper hand for a few days as the feds scramble to respond.
Referring to BSE testing in a press release announcing the suit, Stewart said, "Our customers, particularly our Asian customers, have requested it over and over again. We feel strongly that if customers are asking for tested beef, we should be allowed to provide that."
The Japanese ban in 2003 cost Creekstone nearly one-third of its sales and caused the company to slash production and lay off about 150 people, Stewart said.
The USDA and large meat packers oppose comprehensive testing, saying it cannot assure food safety. The big four packers, possibly more concerned with the potential cost of widespread testing than the lingering effects of consumer distrust in export markets, insist the result of such a move might be to create even more distrust and scare consumers away from beef.
Creekstone needs government certification to test each animal. The USDA refused their request in 2004, claiming it had the exclusive right to do testing and quoted an obscure century old law in their defense. Stewart’s suit calls into question the validity of that claim.
Patrick Boyle, president of the American Meat Institute which represents the largest North American packers, said the existing U.S. testing program should reassure customers inside and outside the United States. "The U.S. risk of BSE is miniscule and declining, our proactive prevention strategies have worked and the safety of American beef is assured."
On the other side of a ten-wire electric fence sat R-CALF USA, an organization of several thousand cattlemen. The group quickly issued a press release supporting Creekstone. R-CALF USA CEO Bill Bullard said voluntary testing for BSE “would help reopen and maintain certain export markets for U.S. beef, which in turn, would certainly benefit the thousands of independent cattle producers this organization represents.”
“Instead of thwarting innovation, USDA should be applauding and facilitating Creekstone’s entrepreneurial spirit,” Bullard asserted. “Creekstone is leading the beef-processing industry into a new era – one that is predicated on meeting the needs and wants of its customers, and in so doing, Creekstone has discovered a reasonable, efficient, and timely means for resuming export trade with Japan. Other like-minded meat processors are sure to follow if Creekstone’s efforts attract financial rewards.”
Japanese Ag Minister Shoichi Nakagawa was unimpressed, however. In a Friday press conference he said, “Beef trade rules between Japan and the United States won't be affected by a lawsuit filed by a U.S. firm against the U.S. government over mad cow testing.”
Nakagawa said he understands Creekstone's eagerness to regain access to the Japanese market, but Japan cannot give preferential treatment to the company as the Japanese and U.S. governments have already set beef trade rules that do not require Washington to conduct universal testing of slaughter cattle for BSE.
"We don't deny their efforts to adapt themselves to the Japanese system at a high cost, but how can we make exceptions of them?" Nakagawa asked.
Stewart comments
During a Sunday evening conversation, Stewart said he wasn’t concerned with Nakagawa’s comment. “We never wanted the suit to get in the way of the trade negotiations,” he said. “We want to make BSE testing available to everyone.”
“We’ve never said U.S. beef wasn’t safe. That’s not why we want to test every animal. What we’ve said all along is our consumers have asked us to do it.”
He’s concerned about the length of time it’s taken to get this far. After two years of waiting, he’s anxious to get to the end of this rock-strewn trail. Although a Federal judge has already been assigned to the case, the trial date hasn’t been established. “It could happen within a month or take as long as six to nine months,” he said.
When I asked him why it took so long to file the suit, he said Creekstone was always negotiating in good faith with the USDA. “We had several meetings with Anne Veneman and her staff. It was very late in that process before we knew she wasn’t going to give. We wanted to give her successor, Mike Johanns, a chance to react before we went to court.”
Reaction to the suit has been curiously mixed. The AMI and R-CALF issued predictable statements. The National Cattlemen’s Beef Association, which came down solidly against Creekstone’s position in 2004, hasn’t commented so far. Stewart suspects the organization’s membership may be shifting.
“With the cattle production cycle on the upswing, their members will need access to Asian markets to be profitable next year,” he said. “Testing every animal will help reopen those markets. I know quite a few packers, some much larger than us, would like to start a testing program, too.”
He thinks regaining lost markets might take a lot longer than many expect. “The longer we’re out of Japan, the longer it will take to get back to where we were three or four years ago,” said Stewart. “Australian beef might be priced a little high but they’ve served the market well. The Japanese appreciate that.”
“It could take years to win back the market. Creekstone has a brand awareness in the Japanese market that should help us but others will have a problem.”
Creekstone also announced an initiative to begin marketing more beef to the European Union raising this question: Was putting a greater emphasis on the E.U. market designed to offset the continued and maybe long term loss of Japanese sales?
When asked the question, Stewart responded by saying, “Part of our overall business model is to have a world wide presence. The Europeans don’t have corn-fed beef and only two U.S. plants have approval documentation. There’s a big, underserved demand and we’re in a good position to supply it.”