Set aside its less-than-stellar first week on the job, set aside the howling by some ranchers about the usual antitrust complaints, and set aside that nothing is yet final, and you still have smart money betting that this new makeup of the North American beef industry is going to be around for a long, long time. Greeley, Colorado beef giant JBS, USA, restarted the closed XL Foods beef slaughterhouse at Brooks, Alberta on Oct. 29, but ended the week with a spanking from the Canadian Food Inspection Agency over the need for more corrective actions. JBS took over the temporarily closed Brooks facility from the privately held XL Foods Inc. under a management contact that gives it purchase rights for the next six months. An E. coli outbreak attributed to contamination at the plant is blamed for sickening at least 17 Canadians. There are no illnesses in the U.S., although 2.5 million pounds of beef from the Brooks plant was distributed in the states before it was recalled. Just by operating XL Foods facilities in the U.S. and Canada, JBS has become the largest beef producer in the U.S. JBS can cement its No. 1 position by purchasing the XL facilities, a deal that is estimated at around $100 million. CFIA said that because the Brooks plant had been shut down for several days, some of its observations for Corrective Action Requests (CARs) were to be expected. The observations included:
- Condensation on pipes in the tripe room
- Water in a sanitizer was not maintained at a high temperature
- Meat cutting areas were not adequately cleansed; and
- No sanitizing chemical solution in the mats used for cleaning employees’ boots.
CFIA asked the pros from Greeley to immediately address these concerns:
- Potentially contaminated product was sent for rendering.
- Sanitizers were brought into compliance immediately.
- Meat cutting areas were cleaned and sanitized.
- Boot mats were applied with sanitizer.
CFIA wants to know how JBS plans to address these issues long-term and mitigate future risks. The agency says it is reviewing the company’s long-term and preventive measures and will verify whether or not they are effectively implemented. Last Friday, American officials showed up at the Brooks plant in the form of a U.S. Food Safety and Inspection Service (FSIS) team to conduct the first equivalency audit of the Canadian beef safety systems since 2009. It’s unclear when that audit report will become public. Food Safety News, in an exclusive report Nov. 1, disclosed that FSIS has dramatically cut back on inspections of foreign meat systems that are suppose to be at equivalent levels to that of the U.S. before foreign counties are allow to export meat to the U.S. The lapse in these periodic inspections is raising eyebrows among food safety advocates in the United States. However, it should be noted that a border inspection by FSIS was what revealed the E. coli problem in the Canadian XL Foods’ meat. CFIA said that in addition to monitoring plant operations, it is requiring that trim and ground beef products be held until test results are known and CFIA releases the product. And putting the punch list aside, CFIA said the new JBS crew was doing an effective job of managing the plant during its first week back in operation. “Overall food safety concerns were being effectively managed,” said the agency. CFIA had called upon JBS to address 41 corrective actions before the plant could be reopened. The JBS option to acquire the Brooks plant, which has a capacity of 4,000 head per day, along with some smaller units in the U.S. and Canada would lift JBS into the position of the largest beef company in North America. This has brought out the anti-trust busters. R-CALF, the feisty Billings, MT-based cattlemen’s organization, has already asked for an anti-trust investigation, something it has done a time or two in the past. If it does purchase the XL units, JBS and its three largest competitors in the U.S. would control more than 75 percent of the North American beef market. That, however, would not be that unusual and no company will have a majority marketshare. Taking the XL purchase option would add about 7,200 head to the JBS daily slaughter capacity in North American, raising it to as high as 35,800. That would make the U.S. subsidiary of Brazilain-based JBS the largest beef producer in North America. Springdale, AR-based Tyson Foods, with a daily beef slaughter capacity of 28,700 and Wichita,KS-based Cargill Meat Solutions Corp., at 28,600, are not far behind. Kansas City-based National Beef at 10,500 completes the top four. Once JBS starts getting a clean bill of health for running the Brooks plant and assumes the purchase item, and once anti-trust issues are put away, we could seeing the new normal in the North American beef industry. Beef Magazine, for example, reports that “this readjustment of the big four packers appears to have found an equilibrium” and not much change is expected in that any time soon.