Ark City meatpacker causing big stir across U.S.

Plan to test for mad cow makes waves in industry

? While government regulators try to reassure domestic consumers and international customers the U.S. meat supply is safe, 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 single case of mad cow disease in Washington state, Creekstone said it had assurances from Japanese customers they would accept its products — but only if every animal processed at the plant was tested for the disease.

If Creekstone received permission from the Agriculture Department to begin such testing, and Japan did indeed begin importing Creekstone beef, the little company would 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 in this embattled rural community — jobs lost once before when the plant’s previous owner went bankrupt — are to survive.

“It is important to us because it could cost us all of our jobs again,” said supply clerk Miranda Wilson, who had been without a job for nine months before Creekstone opened the plant last year. “There are not that many jobs around here.”

The American Meat Institute, the meatpacking industry’s trade association, has publicly opposed 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 the company’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 — firsthand. Grocery stores hang signs above meat counters telling consumers the beef has been mad cow tested, and workers wearing “Aussie Beef” aprons gave away free samples of Australian beef.

Working with the U.S. Embassy, trade representatives and their own customers, Creekstone held informal discussions last month with the Japanese. The talks resulted in an unofficial agreement with Japanese officials: Should the Agriculture Department state on export certificates Creekstone’s meat has been mad cow tested, it would be allowed into the country.

Fielding said Creekstone could start shipping meat to Japan as soon as two weeks after the department gave its approval for testing to begin.

“This is the most discouraging thing I think I have ever seen: where in our case a private company who wants to do testing, is willing to pay for the testing and is told that we can’t do what our customers are asking us for,” Fielding said.

Meanwhile, with repeated assurances in hand from the Agriculture Department they were not saying “no” to mad cow testing, Creekstone is getting ready. At the department’s encouragement, the company is working with Kansas State University to set up a satellite lab that would conduct the testing at the Arkansas City plant.

“We still came away being cautiously optimistic we will be able to achieve this in a reasonable time frame — and we think a reasonable time frame has to be within weeks, not months,” Fielding said.

The plant in Arkansas City, 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 like 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 already is 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 — purchased the shuttered facility 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.”

Those employees find it difficult to understand why the Agriculture Department is delaying approval of the company’s request to begin mad cow testing.

“I would love them to come down here and talk to each and every person who works for me and tell them why they don’t have a job — let them tell them, not me,” Reed said.

The floor supervisor, David Barron, is worried about his job again. With three young children to support, he said he wants to give the Agriculture Department a message as they consider Creekstone’s application: “Please let us go. It is a choice we decided to do. It is going to make my job secure.”