LFTB: Too important to disappear

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Can lean, finely textured beef (LFTB) make a comeback after this spring’s public relations nightmare? Analysts with Rabobank International believe it can, but it will take time and a concerted effort by industry to build consumer trust.

Rabobank’s Food and Agribusiness Research and Advisory group today released a report titled “LFTB: Beef’s latest battleground for survival,” which details the role of LFTB in the beef production chain and how its decline impacts markets. The group believes that as U.S. beef production and supplies continue to decline, the market cannot tolerate loss of the 2 percent of production LFTB represents, which is equivalent to one million head of cattle.

Don Close, vice president of the group’s animal protein division, says the company decided to take a second, objective look at LFTB after allowing time for the emotional public debate to subside. Even among industry proponents, he says, there is an overwhelming bias that the product is a lost cause, but the Rabobank analysis approaches the issue from a different perspective and suggests otherwise.

The crash in demand for LFTB cost just about everyone from cow-calf producers to consumers, the report’s authors note. Processors lost the value of a significant portion of each carcass, forcing them to drive the purchase price of finished cattle lower. Lower prices for finished cattle pressures calf and feeder-cattle lower. At the other end of the chain, retailers have to pay higher prices for ground beef, particularly that with a high percentage of lean. Consumers lost access to a safe, high-lean product that enhanced the lean percentage of ground beef at a low cost.

Between early March, when the media began covering LFTB, and May 30, fed-steer prices declined 7 percent, the beef cutout price declined 3 percent, the value of 50 percent lean trimmings declined 46 percent and the value of 33 percent lean beef trimmings (the type of product from which LFTB is produced) declined an astounding 88 percent. At the same, the value of 85 and 90 percent lean trimmings increased by 5 percent and 4 percent respectively. Ground beef prices overall increased by 26 percent.

The drop in prices for 33 and 50 percent lean trimmings caused packer margins to decline by $78.34 per head, a loss they passed along to cattle feeders.

So how can LFTB find its way back into the market after its reputation took such a severe beating? Rabobank analysts believe market forces will play a role as declining supplies drive beef prices higher, but they also say the industry needs to recreate the product. The effort should include upgrading the product, including replacing the ammonia gas used in processing with some other food-safety intervention such as citric acid treatments. Repackaging also would include renaming the product and a new regulatory approval process, supported by promotions and consumer education. The ingredient will need to be clearly included on product labels for transparency.

With a concerted effort, the Rabobank analysts believe the product could return to the food chain within two to three years. Close says the food service sector could be an initial point of entry for a rebranded LFTB product, as those buyers are well informed and value conscious, followed by a gradual return to the school lunch program and eventually the retail meat case.

 For the future, the report’s authors encourage the industry to learn from the LFTB experience, identify vulnerabilities and prepare responses for negative publicity. In particular, industry groups and stakeholders must learn to monitor and engage in social media, which played such a key role in the viral spread of negative messages surrounding LFTB.

Although the LFTB controversy seemed to come out of nowhere, Close says there were earlier hints it could become an issue, including the “Food Inc.” movie in 2008 and a New York Times article in 2009. Rabobank analysts believe the expanded testing program for non-O157 Shiga-toxin producing strains of E. coli could present a future communications challenge for the industry. Expanded testing for these microbes is likely to result in false-positive results, volumes of beef held for verification of testing, more pre-cooked beef on the market and higher beef prices, all of which could contribute to loss of confidence on the part of consumers.


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Jasper    
Montana  |  July, 18, 2012 at 09:48 AM

These sorts of malicious attacks on our food system will continue to be launched by professional extremist fear mongers like Bettina Seigel, who successfully damaged our American beef industry from here computer keyboard in Austin, Texas. At minimu we need to learn from the LFTB smear. As for bringing the product back, why bother? Instead keep the personages of LFBT assassins (Bettina Seigel, Marion Nestle/NYU, Mark Bittman/NYT, ABC/Disney network, etc.) prominently associated with the impending inflation of beef prices. Make every shopper, every diner, every mother aware of who is working overtime to trash our food system, deliberately causing food prices to spiral out of control. We just need to play the game by turning the tables.

maxine    
SD  |  July, 18, 2012 at 04:29 PM

Thank you Rabo Bank for a relatively reasonable and honest appraisal of the attack on LFTB. I wonder, though if you missed a point re. the citric acid treatment instead of the ammonia gas treatment? Isn't it fact that the citric acid version is considerably less effective? What of the fact that MANY other foods are protected with the ammonia gas, yet remain unchallenged? It seems obvious that the vendetta was specifically against beef, particularly a product which increases the value, amount, and quality of beef from each carcass. Why was that? "Jasper" has some good points re. publicizing who, how, and why the attack on LFTB came to be. HOWEVER, why give up that superior lean beef? EDUCATE people as to the quality, value, and SAFETY of that product. SHOW how the product came to be: the dedication and determination of the owner of the facilites, who invented many of the machines and processes in order to have SAFER, LEANER beef burger. There should have been accolades, not a crucification by media!!!

Danny    
missiouri  |  July, 19, 2012 at 06:33 AM

Why don't they compair it to a banana they have used gas on them for years and years I haven't heard of any recalls on bananas or people getting sick from eating them either . Which I don't leave the farm very much so I might miss that if there was but point being the consumer has one more way to utilize a product that is save and wholesome it may not be the most glamorus food choice out there but people can obtain protein and other vital life sustaining nutrishing.

Jennifer    
Missouri  |  September, 05, 2012 at 12:08 PM

I am a consumer, a mom with 5 young children. I have been reading up on this, and it seems to me that the truth is, this is a safe and healthy product to eat and feed to my children. Why don't you just continue selling it, at a lower price, with a label? Lots of people, including me, would still buy it if they could get it cheaper than the LFBT-free stuff.


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