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Tyson: Pink slime controversy will cause drop in lean beef demand

March 27, 2012|By Tiffany Hsu
  • A hamburger made from ground beef containing what is derisively referred to as "pink slime," right, and one made from pure 85% lean ground beef.
A hamburger made from ground beef containing what is derisively referred… (Jim Cole / Associated Press )

The effects of the “pink slime” hullabaloo are being felt far and wide, with Tyson Foods Inc., the largest protein-pusher in the country, saying that the controversy has affected demand for beef.

The ground meat – known in the industry as lean finely textured beef – has been abandoned by several grocery chains and school cafeterias after a sudden groundswell of social media-fueled protests this month.

On Tuesday, Fresh & Easy supermarkets said customers could swap ground beef – ammonia-treated or not – from other grocery companies for fresh meat from its own stores Wednesday. The chain said it has never sold the filler that is causing the ruckus.

Beef Products Inc., the company that makes the ground meat, said Monday that it would suspend operations at three of the four plants that produce the meat.

The bad publicity “had an impact negatively on ground beef demand,” said Donnie D. King, Tyson’s vice president of poultry and prepared foods at the JPMorgan Global Protein Conference on Tuesday. King was joined by Chief Operating Officer Jim Lochner, whom the moderator described as the “all-around guru of all things meat.”

But the beef slide is a short-term problem, King said, “a very fast-moving thing ... a two-week event.”

In the long run, however, the supply of lean beef will shrink as much as 3%, he said.

“It’s a very unfortunate thing because it was a very safe, very wholesome, very nutritious product that will now be not available to the consuming public,” he said.

King and Lochner went on to discuss volatile prices for corn and soybeans as well as the 449% growth in global protein consumption from 1960 through 2010, a trend that they expect to continue.

Meanwhile, exports of beef are increasing while domestic production isn’t, which tightened availability of the meat in the U.S. and raised wholesale prices.


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