StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between

Disturbing Similarities

05 Oct 2009
Posted by Andrew Samwick

This article in Saturday's New York Times reminded me of the mortgage mess.  Apparently, the originate to distribute model can pose some problems when applied to livestock that may carry E coli:

Ground beef is usually not simply a chunk of meat run through a grinder. Instead, records and interviews show, a single portion of hamburger meat is often an amalgam of various grades of meat from different parts of cows and even from different slaughterhouses. These cuts of meat are particularly vulnerable to E. coli contamination, food experts and officials say. Despite this, there is no federal requirement for grinders to test their ingredients for the pathogen.

The frozen hamburgers that the Smiths ate, which were made by the food giant Cargill, were labeled “American Chef’s Selection Angus Beef Patties.” Yet confidential grinding logs and other Cargill records show that the hamburgers were made from a mix of slaughterhouse trimmings and a mash-like product derived from scraps that were ground together at a plant in Wisconsin. The ingredients came from slaughterhouses in Nebraska, Texas and Uruguay, and from a South Dakota company that processes fatty trimmings and treats them with ammonia to kill bacteria.

Using a combination of sources — a practice followed by most large producers of fresh and packaged hamburger — allowed Cargill to spend about 25 percent less than it would have for cuts of whole meat.

And, as in the mortgage mess, finding the party to hold accountable is difficult, since the responsibility is shared among a number of entities, public and private, domestic and international. 

That's a really interesting

That's a really interesting and very apt comparison. The problem extends to tracking mad cow disease also.

Must disagree with your

Must disagree with your conclusion that "finding the party to hold accountable is difficult".

This is a failure of the regulators and inspectors to do their jobs. Instead of protecting the public, they're protecting the industry.

As they pretty much admit. From the NY Times article: "Dr. Kenneth Petersen, an assistant administrator with the department’s Food Safety and Inspection Service, said that ... 'I have to look at the entire industry, not just what is best for public health' "

Despicable, really.

And stupid: If the whole industry were forced into strict inspections, the costs would get passed through to customers. The effect on the industry would be minimal, although some particularly-slovenly meatpackers might get squeezed.

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