The BLS is thrilled with this news. The price of ground beef didn’t really go up 15% because you switched to pink slime instead. I see bowel deflation in our future.
The Solution To Record Meat Prices: The Return Of Pink Slime
Submitted by Tyler Durden on 05/25/2014 10:29 -0400
A few months ago we reported that while the Fed is seeing nothing but hedonic deflation as far as the eye can see, food prices – for whatever reason but “certainly not” due to trillions in liquidity entering a close system so just blame it on the weather – were soaring to record highs. Among them was the price of beef, which in 2014 alone has soared by the most in over a decade. This led the US Department of Agriculture to warn of “sticker shock” facing home chefs on the eve of the Memorial Day holiday weekend, the unofficial start of the U.S. summer grilling season.
According to the USDA, reported by Reuters, conditions in California could have “large and lasting effects on U.S. fruit, vegetable, dairy and egg prices,” as the most populous U.S. state struggles through what officials are calling a catastrophic drought. Alas, the USDA had nothing to say about the Fed’s unprecedented desire to reflate the US economy which is still suffering from the catastrophic depression which started nearly 7 years ago.
More:
The consumer price index (CPI) for U.S. beef and veal is up almost 10 percent so far in 2014, reflecting the fastest increase in retail beef prices since the end of 2003. Prices, even after adjusting for inflation, are at record highs.
“The drought in Texas and Oklahoma has worsened somewhat in the last month, providing further complications to the beef production industry,” USDA said.
Beef and veal prices for the whole of 2014 are now forecast to increase by 5.5 percent to 6.5 percent, a sharp advance from last month’s forecast for a 3 to 4 percent rise. Pork prices are set to rise by 3 percent to 4 percent, up from a 2 to 3 percent advance expected a month ago.
The USDA said overall U.S. food price inflation for 2014, including food bought at grocery stores and food bought at restaurants, would rise by 2.5 percent to 3.5 percent in 2014.
That is up from 2013, when retail food prices were almost flat, but in line with historical norms and unchanged from April’s forecast.
“The food-at-home CPI has already increased more in the first four months of 2014 then it did in all of 2013,” USDA noted. At-home spending accounts for about 60 percent of the U.S. food CPI.
Ok we get it: soaring food prices are not only already here but are set to surge even more, especially for those who rather eat real meat than mystery meat dispensed with largesse at your favorite $0.99 fast food outlet.
So what are food processors to do facing soaring meat input costs and unwilling to suffer bottom line hits? Why, return to that old staple of unknown origin of course.
Here comes Pink Slime… again.
According to the WSJ, “finely textured beef, dubbed “pink slime” by critics, is mounting a comeback as retailers seek cheaper trimmings to include in hamburger meat and processors find new products to put it in.”
Proving that popular memory lasts at best a couple of years, it was only in 2012 when sales of pink slime, processed from beef scraps left after cattle are butchered, collapsed in 2012 after a “social-media frenzy spurred by television reports raising questions about its legitimacy as a beef product. The ingredient’s two largest producers, Beef Products Inc. and Cargill Inc., closed plants that made it and cut hundreds of jobs—while defending the product’s quality and pointing out that the U.S. Department of Agriculture deems it safe.”
What really allowed the scrapping of pink slime, however, was the broad decline in prices of non-alternative meat, as in the real deal. However, now that meat prices are soaring again (all weather mind you, nothing to do with the Fed), it is time for US consumers to eat “hedonically-cheap” “meat” once again.
Today, Cargill sells finely textured beef to about 400 retail, food-service and food-processing customers, more than before the 2012 controversy, though overall they now buy smaller amounts, company officials said. Production of finely textured beef at Beef Products has doubled from its low point.
The resurgence is being driven, in part, by an aversion to something many consumers and companies find even less pleasant than the pink-slime nickname: red-hot prices. Prolonged drought in the southern Great Plains has shrunk U.S. cattle supplies to historic lows. The retail price of ground beef soared 27% in the two years through April to a record $3.808 a pound, according to the U.S. Bureau of Labor Statistics.
That means serious sticker shock for U.S. consumers preparing to fire up their barbecues for Memorial Day weekend—the traditional start to the summer grilling season. The week leading up to the Monday holiday is typically one of the biggest sales periods for ground beef, with an estimated 160 million pounds likely to be sold during that stretch this year, according to CattleFax, a Colorado-based research firm.
How much of that burger meat contains finely textured beef isn’t clear. Prior to the flurry of media attention in 2012, Beef Products estimates, the ingredient was in as much as 70% of the ground beef sold in the U.S. at retail and in food service. Cargill and Beef Products decline to give a similar estimate now, but they say sales have rebounded sharply from their 2012 lows.
So… 100%? But at least the Fed will soon be able to claim that “food” (or byproducts rather, but who cares) prices are plunging, even as it itself announced that food prices in its cafeteria have soared by up to 33% as Zero Hedge reported yesterday.
Meanwhile, it’s a feeding frenzy, pardon the pun, out there by those who know too well that Americans don’t really care what they shove in their mouths as long as it i) tastes kinda meaty and ii) is cheap.
“Two years ago, no one would return our calls,” said Jeremy Jacobsen, spokesman for BPI, which closed three of its four plants in operation in 2012. “Now some of those same people are calling us unsolicited, and we don’t have the sales staff to maintain the new business.”
Finally for those who may have forgotten the prehistory of Pink Slime, here it is again. First, a look at how it is made.
And its recent turbulent history.
The ingredient began attracting wider attention last decade. A 2009 New York Times article cited a 2002 email by a USDA microbiologist who called the product “pink slime.” TV chef Jamie Oliver used the epithet in an on-air critique in 2011. After ABC News reports in 2012 scrutinized the product, a public backlash ensued, spread through social media. That prompted several supermarket chains, including Kroger Co. and Supervalu Inc. to drop the beef additive from their meat cases. Neither Kroger nor Supervalu sell the product today.
Critics were partly repulsed by images of the product—some of which the industry says were false—and by the idea of using chemical treatments such as ammonia gas on food products. Supporters of finely textured beef pointed out that many foods contain similar traces of ammonia naturally. BPI says it uses a form of the chemical called ammonium hydroxide. That compound falls under the U.S. Food and Drug Administration’s “generally recognized as safe” category, which means they are safe when used as intended.
Officials including Agriculture Secretary Tom Vilsack defended the product’s safety. But its sales fell so sharply that they effectively reduced total U.S. beef supplies by 2% in 2012, according to agricultural lender Rabobank.
BPI, based in Dakota Dunes, S.D., said it lost contracts with 72 customers, many over the course of one weekend in March 2012, forcing its production to slide below one million pounds a week at their nadir that year. Customers were “dropping like flies,” said Mr. Jacobsen, the BPI spokesman.
BPI in 2012 sued ABC and several other defendants for defamation in South Dakota Circuit Court, seeking at least $1.2 billion in damages. The state’s Supreme Court on Thursday affirmed a decision by a lower court to let the case proceed, denying an appeal by ABC. The case hasn’t gone to trial. Jeffrey Schneider, a spokesman for ABC, said the news organization continues to vigorously contest the charges.
At Cargill, about 80% of sales of the product evaporated “overnight” in 2012, said John Keating, president of Cargill Beef. The company ceased production at a plant in Vernon, Calif., in 2012, laying off about 50 workers. Mr. Keating said the lost business also contributed to Cargill’s decision last year to idle a beef-processing plant in Plainview, Texas, where about 2,000 people were laid off. At other plants, production slowed.
Cargill’s meat processors and chefs have been working with its customers to find new uses, such as frozen meatloaf and sausages, though 90% to 95% continues to go into ground beef, Mr. Keating said. Earlier this year Cargill, based in suburban Minneapolis, began to label boxes and packages of ground beef containing the product. Mr. Keating said the labels haven’t much affected Cargill’s ground-beef sales.
“It’s a product we’re working very hard to reintroduce,” Mr. Keating said.
And a product which the Fed will be delighted when it is reintroduced because remember: it is all about hedonics. And there is nothing in the Fed rulebook that says replacing meat with “meat” if only to keep prices lower, is a bad thing. As long as the Fed academics running the centrally-planned economy get to keep eating the real thing of course.
“Hedonic” adjustments, courtesy of Alan Goldspan (Greenspan) – just another “brick in the wall” of the defining characteristics of the fedgov: force and fraud. BC-LR to all
HAHAHAHA!
***jumps up and down***
The Pink Slime is back!! The Pink Slime is back!!!
Only now its back to help with the sinking margins for the meat producers, not to use the entire animal.
Sigh.
I guess we can expect an epidemic of E. coli O157:H7 to put a further strain on the Obongocare damaged health system.
Or not, as we didn’t exactly have an epidemic the last time around with Pink Slime.
But hey! The re-emergence of Pink Slime from beef is so nicely emblematic with the generalized SLIME in our political/financial system, it just seems, so, I dunno, PERFECT.
Slime ON!!!!
I don’t give a shit about pink slime. Informed people, which excludes the vast majority of Americans, knew that the price of beef was eventually going to go up with the Midwestern drought that hit feed grain crops and the subsequent massive sell off of cattle herds due to the rising costs of feed grain. Pink slime? Meh.
A) Farmers feed grain to animals. b) World has 7 or 8 billion people that would love to be eating US grain. c) US consumers face drought that increases the price of grain fed to animals.
US consumers stunned that a+b+c = increased price of meat.
Hahahahahahaha! US consumers are truly stupid.
Item #a in combination with item #b will in and of themselves see the price of meat skyrocket in coming years. Grain prices will continue to climb steadily, and it will be far more lucrative, and much simpler, to grow grain and ship it to India than it will be to grow grain, fed it to animals, process the animals, etc. Meat will become more and more a luxury item.
Not to mention that the demand for meat in the developed world is climbing. Wonder what that will do to the price of meat?
Seriously, folks, the world has changed and is changing. The days of the middle class being able to afford hamburger, much less steak, is coming to a close. A perfect storm is brewing, and it will forever change the landscape in the US. US citizens that believe they are entitled to meat, a big screen TV, vacations, two cars, a McMansion, etc. are in for a very rude awakening.
Pink Slime is just a name. It is no different from baloney.
PS, Filet Mignon is partially enzymatically decomposed flesh.
SSS – I gave you a thumbs up. They drought expedited things, but the fact is feeding grain to cattle/animals was never a sustainable production model. A better model is to grow cattle – not the kind that are raised in pens – on non-arable scrub land where they have to forage among tumbleweeds. I think longhorns and such do ok in those situations. The days of pampered cattle grazing on arable land and/or eating grain is coming to a close.
Sheep for mutton are also an option – they can grow damn near anywhere. They taste like shit, but it is still meat.
30 years in meat industry . I know personally that “pink slime” though lacking eye appeal is a wholesome product equivilent to other beef products. It is not a problem but a symptom of economic disaster taking place.
I feel for the industrial meat system: they must continue to lower costs because their customers want the lowest possible price above all else.
If you want the purest meat, it’s best to find a local farmer who is absolutely transparent about growing practices and willing to put it in writing on the web or on printed materials where those practices are subject to scrutiny by other farmers who know if they’re being honest.
Properly managed herbivores–that is, managed in a different way from what we’ve done through most of human history–can make land amazingly fertile, esp. the huge percentage of land that is too dry to grow crops for vegans. Allan Savory explains it in a TED Talk:
If it’s not Monsanto & Frankenfood, it’s these corporate thieves selling mystery meat.
Also reminds me of the food from the old horror movie “The Stuff”.
https://en.wikipedia.org/wiki/The_Stuff
Next up, Soylent Green from old folks that die from not being able to afford Obombercare. Use your SNAP or EBT card to chow down. Dinner is served – is someone you know on the menu? The CEO is none other than Mr. Hannibal Lector.
The USA will become a 3rd world country, with 1st world prices = recipe for disaster, unrest, possibly revolution. That’s why the government is buying lots of bullets.
Simon Farlie has recently published an excellent work entitled Meat: A Benign Extravagance in which he examines, in detail the various arguments both for and against the production and consumption of animal flesh.
Understand this; all life on Earth requires the death of and consumption of another life form. This is an inescapable truth and arguments for the sentience of each particular species aside and its fundamental right to live a life and not become nourishment for other life forms is academic. A steer grazing in my field can either feed my family and my neighbors or it can live its entire life until it dies of some other cause at which point it will be nourishment for worms and bacteria- in the end it feeds something.
Humans have, through the past 10,000 years at least, established a role for themselves as mediators in the process by selectively choosing to husband certain life forms in a way that benefits himself. It is far more reliable to practice agriculture than it is to be a gatherer of wild edibles because of the odds. Weather cannot be controlled-that we know of- but the scale of what can be harvested in its time can be greatly expanded by the use of techniques and methods that maximize the odds in our favor. As observant human beings over the ages began to build their skill sets and methods it was noted that manures, when applied at certain times and in certain states could vastly improve harvests and so farming developed. It has been said that farming is the Mother of the natural sciences- that virtually all we know of the processes of life are a direct result of the practices of agrarians.
What happened at the close of the Second World War was that two new tools were introduced to the world of agriculture at levels that dwarfed earlier agricultural advances, namely petroleum based fertilizers and petroleum fueled farm equipment. Both of these developments maximized harvests leading to greatly reduced food prices- so much so that within a generation our entire national participation rate for agriculture dropped by more than a 1000%. The processes that fed our families and nourished our bodies were no longer common knowledge of the entire population, but an industrial process as alien as the manufacture of silicon wafers or plastic extrusions. Rather than to rely on the accumulated knowledge of a hundred generations, we passed off our responsibility to feed ourselves to oil men and lab rats. Is it any surprise that in their effort to maximize profits through economies of scale that the inevitable conclusion was to feed their consumers pink slime?
While on the surface this must have seemed like such a great leap forward (where have I heard that phrase before?) by freeing up not only 25-30% of our income that had previously been spent on food, but by eliminating from American life the necessity of laboring in a garden and the risks associated with weather and harvests, not to mention the time in preserving these harvests for the pantry. From here on out it was TV instead of weeding the garden, nodding off in the hammock instead of cleaning out the chicken coop, twitter instead of listening to the tweeting of real birds.
Of course, like physics always shows us, for every action, there is an equal and opposite reaction.
Those super efficient farm machines that complete in a single day what would take a man months to do also compacted the soils in a way that twenty generations of family members walking on its fields could never accomplish. That the ever expanding requirement for fertilizers would also leave the soils as inert and dead as a lava field, unable to bring forth life without the application of tons of anhydrous ammonias and pulverized lime. That the livestock long required for fertilizing the soil with their wastes would no longer be needed, reducing worldwide herd and flock sizes to numbers last seen in the dark ages. It also placed the flocks, the fields, the herds and the seeds into the hands of less than 1% of the population where previously common ownership had been as ubiquitous as cell phones today. And lest we forget, when we gave up our ability to grow and raise and slaughter and harvest our own food supply, we lost our collective store of generational knowledge. We sacrificed our freedom to feed ourselves and our families for convenience and in exchange we enslaved ourselves to a select minority for the one need we all have daily without regard to age, sex, race or social status- nourishment.
And now we discover that they would feed your precious children “pink slime”, or worse yet, e coli, or camphobactyr or wood chips if it looked good to the bottom line.
Yesterday we worked as a family in the gardens for about 12 hours. The younger children are expected to participate, but aren’t forced to hang in there all day. They plant a bit, go off and play for a while, come back and ask questions, go down to the brook and come back again with a snake. My wife who in a previous life could have been the Princess in Enchanted mixed rotted manure with sifted loam in the wheel barrow and potted red geraniums while I put in 200 feet of red, white and yellow onion sets. We weeded the greens in the raised beds, hilled the rows of beans that were only just starting to germinate on the Sunday before Memorial Day and finished the evening with a steaming plate of freshly harvested asparagus and grilled flank steaks from a particularly sassy Chianina cow that weighed close to a half ton hanging weight.
Whenever I see that stats regarding the number of farmers left in America I assume that I am part of that count, but I am not one of them. There’s no GPS on my tractor, It isn’t air conditioned except by the air itself and I don’t get subsidies for things I don’t grow paid for by taxpayers dollars. I try and make this place a little more productive each year, spread my risk around a bit by adding news crops or improving ones we already produce and make sure that my family never goes hungry. When everything works out right we sell the overabundance to grateful friends and neighbors and put whatever we earn right back into the place so that when our children step up it will be that much more productive, that much healthier and that much more fertile.
The era of cheap food is at the doorstep, America and the new era of expensive garbage in the form of pink slime with all of its concealed and attendant costs to health and nourishment is upon us.
Hardscrabble – generally love your stuff. However, lots of not quite trues in this last post. Very slanted piece. For instance, something cannot be reduced 1000 percent.
@Hardscrabble:
Great post about your family life. You are soooo wise to be doing this with your kids.
I try every weekend to get my electronically addicted kids out to the garden, etc… but the screen addiction is strong in them. It’s down to “help me do this stuff or the internet goes away forever” – but whatever works, I guess.
I don’t know about a 1000% decrease in the number of family held farms, honestly, it’s probably higher than that, but your point that our food is now produced by a faceless corporate agribusiness joined at the hip with the unelected unaccountable fed.gov alphabet agencies like USDA/EPA/BLM etc is well taken.
In the Great Depression 1.0, 95% of the US population lived in the rural areas. They all had gardens and small livestock, knew how to make their own clothes and household items and had a sense of community with their neighbors. My mother grew up in a family of 6 on the outskirts of Chicago. Back then all the kids worked in the garden, killed and plucked chickens, canned and dehydrated food and “did the chores”. They traded with their neighbors for stuff as no one had any money. My grandmother ran the house, my grandfather worked as a plumber by day and played the sax in a band at night for extra money. My mother did not have her first set of new clothes until her first year of college (she had a scholarship). To the end of her life, she could make a nickel scream she was so frugal. Traits she passed on to me, thanks God.
Now? 95% of the US population has NO CLUE where their food comes from, has no idea how to produce it themselves, lives the urban/suburban lifestyle which is totally based on cheap oil and worst of all, thinks that typing on a keyboard in cyperspace is how you make things happen in the real world.
Oh Lord there’s gonna be a Real Bad Day for a whole lotta folks.
And, there’s gonna be a culling as well.
Llpoh,
Everything I write is slanted. I only have my perspective and I am definitely prejudiced towards small scale organic based agrarianism as opposed to industrial based agriculture and consumerism. I hope I haven’t given any impression otherwise.
As to my % number, you’re right, I used hyperbole to express the idea that at the onset of the 20th centruy 35% of Americans lived on a family farm while today it is 1% This number does not take into account the number of Americans who tended a garden or a small flock of chickens who weren’t considered “farmers” up until the end of the Second World War when such practices in all but inner cities was ubiquitous. I often encounter people who are otherwise well educated but who do not know where potatoes originate or what part of an animal the various cuts come from.
When the distribution and logistics chains break down, after banks collapse and nobody is getting paid, like in 2007, LIBOR freezes up again, the stores will empty out. The FSA will have SNAP benefits, but the stores will be empty, as will restaurants. People don’t seem to realize semi trucks bring their food from far away places. When those trucks quit running, it’s game over.
A few days, and people will start with home invasions, because boobus obesus Americanus is used to eating their weight in food every week. The people that survive will be driving out into the country, to try and raid farms and get food. The government will try and take over distribution and control of the food supply, but there are only 2 million cops, and 110 million FSA used to getting free shit and cash. Better be armed and willing to defend what you have, because there will be many, many people wanting to take what you have, more than 100 million people.
We complain about high food prices. I do so myself. In a few moments we’ll be going to the Farmers Market …. fucken real cheese is about $12 / pound, we’ll spend around $100, and Ms Freud and I will bitch about it all the way home. lol
To which I say, we are in fact, spoiled little pussies.
Our food bill amounts to low single digits percentage-wise. I’ll bet most of you here are in the same boat. Meanwhile, a good percentage of the world spends 50%, or more, of their income on food.
Hardscrabble – thanks for the reply. I appreciate what you do and are trying to do, but some of your comments were well, not quite right this time.
I mentioned the 1000%.
You talked about the decline in farmer worker percentage after WW2, but as you mentioned in your response, the reality is the decline commenced far earlier, really getting going around 1900, when farmer workers were around 40 percent of the total workers, and that had dropped to around 25 percent by the end of WW2.
You talked about declining herds, and the decline being because they didn’t need the herds for fertilizer. I have a hard time swallowing that one. There have been two really big impacts on cattle numbers. First, people now eat a lot more chicken than beef, when before WW2 they ate almost no chicken. Second, animals are raised much faster to slaughter size than they were. Faster throughput means that inventory drops.
You seemed to imply that individual farmers are no longer the norm. That is not quite true. The average farm has grown from around 250 acres to around 500 acres in size. Ownership remains largely individuals and families. Individual farmers are in a position to influence what happens. This may change rapidly as the average age of farmers is climbing rapidly, and young people are not taking up the mantle.
You said that the folks that worked the farms owned the farms. Again, I do not believe that is so. I believe that hired hands and sharecroppers outnumbered owners – significantly.
Anyway, I really do wish you all the best. I hope you are able to leave your children a heritage they can keep hold of.
For all those who bought into the MSM’s fake news about pink slime:
ABC “Pink Slime” Trial Opens With Scathing Attacks on Media Bias, Corporate Secrecy
http://www.hollywoodreporter.com/thr-esq/abc-pink-slime-trial-opens-scathing-attacks-media-bias-corporate-secrecy-1010391