Burger King tests trans-fat free cooking, cruelty-free killing?

Two major news stories popped up this week, both concerning Burger King. The first might be laudable but the second seems to be a tempest contained in a very small teapot. Since neither of them signal an immediate change in the way his majesty will do things, we might consider them both to be press releases suggested by Sunday’s April Fool’s day holiday.

First, Reuters reported that Burger King Corp. has begun testing cooking oils free of trans-fats in its restaurants, with an eye toward a national roll-out by late 2008. (Editor’s note: I checked the calendar. The roll out date is a year-and-a-half away. Thanks for the advance warning.)

Bowing to the will of the Viceroys of New York City, the King said it will meet that cities’ more immediate July 1, 2007 requirement first before beginning the nation-wide roll out.
A recently passed New York City law requires restaurants to eliminate margarines and shortenings with more than trace amounts of trans fats by July 1. A year later, all menu items with more than a half-gram of trans fat per serving will become illegal (Editor’s note: also fattening and probably immoral, too).

Earlier this week, McDonald's said it had switched to frying oil free of trans-fats in more than 1,200 of its U.S. restaurants. (Editor’s note: Let’s play “Spit in the ocean.” McDonalds; has over 30,000 restaurants in 100 countries with almost half of them in North America.)

Last fall, Wendy's switched to an oil that gives its French fries and chicken less than a half-gram of trans fats, dropping from a range of 1.5 grams to 7 grams. Wendy's announced a long-term goal of zero grams.

John Schaufelberger, Burger KIng’s vice president of product marketing and innovation, said the chain has been working for more than two years to identify trans fat-free cooking oils. (Editor’s note: Slow research begets a slow roll out, I suppose.)

The second story – “Burger King Pledges Cage-Free Food” – was reported March 28 by the New York Times and quickly picked up by over 225 newspapers and magazines. NYT reporter Andrew Martin wrote “In what animal welfare advocates are describing as a ‘historic advance,’ Burger King, the world’s second-largest hamburger chain, said yesterday that it would begin buying eggs and pork from suppliers that did not confine their animals in cages and crates.”

Martin went on to say B.K. “would also favor suppliers of chickens that use gas, or ‘controlled-atmospheric stunning,’ rather than electric shocks to knock birds unconscious before slaughter.” It is considered a more humane method, though only a handful of slaughterhouses use it.

The announcement was made after considerable pressure was put on the company by the Humane Society and People for the Ethical Treatment of Animals. PETA, in particular, had targeted BK with a controversial “Murder King” ad campaign that ended in 2001.

Burger King’s goal is for 2% of its eggs to be “cage free,” and 10% of its pork to come from farms that allow sows to move around inside pens, rather than being confined to crates. (Editor’s note: That’s good news for my friends at Smithfield who had previously announced they would phase out things like gestation crates for their hogs, a project they claimed would take a decade to complete.)

Temple Grandin, of Colorado State University and the leading expert on animal handling, said Smithfield’s decision had roiled the pork industry. Their decision, however, was a result of pressure from major customers like McDonald’s. Mickey D, of course, was reacting to pressure applied by animal welfare activists.

“When the big boys move, it makes the entire industry move,” said Grandin in the NYT article. She serves on the animal welfare task forces for several food companies, including McDonald’s and Burger King. She famously resigned from a KFC board a few years ago when she felt her suggestions for more humane handling of poultry were being ignored.

Bob Goldin, executive vice president of Technomic, a food industry research and consulting firm, explained the B.K. announcement was a result of a growing social consciousness among many consumers. “I think that the industry is going to see that it’s an increasing imperative to get on that (social consciousness) bandwagon.”

But Rosemary Mucklow, Director Emeritus of the National Meat Association, quickly pointed out that it’s a bandwagon that most meat processors were on long ago. “While Burger King’s move to support animal well being is undeniably laudable, it’s important to remember that standards for animal handling, housing and transportation are established as a matter of law in this country and the vast majority of meat companies are meeting or exceeding those laws.”

“This may not be the story of animal rights activists’ attack ads, but it is nevertheless the truth, verified by daily government inspection, as well as routine animal handling audits by customers. For both practical and ethical reasons, the meat industry is committed to the welfare of its livestock.”

After reading the NYT article, Janet Riley, Senior Vice President, Public Affairs and Professional Development for the American Meat Institute, said, “I’ve watched animal welfare for 16 years and seen it emerge and evolve. We are breaking an attendance record this year at our Animal Care and Handling Conference, which is testament to how big this issue has become for our industry.”

Riley, in fact, was in Kansas City preparing for the Annual Animal Care and Handling Conference when I reached her for comments on this story. A dozen trade associations covering food marketing, restaurants, beef, pork, and supermarkets co-sponsor this major event.

Trying to put some context to the complicated issue of animal welfare and its impact on the consumer, Riley said, “I’ve looked at a lot of polling data and what I see time and again is the animal welfare is not a purchasing driver for most consumers. But it is a potential derailer. Unaided, consumers generally don’t express concerns about welfare. But when the issue is raised, they do express concerns and say it is important to them.”

Suggesting that an important driver behind this and similar corporate decisions was brand development, she said, “As meat companies and others companies invest more in brands, they become increasingly concerned about things that can negatively impact the brand.”

And sounding a cautionary note about the agendas behind many animal welfare activists, she said, “Every company has the right to make decisions that they believe are best for their businesses and their customers. One thing I’ve learned, though, is when it comes to welfare, you can have various systems managed well or managed poorly. AVMA (American Veterinary Medical Association) recently looked at various pig production methods and concluded just that. Companies will make choices based upon what they believe is best. But animal welfare is not a black and white issue and I’m concerned that some activists want to make it so by seeking to cast various companies as either good or bad. It’s just not that simple.”

Wayne Pacelle, president and chief executive of the Humane Society of the United States, perhaps underlining Riley’s concern about over simplifying the issue, said the Burger King announcement was “an important trigger for reform throughout the entire industry.”

The announcement is the latest in a series of successes for activists, allowing them to move away from the fringes of American politics and closer to the mainstream.

Paul Hitch on the cost of corn and cattle

Most people know Paul Hitch as a cattle feeder from Guymon, Oklahoma. Actually, the term “cattle feeder” grossly understates what he does. The original Henry C. Fitch Feedlot with room for 52,000 head, joined by Hitch Feeder I with capacity for 59,000 animals and Hitch Feeder II which room for 48,000 head is a business that can handle almost 160,000 animals at any one time.

From the original feedlot, Hitch Enterprises Inc. has grown into an agricultural conglomerate that dominates the Oklahoma panhandle. Hitch Cattle Co. is the cattle buying arm, Hitch Ag Credit finances feedyards, Hitch Commodities does hedging and risk management, Hitch Ranch owns a 150 head cow herd and the wide spread family business even includes pork farrow-to-finish operations.

Paul is president of Hitch Enterprises Inc., chairman of the board, director and chief stockholder. He works on a variety of community and statewide activities, stepping onto the national stage through his activities with the National Cattlemen’s Beef Association. He’s served the organization as Live Cattle Marketing Committee Chairman and is now its president-elect. He’s been on the NCBA Board since 2000 and the executive committee since 2003. He’s also held positions with the Oklahoma Cattlemen's Association and the Texas Cattle Feeders Association.

It’s his experience in the cattle feeding business that led to this interview. Few people have his background and experience. Few people can talk with his authority about what’s going on in the industry today. What the price of corn will do to the future of the cattle business is something we all want to know. I asked Mr. Hitch to shed some light on the subject.

Q. The ethanol boom seems to be quickly rewriting all the rules in the cattle business. The most immediate impact in many peoples’ minds is what the skyrocketing price of corn is doing to feedyards. Mr. Hitch, you feed a few cattle. Can you tell me how it has impacted the business?

A. There’s an old saying that goes, “cheap corn makes for cheap cattle.” I can’t say that’s always true. But I can tell you one thing for sure – expensive corn makes for expensive cattle. With the price of corn almost doubling in one year, feeders’ costs have gone up dramatically. We have to pass some of those costs onto the packer - and ultimately the consumer - or we won’t stay in business very long.

But it is unrealistic to think we will be able to pass on all of this cost increase. If it was that simple, everyone could raise cattle. Feeders will have to absorb our share of the pain here, and it is also forcing us to pay a lower price for calves and feeder cattle. Those prices have rebounded some in the past month or so, but are unlikely to get back to the levels we saw in the first half of 2006 unless we get some relief on grain prices.

Q. The location of feedyards has been based on a lot of economic factors that contribute to operating efficiencies and the opportunity to make a profit – proximity to cattle and feed resources, for instance. With the price of corn leading other feed grains on a seriously upward trend and the rapid construction of ethanol plants near sources of raw materials, will we be witnessing a major restructuring of the feedyard business? Will operators be forced to relocate or develop new feed programs based on higher costs and shorter stays as cattle remain at pasture longer?

A. Grain prices have caused some shift in the cattle on feed numbers. Texas and Kansas are both down a bit from a year ago, while Iowa and Nebraska are up. This is also due to winter storms and some other factors, but clearly as you move further away from the corn belt, cost of gain have risen more.

Having said that, I don’t think we will see major relocations take place. Factors like climate and land availability make relocating feedlots a very tough endeavor. So I think you’re more likely to have some shifts in cattle numbers like we have seen recently, rather than a major revamping of the whole feeding industry.

Q. Grass fed beef has enjoyed a little “boomlet” recently. Could current conditions accelerate its growth or will corn-fed beef continue to dominate the North American market?

A. Grass-fed beef will continue to attract a following of certain consumers, for a variety of reasons. This following will likely grow as producers of grass-fed beef continue to improve the product. But grain-fed beef will dominate the American market as long as it delivers the flavor and value consumers are looking for. I see gains being made by grass-fed beef over the next several years, but no major shifts in consumer preference or production practices.

Q. Of course, as the price of bringing cattle to market increases, everything changes up and down the supply chain. What will happen to the price people are willing to pay for calves and feeder cattle?

A. As I noted above, feeders simply cannot pay the same prices we paid through much of 2005 and 2006, with grain prices where they are today. We are still paying very solid prices for quality calves and feeder cattle, because competition for those animals is still very robust. But if the record prices of the past couple of years are used as the benchmark, we are going to be paying less – there’s just no way around that.

Q. The National Chicken Council has claimed the boost in corn prices has increased the price of poultry by about six cents a pound at retail. The marketplace probably won’t accept it so the increased costs are being absorbed, at least for now, by the producer. While corn isn’t as critical to the final cost of a pound of beef, what will be its impact in the near future?

A. It’s true that cattle do not eat corn for as much of their life as hogs or chickens. Estimates attribute about 70 to 80 percent of total lifetime weight gain in hogs and chickens to feed grain, but only 35 to 40 percent for cattle. But let’s not kid ourselves – beef is going to feel a similar impact because corn is a still major input for our final product. I take some consolation in knowing that the major proteins I compete with are facing the same price pressures. So cattlemen should still fare pretty well in the competition for consumer dollars, but the meat industry could lose some market share to other food types. Cattlemen can also make better use of distiller’s grains than either pork or poultry producers. That’s not a complete solution, but it’s another strategy we can use to deal with high grain prices.

Q. Recently I interviewed Dr. Bryan McMurry, Beef Brand Manager for Cargill Animal Nutrition (Click here to read last week’s “Five minutes with Dr. Bryan McMurry) about traditional finishing diets for cattle in the United States. He’s concerned about the nutritional inconsistency of distiller’s grains as part of a feed program. What steps can be taken to assure adequate nutrition with a new and untested ingredient?

A. First I think it’s important to remember that all distiller's grains are not created equal. From what I understand, the quality of the by-product varies greatly from ethanol plant to ethanol plant. So I think it is very important for cattlemen to consider a single source for the product – and make sure that source is very reliable and dependable. If you try to cut corners, it will probably cost you in the long run.

We also need a lot more research on this subject. We shouldn’t make assumptions – good or bad – about the impact of distiller’s grains without detailed, thorough research. We need to know the impact on carcass quality, flavor, and consistency so that we can be sure that we continue to deliver a quality end product to consumers.

Q. What would you like to say to people in the beef business?

A. Keep in mind that water seeks its own level, and markets have a way of evening out. People will continue to eat beef. Sure, high grain prices are going to impact our incomes and force some adjustments in the livestock industry. But we don’t operate in a vacuum. All proteins are facing similar issues, and we’ll weather this challenge just as we have so many others.

With regard to ethanol and renewable fuels policy, I would like to appeal to everyone’s sense of fairness. Cattlemen are in favor of renewable fuels, but we need a level playing field when we purchase corn. The government doesn’t pay me to convert corn into beef, nor do I want them to. The United States doesn’t charge exorbitant tariffs on imported beef, nor do I want them to. Now that the ethanol industry is booming, it doesn’t need the kind of protection it receives from the fuel-blending tax credit and the tariff on imported ethanol. Those measures should be allowed to go away when they expire over the next few years. It’s not that cattlemen want to hamper ethanol production. It’s just time for that industry to stand on its own, and for every purchaser of grain to have equal footing in the marketplace.

Asking questions: Bob Dinneen, President, Renewable Fuels Association

In a story published sic weeks ago in the New York Times, Bob Dinneen dismissed the idea that a rapidly increasing investment bubble could burst before cellulosic ethanol has a chance to hit the market and take the pressure off corn prices.

Corn is the current heart of the ethanol industry, much to the chagrin of cattlemen everywhere. Other cellulosic resources, such as switch grass, are much more expensive conversions, often by a factor of two. Research holds the promise of narrowing that gap but success might still be several years away and there’s no guarantee that the plants currently designed to run on corn can be converted to another resource.

“I don’t get all that worried that we are building too fast,” he said. “I am not bright enough or foolish enough to try to control the market.”

Many who were either brighter or more foolish than Dinneen have tried. In the late 1970’s, the Bass Brothers tried to corner the market on silver. They got close, but no cigar. Today, the ethanol industry is awash in piles of silver: volatile investment money lured by the ephemera of renewable fuel’s huge, short-term profit potential.

It certainly has the odor of the great dotcom run-up of the late 1990’s - lots of money rushing in to fill a real or imagined business proposition, followed by an inevitable and painful shakeout as only the strongest survive.

Dinneen looks at it as an opportunity for American agriculture, at least for the corn growing segment. Those folks who raise cattle, hogs or poultry may disagree. One thing is certain: there will be some changes in what those animals are fed in the next few years and the livestock industry will be forced to adjust.

But he sees the ethanol business as requiring federal support through tax incentives to “build” itself into a strong and mature industry. A statement he read before the House of Representatives small business committee in May, 2004 strongly urged federal incentives. Now, almost three years later, he still stands behind that plea. (Editor’s note: When an industry storms across the billion dollar a year mark, shouldn’t it be called big business?)

Let’s ask a few questions of Mr. Dinneen about future of American agriculture.

Q. First, let’s take a look at what the alarmists are saying. A recent news story in Meatingplace.com made some alarming statements. It quoted Gene Gourley, an Iowa pork producer and swine nutritionist, testifying on behalf of the National Pork Producers Council to the Senate Agriculture Committee that ethanol producers are receiving huge subsidies of $1.53 per bushel of corn purchased and tax credits of $0.51 per gallon of ethanol produced, resulting in runaway growth in ethanol production. “These incentives have the ethanol industry growing at an almost unbelievable pace,“ he said in his testimony. “New plants are springing up everywhere, and they’re using a lot of corn.”

A. The same story said Lester R. Brown, president of Washington think tank Earth Policy Institute, compiled figures concerning ethanol plant construction and planned construction, and suggested that USDA projections of the amount of corn needed to feed the ethanol industry are far short of actual demand. “By 2008,” he said, “automobiles will be eating as much corn as is in the food system, and that will endanger the global food supply. One 25-gallon tank of ethanol consumes an amount of corn that would directly or indirectly feed a person for a year.”

Q. Janet Larsen, director of research at EPI, said corn growers may or may not make up the difference by planting more and more productive corn, but the inevitable result is higher food prices. “Increasing the subsidies for ethanol production, as the Democrats are suggesting, is completely uncalled for,” she told Meatingplace. “Higher food prices could cause a consumer backlash against ethanol.”

EPI suggests instead that fuel efficiency standards be increased to lower dependence on ethanol and that tax credits for ethanol production be reduced or eliminated.

Although it would be hard to refute Gourley’s claim that ethanol plants are springing up everywhere, the other statements might be open to interpretation. What are your responses?

A. Without question, the growth the U.S. ethanol industry is causing some adjustment in both motor fuel and agricultural markets. But markets have a knack for adjustment and we are seeing that happen today.

In recent months, American farmers have gotten the market signal that more corn will be needed. This added production will come from the ever-increasing yields generated by new hybrids of corn as well as by the planting of additional acres. With a good growing season in the Corn Belt, the preliminary reports of farmers planting intentions could yield a corn crop well in excess of 13 billion bushels. That would more than satisfy the feed, fiber and fuel markets for corn.

While farmers are making the necessary adjustments, the U.S. ethanol industry is improving its efficiency and its technology. Improvements industry wide are yielding far greater volumes of ethanol from the same bushel corn, today averaging 2.8 gallons per bushel. Technological developments are also bringing cellulosic ethanol production from corn stalks and switch grass closer to reality than many people would think.

American farmers are more than capable of feeding the world and fueling our nation. More corn will be produced, new technologies will be developed and agricultural markets will adjust. The U.S. ethanol industry has been a tremendous success story in rural America, providing not just a better return on investment for farmers but real economic opportunity on Main Street.

Critics of ethanol tend to take just a snapshot in time and fail to see the big picture. The industry as it exists today will not be the industry we see just three years from now. Corn and petroleum markets will likely look different in the future as well. But the real result of these changes will be a stronger rural economy and a more secure energy future for all Americans.

Q. In the Los Angeles Times, Sara Hessenflow Harper, a national security and climate policy analyst with Environmental Defense in Washington, D.C., said that newer forms of “cellostic“ ethanol fuel are being developed from rice stock, cow manure, wood chips and other California agricultural products, and that they could make a big dent in carbon-based fuels. As an example, she cited Brazil, where ethanol from sugarcane is widely used.

“Unfortunately, for too long, the environmental movement has looked at ethanol for all its negatives … instead of looking at what it could be,“ Harper said. What can you say about the positives of increased ethanol use as well as production alternatives to corn?

A. Sarah Hessenflow Harper and the Environmental Defense have indeed recognized that cellulosic ethanol technology will be built upon the foundation of grain processing, and that both forms of ethanol production are significantly better than gasoline. The benefits of ethanol production and use run the spectrum from environmental to national security to economic.

Ethanol production in 2006 alone helped create 160,000 new jobs and raise household incomes by some $6 billion. The production and use of nearly five billion gallons of domestic ethanol also reduced our dependence on foreign oil by some 170 million barrels. That meant more than $11 billion stayed here at home as opposed to being sent to place like Venezuela.

Last years ethanol use also reduced greenhouse gas emissions by the equivalent of taking more than one million cars off American roads.

The benefits ethanol offers will only continue to grow as ethanol production and use expand. As new areas begin producing ethanol and new feedstocks are developed, the ethanol industry is poised for exponential growth. The result will be economic opportunity spreading beyond the small communities of the Midwest, a tremendous reduction in greenhouse gas emissions, and a bold statement about America’s commitment to energy independence.

Q. The Governors’ Ethanol Coalition claims governors representing about half the states are members and they’re calling for a doubling of production by 2010 – just three short years from now. There are at least half a dozen federal agencies with an interest in ethanol, too, indicating a large political backing for increasing production. If ethanol is indeed the fuel of the future, what will that future look like? Talk to me about the changes that might occur in fuel retailing, automobiles, farm equipment and what the cost-per-gallon might be if the industry grows to the point that it will no longer need federal subsidies to thrive.

A. There is tremendous bipartisan support for expanding the production and use of renewable fuels all across the country. More than four out of five voters believe the government needs to be investing far more aggressively in renewable fuels to reduce our dependence on foreign oil. The most important factor assuring the continued growth in domestic renewable energy is consistent federal tax, trade and fuel standard policy. If we are to reach the goals many Americans hope for with respect to energy independence, we must not repeat the mistakes of the past and allow our support for renewable fuels to waver.

But, as our industry expands and the use of ethanol spreads, changes in our fueling infrastructure will be needed: new blending facilities capable of handling larger volumes of ethanol will be required, more stations will need to be equipped to dispense E85 (85% ethanol), and greater production of vehicle capable of maximizing the benefits of higher ethanol blends will have to come.

Fortunately, all of these are happening. Today, more than 1,000 E85 retail stations exist across the country. During a meeting at the White House, America’s major automakers pledged to produce half of their new vehicles as flexible fuel by 2012.

Likewise, as you see new feedstocks, such as corn stalks and switch grass, turned into ethanol, it will require machinery to not only harvest the grain but gather and deliver the cellulosic material that remains.

The opportunities that the increased production of renewable fuels offer American agriculture are exciting and at the same time challenging. I, for one, would prefer to put the energy future of our country in farmers’ hands than trust hostile dictatorships across the globe.

Q. With more and more farmer’s coalitions backing the construction of new ethanol facilities come the potential of tremendous economic growth in some economically disadvantaged rural areas. At the same time, the current increase in the price of corn has hurt the cattle, pork and poultry industries. With increased usage of corn for ethanol production, the prospect of steadily rising prices looms and it indicates a major change in the financial structure of U.S. agriculture might be well underway. What are your thoughts on the subject?

A. Change in coming to American agriculture. There is no doubt about it. But opportunities abound.

Ethanol is the most effective value-added industry for American agriculture. It is allowing farmers to not only receive a more reasonable price for their crop but to invest in an industry adding value to their bushels.

Opportunities for synergistic relationships between ethanol production and the livestock industry are just now being discovered. Ethanol facilities in Nebraska and Texas are turning billions of pounds of cattle manure into the power source for ethanol production. At the same time, they are able to feed wet distillers grains, the high nutrient co product of ethanol production, right back to the herds literally using both ends of the cows. Similar relationships could be established with poultry producers as well.

As USDA Secretary Johanns has stated, it will take some time for the market to sort its way out. It is important that all of American agriculture keep the big picture in mind. I believe what comes of the rise of rural America will be a benefit to all of agriculture.

Increased ethanol production isn’t just a North American phenomenon. Brazil is a major player and we can expect any country with a significant farm economy to step in. What other countries will participate and what will happen to world energy usage – what kinds of resources will be consumed and how they will be consumed – as production increases?

There isn’t a corner of the globe today that isn’t looking at renewable fuel production and use for many of the same reasons as the U.S. Beyond Brazil, nations like China, India and those in the European Union have all taken aggressive steps to foster their own domestic renewable fuels industries utilizing the feedstocks available to them.

In the not too distant future, a world market for ethanol will truly develop and may even present opportunities for U.S. companies to export ethanol. The co product of ethanol production, distiller’s grains, is already establishing a world market as the European Union and Japan continue to increase their use of this high value livestock feed.

As the industry moves to grain and cellulose production, technology around the globe will evolve to take advantage of the many energy crops available. It may be palm oil for biodiesel, sugarcane for ethanol or other feedstocks for biobutanol and other renewable fuels.

Q. Some lawmakers say ethanol will be the major driver behind the new farm bill. Backing that claim, Senator Harkin, the Senate Agriculture Committee Chairman and the Chair when the last farm bill was written in 2002, has set a hearing on renewable fuels as the Committee’s first of 2007. What effect do you see ethanol having on the bill?

A. Ethanol and renewable fuels will no doubt play a significant role in the development and passage of the next farm bill. Renewable fuel production is leading a rural renaissance across the country that can’t be ignored. Senator Harkin, Congressman Peterson and every other lawmaker on Capitol Hill understand the importance of ethanol not only to rural Americans, but to our nation’s energy and national security as well.