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+ - SUBCOMMITTEE ON REGULATIONS AND HEALTHCARE HEARING ON IMPACT OF FOOD RECALLS ON SMALL BUSINESSES
+
+[House Hearing, 111 Congress]
+[From the U.S. Government Publishing Office]
+
+
+
+ SUBCOMMITTEE ON
+ REGULATIONS AND HEALTHCARE
+ HEARING ON IMPACT OF
+ FOOD RECALLS ON SMALL BUSINESSES
+
+=======================================================================
+
+ HEARING
+
+ before the
+
+
+ COMMITTEE ON SMALL BUSINESS
+ UNITED STATES
+ HOUSE OF REPRESENTATIVES
+
+ ONE HUNDRED ELEVENTH CONGRESS
+
+ FIRST SESSION
+
+ __________
+
+ HEARING HELD
+ MARCH 11, 2009
+
+ __________
+
+ [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
+
+
+ Small Business Committee Document Number 111-008
+Available via the GPO Website: http://www.access.gpo.gov/congress/house
+
+ ----------
+ U.S. GOVERNMENT PRINTING OFFICE
+
+47-797 PDF WASHINGTON : 2009
+
+For sale by the Superintendent of Documents, U.S. Government Printing
+Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
+DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC,
+Washington, DC 20402-0001
+
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+ HOUSE COMMITTEE ON SMALL BUSINESS
+
+ NYDIA M. VELAZQUEZ, New York, Chairwoman
+
+ DENNIS MOORE, Kansas
+
+ HEATH SHULER, North Carolina
+
+ KATHY DAHLKEMPER, Pennsylvania
+
+ KURT SCHRADER, Oregon
+
+ ANN KIRKPATRICK, Arizona
+
+ GLENN NYE, Virginia
+
+ MICHAEL MICHAUD, Maine
+
+ MELISSA BEAN, Illinois
+
+ DAN LIPINSKI, Illinois
+
+ JASON ALTMIRE, Pennsylvania
+
+ YVETTE CLARKE, New York
+
+ BRAD ELLSWORTH, Indiana
+
+ JOE SESTAK, Pennsylvania
+
+ BOBBY BRIGHT, Alabama
+
+ PARKER GRIFFITH, Alabama
+
+ DEBORAH HALVORSON, Illinois
+
+ SAM GRAVES, Missouri, Ranking Member
+
+ ROSCOE G. BARTLETT, Maryland
+
+ W. TODD AKIN, Missouri
+
+ STEVE KING, Iowa
+
+ LYNN A. WESTMORELAND, Georgia
+
+ LOUIE GOHMERT, Texas
+
+ MARY FALLIN, Oklahoma
+
+ VERN BUCHANAN, Florida
+
+ BLAINE LUETKEMEYER, Missouri
+
+ AARON SCHOCK, Illinois
+
+ GLENN THOMPSON, Pennsylvania
+
+ MIKE COFFMAN, Colorado
+
+ Michael Day, Majority Staff Director
+
+ Adam Minehardt, Deputy Staff Director
+
+ Tim Slattery, Chief Counsel
+
+ Karen Haas, Minority Staff Director
+
+ .........................................................
+
+ (ii)
+
+
+ Subcommittee on Regulations and Healthcare
+
+ KATHY DAHLKEMPER, Pennsylvania, Chairwoman
+
+
+DAN LIPINSKI, Illinois LYNN WESTMORELAND, Georgia,
+PARKER GRIFFITH, Alabama Ranking
+MELISSA BEAN, Illinois STEVE KING, Iowa
+JASON ALTMIRE, Pennsylvania VERN BUCHANAN, Florida
+JOE SESTAK, Pennsylvania GLENN THOMPSON, Pennsylvania
+BOBBY BRIGHT, Alabama MIKE COFFMAN, Colorado
+
+ ______
+
+
+ (iii)
+
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+
+
+
+
+
+ C O N T E N T S
+
+ ----------
+
+ OPENING STATEMENTS
+
+ Page
+
+Dahlkemper, Hon. Kathy........................................... 1
+Westmoreland, Hon. Lynn.......................................... 2
+
+ WITNESSES
+
+Petersen, Dr. Ken, Assistant Administrator, Office of Field
+ Operations, Food Safety and Inspection Service, Department of
+ Agriculture.................................................... 4
+Solomon, Dr. Steven, Assistant Commissioner for Compliance
+ Policy, Office of Regulatory Affairs, Food and Drug
+ Administration................................................. 6
+Austin, Ms. Diane, Vice President, Perry's Ice Cream, Co., Inc.,
+ On behalf of The International Dairy Foods Association......... 20
+Ambrosio, Mr. Mike, Vice President, Quality Assurance, Wakefern
+ Food Corporation, On behalf of The Food Marketing Institute.... 22
+Conrad, Mr. Ken, President, Libby Hill Seafood Restaurants, Inc.,
+ Greensboro, NC On behalf of The National Restaurant Association 24
+Koehler,Mr. Don, Executive Director, Georgia Peanut Commission,
+ Tifton, GA..................................................... 26
+Vanco, Ms. Sheryl, Dairy Farmer, Bear Lake, PA, On Behalf Of The
+ National Farmers Union......................................... 28
+
+ APPENDIX
+
+
+Prepared Statements:
+Dahlkemper, Hon. Kathy........................................... 38
+Petersen, Dr. Ken, Assistant Administrator, Office of Field
+ Operations, Food Safety and Inspection Service, Department of
+ Agriculture.................................................... 40
+Solomon, Dr. Steven, Assistant Commissioner for Compliance
+ Policy, Office of Regulatory Affairs, Food and Drug
+ Administration................................................. 50
+Austin, Ms. Diane, Vice President, Perry's Ice Cream, Co., Inc.,
+ On behalf of The International Dairy Foods Association......... 63
+Ambrosio, Mr. Mike, Vice President, Quality Assurance, Wakefern
+ Food Corporation, On behalf of The Food Marketing Institute.... 71
+Conrad, Mr. Ken, President, Libby Hill Seafood Restaurants, Inc.,
+ Greensboro, NC On behalf of The National Restaurant Association 78
+Koehler,Mr. Don, Executive Director, Georgia Peanut Commission,
+ Tifton, GA..................................................... 83
+Vanco, Ms. Sheryl, Dairy Farmer, Bear Lake, PA, On Behalf Of The
+ National Farmers Union......................................... 87
+
+Statements for the Record:
+Bright, Hon. Bobby............................................... 95
+Murray, Mr. Taz, CEO, Dynamic Confections........................ 96
+
+ (v)
+
+
+
+
+ SUBCOMMITTEE ON REGULATIONS AND HEALTHCARE HEARING ON
+ IMPACT OF FOOD RECALLS ON SMALL BUSINESSES
+
+ ----------
+
+
+ Wednesday, March 11, 2009
+
+ U.S. House of Representatives,
+ Committee on Small Business,
+ Washington, DC.
+ The Subcommittee met, pursuant to call, at 10:00 a.m., in
+Room 2360 Rayburn House Office Building, Hon. Kathy Dahlkemper
+[chairwoman of the Subcommittee] presiding.
+ Present: Representatives Dahlkemper, Westmoreland, King,
+Buchanan, and Thompson.
+ Also Present: Representative Graves.
+ Chairwoman Dahlkemper. This hearing of the impact of food
+recalls on small businesses is now called to order. From the
+dinner table to the grocery store, most Americans take the
+safety of their food for granted. But what happens when that
+food is jeopardized?
+ Recent outbreaks of Salmonella and E. Coli have shown that,
+as much as we would like to believe otherwise, we cannot always
+assume the food our families are eating is safe. This past
+January, a Salmonella outbreak in peanut butter tainted a wide
+range of products, from crackers to candy bars. The epidemic
+killed 9 people, sickened hundreds, and kicked off one of the
+largest food recalls in U.S. history.
+ The men and women on the front lines getting products off
+the shelves and educating consumers about which foods are safe
+to eat were small business owners. They did this not because
+they had to--after all, they weren't the ones who created the
+problem--but because they felt the responsibility towards their
+customers. But for all the good that these entrepreneurs did
+for customers, there is a very real economic side to this
+stepping in to do the right thing.
+ Now that the Peanut Corporation of America has declared
+bankruptcy, small businesses are the ones left holding the bag.
+In today's hearing, we will examine the effects of a food
+safety crisis on entrepreneurs. More importantly, we will look
+for solutions moving forward.
+ For small firms, managing a food safety crisis is an
+enormous financial burden. They not only have the
+responsibility of tracking down and destroying tainted
+products, but they often have to dispatch costly damage control
+campaigns; whereas, large firms can often afford to retain
+public relations firms. Most entrepreneurs cannot. This can be
+especially damaging considering the stigma attached to tainted
+products.
+ Even foods not directly affected have been stigmatized. In
+the case of the Salmonella outbreak, jarred peanut butter sales
+plummeted 22 percent. Peanut butter cookies also stayed on the
+shelves, with purchases own 14.6 percent. These drop-offs have
+been devastating for the broad range of small businesses that
+sell peanut butter products, from 7-11 franchises to boutique
+bakeries.
+ Food safety crises are particularly hard on small
+businesses. Because many of these firms operate on tight profit
+margins, generally between 2 and 5 percent, large recalls can
+mean bankruptcy. This is especially true for small firms that
+cannot afford recall insurance.
+ Even companies that do have these policies are struggling
+to recoup their costs. Many insurance providers are now
+refusing to fill peanut butter-related claims, arguing that
+they are the PCA's responsibility.
+ Perhaps the most frustrating aspect of the Salmonella
+epidemic is the fact that it could have been avoided. To begin,
+the regulatory process is fragmented with different foodstuffs
+falling under different agency jurisdictions. These divisions
+prevent authority from properly responding to outbreaks. On top
+of that, agencies like the FDA are often understaffed and
+overwhelmed.
+ In response to the spotty inspection system, many large
+businesses have taken food safety into their own hands. In
+fact, some large firms have gone so far as to hire their own
+private inspectors. Yet, this is not likely the best response
+to this issue.
+ From the fields to the processing plant to the grocery
+store to the dinner table, small businesses are an integral
+part of our food supply chain. But recent recalls have made us
+question the safety of our food. And they have not only
+jeopardized the health of our families. They have put an
+important part of the small business community at risk.
+ I would like to thank all of today's witnesses in advance
+for their testimony and, with that, yield to the Ranking Member
+for his opening statement.
+ Mr. Westmoreland. Thank you, Madam Chairwoman, for holding
+this hearing today and for your comments. I would also like to
+thank all of the witnesses for their participation today in
+coming up to D.C. to inform us of some of the situations and
+some of the solutions that our government is looking at.
+ I would also like to thank you for having such a great
+topic as our first hearing. And so I know that we will have
+many more that are going to give us an opportunity to work
+together on some of the problems that small business faces
+today in our country.
+ We are here today to discuss the impact food recalls have
+on small businesses, but I want to start off by saying how
+sorry I am to those who are harmed by the recent string of food
+contamination. It is a frightening situation. And I can't
+imagine what it would have been like if it had happened to me
+or someone, one of my loved ones.
+ Unfortunately, the origin of the contaminated peanuts
+happened in my home State. Madam Chairwoman, I am here to tell
+you today that I am very disappointed that one bad actor could
+have caused such a devastating effect on so many others, but I
+am also here to tell you that we have some of the greatest,
+best, most dedicated farmers in the United States, if not the
+world. And so it was certainly not the intention of any crop
+that they had grown to get into the situation that we are in
+today.
+ The Peanut Corporation of America's lack of integrity has
+punished small businesses in Georgia and nationwide. Georgia's
+peanut industry has taken a huge blow. And farmers and small
+businesses have felt the serious economic impact of this
+recall.
+ Let me remind you farmers do business with other small
+businesses. And because of this, I believe we have yet to see
+the worst of the food recall.
+ In these tough economic times, our small businesses cannot
+afford the domino effect that occurred because of bad players
+or because of burdensome regulation. I hope we can all learn
+from this situation and maybe reach some solutions to the
+problems we face.
+ The safety of our nation's food supply is a pressing issue,
+but it is important to address how government agencies work to
+assist those indirectly affected by food recalls. Government's
+bureaucratic web, combined with the lack of resources, can
+often contribute to the regulatory burdens working against
+small businesses. And, as I have experienced in my 5 years in
+Congress, sometimes this is a knee-jerk reaction group up here,
+rather than proactive.
+ I do not agree that placing more regulatory Band-Aids on a
+wound is the right answer. Rather, having a reactive government
+that should rely on science-based information and utilize the
+resources that we have for prevention.
+ If Congress decides to authorize more power and money to
+our agencies, I hope to see the measures that streamline
+policies and encourage agencies to work closely with the state
+and local entities when recalls occur.
+ The FDA and the USDA have an obligation to the public to
+address a food recall situation, reveal the source, and inform
+the public as quickly and as accurately as possible. I am
+looking forward to examining the ways that USDA and the FDA can
+assist small businesses who are adversely affected by these
+food recalls.
+ Our country has been a worldwide leader in food safety
+measures imposed by a strict regulatory structure leading to
+the safest food supply in the world. However, accidents do
+occur. And our job on this Committee is to examine how these
+situations affect our nation's small businesses and the public.
+ I hope this hearing provides insight on the serious impact
+food recalls have on some of these small businesses and
+especially the farmers that grow the product.
+ This Congress faces a great challenge as it tries to help
+small businesses survive in this recession. The timing of this
+recall could have not been worse, but I am hopeful that the
+work of this Subcommittee will do its part in answering this
+challenge. I welcome this distinguished panel and thank you all
+for your willingness to testify.
+ With that, Madam Chair, I yield back.
+ Chairwoman Dahlkemper. Thank you, Mr. Westmoreland.
+ We will now move to the testimony from our first panel of
+witnesses. Witnesses will have 5 minutes to deliver their
+prepared statements. The timer begins when the green light is
+illuminated. When one minute of time remains, the light will
+turn yellow. And the red light will come on when your time is
+up.
+ Our first witness is Dr. Ken Petersen. Dr. Petersen is the
+Assistant Administrator of the Office of Field Operations for
+the Food Safety and Inspection Service of the Department of
+Agriculture. FSIS is the public health agency within USDA
+responsible for ensuring that the nation's commercial supply of
+meet, poultry, and egg products are safe.
+ Thank you, Dr. Petersen.
+
+ STATEMENT OF KEN PETERSEN
+
+ Mr. Petersen. Good morning, Madam Chairwoman and members of
+the Committee. I want to thank you for inviting me to appear
+before you today to address the Food Safety and Inspection
+Service's recall procedures and outreach to small businesses.
+ I am Dr. Kenneth Petersen, Assistant Administrator for the
+Office of Field Operations with the Food Safety and Inspection
+Service, U.S. Department of Agriculture.
+ FSIS is the public health regulatory agency within the
+USDA. We are responsible for ensuring that the nation's
+commercial supply of meat, poultry, and processed egg products
+is safe, secure, wholesome, accurately labeled and packaged,
+whether the products are domestic or imported.
+ Industry is responsible for the production of safe food
+while FSIS continuously inspects each livestock and poultry
+carcass at slaughter and visits processing establishments at
+least once per shift per day.
+ Regarding recalls, the purpose of a recall is to remove
+meat and poultry from commerce as quickly as possible when FSIS
+has reason to believe it is adulterated or misbranded. Recalls
+are voluntary actions taken by industry at the request of the
+Agency. This is a rapid and efficient way to determine where
+affected product has been distributed because companies are
+familiar with who their customers are and can notify them much
+more quickly than the Federal government could. Should a firm
+deny FSIS' request for voluntary recall, the Agency has the
+authority to detain and, if necessary, seize product in
+commerce.
+ FSIS may become aware of adulterated or misbranded product
+in commerce in several ways. We may be alerted to a potential
+recall situation by the company that manufactures or
+distributes the product, by test results from our own sampling
+programs, observations or information gathered by our
+inspectors, consumer complaints, or epidemiological or
+laboratory data submitted by State or local departments, other
+USDA or Federal agencies.
+ FSIS is able to convene a recall committee in a matter of
+hours 24/7. After recall occurs, FSIS conducts effectiveness
+checks to ensure that the consignees have received notice of
+the recall and are making appropriate efforts to retrieve and
+destroy the product or return it to the recalling firm.
+ This past August 18th, 2008, in order to improve the
+effectiveness of a recall, FSIS began making available to the
+public a list of retail customers that are likely to have
+received products subject to a recall. We believe this
+information helps consumers lower their risk of foodborne
+illness by providing more information that may assist them in
+identifying recalled products.
+ FSIS' food safety system is preventative. It is our goal to
+eliminate the need for recalls altogether. One way we do this
+is through education and outreach. By educating producers and
+manufacturers of FSIS-regulated products, we continually seek
+to protect public health and, accordingly, the need for recalls
+at all.
+ Some of the most important groups that FSIS works with are
+the small and very small plants. The businesses that fall into
+this category have a particular need for current and frequent
+food safety information because they often lack the resources
+to monitor food safety developments from the Agency, academia,
+or trade associations. To address the challenges that these
+companies face and to further the Agency goals of minimizing
+the need for recalls, FSIS has initiated several efforts to
+work with small and very small plants.
+ We have an action plan to deliver outreach assistance to
+promote food safety and food defense systems for small and very
+small plants. Last year, as part of that plan, FSIS established
+a new program office, the Office of Outreach, Employee
+Education and Training, to provide comprehensive one-stop
+assistance to owners and operators of small and very small
+plants.
+ This office provides consolidated access, resources, and
+technical support for small and very small plants. Over the
+past two years, FSIS has held a series of regulatory education
+sessions around the country to deliver various topics of
+interest to small business. We intend to continue this
+successful effort.
+ In January 2009, FSIS began holding a series of ``how to''
+workshops to provide practical tools and methods for the proper
+application of and compliance with various regulatory
+requirements. These workshops are designed so that the small
+and very small plant operators can walk away from the workshop
+with a plan that they can immediately implement, such as a
+recall plan.
+ FSIS has a variety of resources available through the FSIS
+Web site, including podcasts and access to educational Web
+seminars. It also includes access to FSIS compliance guidance
+that helps small and very small plants apply public health
+regulations in their working environment.
+ In conclusion, FSIS' system for achieving food safety is
+strong. We continually seek to protect public health. And we
+take this responsibility very seriously. We focus on preventing
+recalls at the plant level through inspection and outreach to
+producers and manufacturers of FSIS-regulated product. FSIS
+will work to ensure that small and very small businesses
+continue to meet their food safety requirements.
+ Thank you for this opportunity to appear before you today.
+I am happy to take any questions at the appropriate time.[The
+prepared statement of Ken Petersen is included in the appendix
+at page 40.]
+ Chairwoman Dahlkemper. Thank you, Dr. Petersen.
+ We would like now to hear from Dr. Steven Solomon from the
+FDA. Dr. Steven Solomon is the Deputy Associate Commissioner
+for Compliance Policy at the Food and Drug Administration.
+ The FDA regulates almost 124,000 business establishments
+that annually produce, warehouse, import, and transport $1
+trillion worth of consumer goods. Among other things, the FDA
+is responsible for protecting the public health by assuring the
+safety of our nation's food supply.
+ Thank you, Dr. Solomon.
+
+ STATEMENT OF STEVEN SOLOMON
+
+ Mr. Solomon. Good morning, Madam Chairman and members of
+the Subcommittee. I am Dr. Steven Solomon, Assistant
+Commissioner for Compliance Policy in the Office of Regulatory
+Affairs at the U.S. Food and Drug Administration, which is part
+of the Department of Health and Human Services.
+ We appreciate the opportunity to provide you with
+information about how we manage the recall of FDA-regulated
+products that can harm consumers, including the ongoing recalls
+related to peanut products made by the Peanut Corporation of
+America, or PCA. As you know, these products have been the
+source of a foodborne illness outbreak caused by Salmonella
+Typhimurium, which as of March 8th has infected 683 people in
+46 states and may have contributed to 9 deaths.
+ One of the key messages that FDA has been emphasizing over
+the last few years is that all food companies, both large and
+small, should establish strong food safety programs. It is
+critically important for these companies to understand the
+supply chain for the ingredients they use in their products and
+to have accurate information about the safety and quality of
+their ingredients. In a complex, global market, this may
+require close interaction with many critical components
+throughout the food supply chain, including growers,
+manufacturers, distributors, retailers, food service providers,
+and importers.
+ When a marketed product presents a public health hazard,
+promptly recalling that product is the most effective means of
+protecting the public. For food products, with the exception of
+infant formula, FDA does not have the authority to order the
+recall of a food or dietary supplement. In most cases,
+companies recall their products voluntarily. FDA believes that
+the prompt removal of volatile products from the marketplace is
+in the industry's and the public's best interest.
+ As illustrated by the recent events, a recall initiated by
+one company can sometimes have repercussions for a very large
+number of businesses that receive those products or
+ingredients.
+ In most cases, the recalling firm and FDA work
+collaboratively to develop a recall strategy. Early
+communication helps to ensure that violative products are
+removed from the market quickly, which can help to minimize the
+adverse impact on affected businesses. It also allows FDA to
+determine the steps needed to address specific circumstances,
+which may include making certain that all products that need to
+be recalled are, in fact, recalled; locating the product
+subject to the recall; identifying the cause of the problem;
+and checking similar firms or products to determine if the
+problem is more widespread. Rest assured that FDA is sensitive
+to the impact on small businesses caught in a recall scenario.
+ FDA is committed to working recalling firms to effectively
+and promptly remove volatile products from the marketplace. And
+we have a variety of mechanisms in place to achieve this goal.
+For example, FDA has field recall coordinators located
+throughout the country who act as the point of contact for
+recalling firms and works closely with them throughout the
+process.
+ Recall coordinators help firms develop an effective recall
+strategy, review a firm's letter to customers affected by the
+recall, and coordinate the destruction, reconditioning, and
+disposition of recalled product.
+ FDA has also developed model press releases that firms can
+use to inform the public about a recall. These model press
+releases help ensure that critical information about the
+recalled product is accurately and appropriately conveyed to
+the public.
+ For recalls of widely distributed products, FDA recently
+developed a searchable database for its Web site to help the
+public and recalling firms identify recalled products. The
+database can be updated daily with important information,
+including brand name, recalling firm, UPC code, size, and
+product description.
+ In the recent peanut outbreak, there have been over 3
+million hits to date on the site. In this outbreak, we learned
+of at least one small business that used the searchable
+database to identify a recalled peanut ingredient product that
+the business had used in its finished product. The firm
+initiated a recall of its own products, even before receiving
+notification from its supplier.
+ As discussed in more detail in my written testimony, the
+agency's investigation of the Salmonella Typhimurium outbreak
+associated with PCA's peanut products resulted in a series of
+recalls that began on January 20th with products made in the
+Blakely, Georgia facility. Since then the scope has expanded as
+we identify companies that use PCA's products as ingredients in
+their own products.
+ On February 12th, the State of Texas issued an emergency
+order directing PCA to cease the manufacture and distribution
+of all food products at the Plainview, Texas facility and
+issued a mandatory recall order for all products manufactured
+at that plant.
+ On February 20th, PCA issued a statement that it had filed
+for chapter 7 bankruptcy and would no longer able to
+communicate with their customers about recalled product. As a
+result, FDA is coordinating with Texas officials to notify
+customers that received product from the Texas facility and
+follow up with these companies as needed.
+ Many companies that received recalled product from PCA
+have, in turn, conducted voluntary recalls themselves. These
+companies use recalled PCA products as ingredients in their own
+products, exponentially increasing the scope of the recall.
+ FDA continues to work to identify products that may be
+affected and to track the ingredient supply chain of these
+products. The facts of this outbreak as well as our experience
+with other outbreaks highlights the need to enhance FDA's
+statutory authority to protect consumers from foodborne
+outbreaks.
+ We are currently reviewing with the Department of Health
+and Human Services the agency's prior legislative requests to
+strengthen our ability to protect Americans from foodborne
+illness.
+ Food safety is a priority for the new administration. One
+of the areas under discussion is mandatory recall authority,
+which would be a useful tool in some circumstances to
+effectuate removal of implicated product from Commerce. We are
+also discussing the need for new or enhanced authority for FDA
+to require preventative controls, exercise enhanced access to
+food records during routine inspections, and require food
+facilities to renew their registrations more frequently and
+modify the registration categories.
+ Thank you for the opportunity to discuss FDA's recall
+process. And I would be happy to answer any questions you may
+have.[The prepared statement of Steven Solomon is included in
+the appendix at page 50.]
+ Chairwoman Dahlkemper. Thank you, Dr. Solomon.
+ I would like to stay on the subject that you just finished
+discussing, the actual recent contaminated peanut product
+recall. Let's go back to the beginning because I think we all
+know that if we can stop a contaminated product from even
+leaving or even being produced, we're going to save a lot of
+money and we're going to save a lot of small businesses a lot
+of financial burden, a lot of headaches.
+ So as we look at this entire scenario of what happened at
+the Peanut Corporation of America, what regulatory failures led
+to this incident? Can you give me some specifics about exactly
+what could have been done to prevent the scenario from
+happening?
+ Mr. Solomon. Thank you for the question. So this facility
+at PCA we have now uncovered through the subsequent inspections
+that they knew about some problems associated with Salmonella
+in this facility.
+ FDA does not have routine access to those type records. In
+fact, we had to issue some authorities we have under the
+Bioterrorism Act that Congress passed previously a request to
+actually get all of the records from the firm. In order for us
+to get those type records, we need to be in a situation where
+there is a significant consequence or adverse health effects,
+so a very severe outbreak situation in order for FDA to have
+access to those type records. So that is one of the requests
+when I just mentioned some of the authorities we are looking at
+is routine access to such records is one of the aspects that we
+think would be important.
+ The other issues relate to our request. FDA issued a food
+protection plan last year and is looking for greater
+preventative controls. We all recognize that recalls are a
+reactive piece. And we all want to get into the preventive
+controls aspect.
+ So right now there are GMPs that apply, but trying to
+analyze what the hazards are in different type facilities and
+then how you control those hazards is not one of the controls
+that are currently done in this type facility. We do do those
+types of controls in the area of seafood and juice controls. So
+one of the other areas is greater preventive controls we are
+looking for.
+ Chairwoman Dahlkemper. So no physical? A lot of the
+inspection is visual when you go into these plants at this
+point?
+ Mr. Solomon. It is records. It is a visual examination. And
+it is a sampling.
+ Chairwoman Dahlkemper. Okay. So you do do sampling?
+ Mr. Solomon. We do do sampling. What we have learned from
+these is that traditionally a product like a peanut butter
+manufacturer is a plant that has a very dry environment. And
+dry environments don't allow, really, for the growth of
+bacteria, like Salmonella, traditionally.
+ We have learned through the previous ConAgra and this
+recent one that the introduction of moisture into a dry plant
+allows for the opportunity of these bacteria to grow. So that
+has changed our inspectional approach.
+ And what we would like firms to be doing is doing a lot of
+environmental testing because testing finished product does not
+give you the entire answer because the bacteria only
+periodically develops into finished products. So extensive
+controlling of your environment, making sure that it stays in a
+dry environment in the case of a plant like this, are critical
+to try and control those hazards. That is part of the kind of
+preventive controls we are looking for.
+ Chairwoman Dahlkemper. Because I am just trying to
+understand. You know, I have a background. I was a dietician
+for over 25 years. So I have been in lots of facilities where
+food has been produced or food has been served. And knowing
+that visually you have to do physical testing to be able to
+really see if there is some--you can look at a doorknob and it
+looks fine, but we all know what could be on a doorknob.
+ So that is what I guess I am getting at. You know, what
+kind of physical testing is being--there is really no mandatory
+physical testing at this point or--
+ Mr. Solomon. There are no controls required on the farms to
+do that type testing. That would be part of a more elaborate
+preventive control program.
+ FDA's inspectional approaches do include environmental
+testing. So when you go into such facility--and we did it
+during the recent inspection of PCA--taking several hundred
+environmental samples to try and understand what type of
+bacteria pathogens may be in such a facility, in addition to
+looking at testing some of the finished products, but to--
+ Chairwoman Dahlkemper. And that was after the fact?
+ Mr. Solomon. That was after the fact.
+ Chairwoman Dahlkemper. Okay. So prior to that, I am just
+trying to get down to the basics on any food production
+company. It is all really up to them in terms of what they do
+in terms of physical testing. And FDA comes in and does mostly
+visual testing, looks at records?
+ Mr. Solomon. We have changed our procedures into doing more
+and more environmental testing when we learn the unique
+conditions, such as a plant. So we are now going through all
+other plants similar to PCA and having an inspectional approach
+to do fairly extensive environmental testing, finished product
+testing, in addition to records and the observations.
+ Chairwoman Dahlkemper. Okay. Thank you.
+ Dr. Petersen, last year we had the contaminated beef
+recall, which also had a crippling effect, I think, on many
+small firms. In this particular case, it was the humane
+society, not FSIS, that alerted the public to the violations,
+which led to the recall.
+ How did FSIS miss these violations? And what specific steps
+have you taken to ensure that this does not happen again?
+ Mr. Petersen. Okay. Thank you.
+ Well, the situation that you mentioned is at the Hallmark
+facility in Chino, California, where we saw a video of just
+outrageous treatment of cattle at a slaughter plant. It was
+quite troubling, certainly for me, that that occurred at a
+federally inspected slaughter plant, certainly was troubling to
+Congress, and obviously the public.
+ And you asked the right question, how did this happen? I
+thought you were there every single day. We have done some
+investigation. The Office of Inspector General actually did a
+follow-up investigation. And they had a couple of observations.
+ One was that there were deliberate actions by that firm to
+bypass inspection. And that is still the subject of some
+investigation. They also found that there was some
+noncompliance by my inspectors with them executing their
+required inspection procedures.
+ We thought at the time and we had no reason to believe at
+the time that that was anything other than an isolated event.
+And the OIG report from this past November did say and
+basically quoting, that the events at the Hallmark facility
+were not evidence of a systematic failure of the inspection
+procedures. It was a constellation of very, very bad events
+that occurred in that particular facility.
+ We have implemented several things, actually, quite a few
+things, some of which from OIG and some of which we initiated
+in advance of their report.
+ We looked at, how did my supervisory structure allow some
+of my inspection behaviors to occur? They should have been
+tracking these employees on a more close basis, particularly my
+veterinarian in that particular plant. That veterinarian
+supervisor should have had a better understanding of what they
+were doing.
+ So we introduced a new layer of--not a new layer but a new
+level of structure, organization, to how they assess the
+performance of those veterinarians and inspectors on an ongoing
+basis, structure where it is documented and other people in the
+supervisory chain, including myself, can follow up and see what
+is happening. That is all populated in a management control
+system.
+ Then we looked at training, training of the workforce. Had
+we really trained the workforce to identify some of the low-
+level behaviors at the Chino plant, I think if they had
+identified some of those behaviors by the plant early on, then
+they would not have gotten to this egregious activity, you
+know.
+ And if we introduce the regulatory sanctions earlier, then
+obviously the point of that is to deter behavior. And so we
+have reinforced our training, pushed that out, as well as
+reinforced the accountability for enforcing inhumane activity
+at slaughter plants. And last year we did quite rigorously
+enforce inhumane handling at a variety of slaughter plants
+across the country.
+ That plant I think is not typical of the industry. And we
+recognize that. But it is typical of a very, very significant
+problem.
+ The recall was massive, as you suggested. It is the largest
+recall we have ever had. It was really not a safety-related
+recall. It was that, as I mentioned, proper inspections were
+not done because the plant had found a way to bypass those
+inspections. So the food was recalled because of a regulatory
+violation. The product has to be inspected. And in that case,
+on certain days, it was not.
+ That recall went all the way down the food chain, including
+to a variety of school lunch programs. And many small
+businesses were affected. It is surprising how product coming
+out of one plant can touch many, many businesses. But it was
+important, we felt.
+ And obviously we looked at the scope of the recall and
+looked at, were there ways to mitigate it. We, at the end of
+the day, did feel that the scope of that recall, as massive as
+it was, was the right thing to do for the public, in spite of
+the consequences.
+ And so we did get a lot of that product back, but it did
+have a significant impact on a variety of retailers, small
+firms, school lunch programs. And my goal is, with these new
+measures we put in place, that we will not see anything nearly
+as sweeping as that in the future.
+ Chairwoman Dahlkemper. Any idea what the cost of that
+recall was?
+ Mr. Petersen. Well, the cause--
+ Chairwoman Dahlkemper. No. Cost.
+ Mr. Petersen. Oh, the cost. No. But it is 143 million
+pounds. That dwarfs any other recall we have ever done. Well
+over 10,000 businesses and stores were affected. I don't have a
+cost on it, no.
+ Chairwoman Dahlkemper. I don't think any of us ever will,
+but I think the issue we are trying to look at here today is
+how can we prevent these massive recalls from happening. I
+think we are always going to have some incidence of a recall,
+but how can we prevent these massive recalls.
+ So what you have in place right now you think will help to
+prevent this kind of a massive recall?
+ Mr. Petersen. Well, we are not going to stand still. We
+think what we put in place mitigates and goes a little bit
+beyond what occurred. And obviously we are transposing that to
+all of the other facilities that we regulate and then following
+up in a more timely manner with folks to make sure that they
+are doing what you and others expect them to be doing.
+ Chairwoman Dahlkemper. Okay. Thank you.
+ I wanted to ask you both a little bit about private
+inspections versus government inspections because there has
+been kind of a movement towards industry hiring their own
+inspectors. And, as we look at that, maybe if you could address
+that and what you see as the role of a private inspector versus
+a government inspector.
+ Mr. Solomon. During my testimony, I talked about trying to
+understand the supply chain. That is really critical. And as
+the globalization of our food is changed, it is important for
+firms to be able to try and understand that supply chain. I
+think a response is many of them do hire various private
+auditors to go help them inspect that.
+ I don't see that as a substitute for government oversight
+and regulation. I think that needs to happen, too. But I think
+some companies put in additional requirements. And some of
+these auditors are looking at those.
+ FDA is conducting a pilot right now of looking at third
+party inspections and the value of that. We are actually
+looking at it more for imported products. But it needs to be
+very closely structured. There need to be very clear standards
+established for any third parties that we need to be controls
+for conflict of interest. There needs to be auditing of it.
+ So we are very carefully running a pilot right now to
+evaluate the value of third parties, particularly in the import
+environment.
+ Chairwoman Dahlkemper. Dr. Petersen?
+ Mr. Petersen. For the laws that USDA implements, here
+basically the Federal Meat Inspection Act, Poultry Products
+Inspection Act, and the Egg Products Inspection Act, inspection
+shall be done by government employees. And so our role, in
+fact, our legal obligation, which is a little different than
+FDA's, is to find the product acceptable before it leaves the
+plant. And so that is a big resource issue.
+ Now, private businesses have a variety of third party
+auditors, as Dr. Solomon mentioned, that can assess quality
+factors, food safety factors. And sometimes, of course, a lot
+of the times, they assess customer specifications.
+ If those third party audits involve food safety decisions,
+then we can have access to those records. And we do that. We do
+assess some of their findings and, if necessary, marry them up
+with our findings.
+ But for us the Federal role to find a product safe in the
+meat, poultry, and egg product sector, that is our primary
+role. And I don't see a role without some legislative change,
+which we are not pursuing for other inspection people.
+ Now, certainly we partner with our State partners, local
+partners, who are authorized to do some of these inspections,
+but a private entity we don't see that on the board.
+ Chairwoman Dahlkemper. Thank you.
+ Dr. Solomon and Dr. Petersen, the Regulatory Flexibility
+Act requires Federal agencies to consider the impact of
+regulations on small firms. In crafting effective policies, it
+is critical that we do not forget the needs of entrepreneurs.
+ How do your agencies collaborate with small businesses? And
+can you give me an example of a specific rule that was
+influenced by the input of entrepreneurs?
+ Mr. Solomon. As you note, on every regulation, there needs
+to be a regulatory assessment that takes place, economic
+analysis of what that is. I can't give you off--many of these
+regulations have had various input from--when we go through the
+notice and comment rulemaking process, we accept a lot of input
+from small businesses as well as large businesses. And that
+influences how those final rules come out.
+ And there are a number of rules--we can come back to you
+with specifics--where there have been various exceptions,
+either an implementation of the regulations or some exceptions
+for small businesses on some of those regulations.
+ Mr. Petersen. Of course, our key interest is food safety,
+and so if there are food safety lapses in a very small plant,
+those lapses can obviously make a consumer as sick as any lapse
+in a large plant. So our starting point is food safety, making
+sure that they meet the regulatory obligations.
+ But we recognize the impact of regulations can certainly
+disproportionately impact small and very small firms. And, as I
+indicated in my testimony, we have a rather aggressive outreach
+to really communicate with our small and very small plants that
+we regulate, find ways to get them the information that they
+need but get it in a way that is useful to them. But at the end
+of the day, they do have to meet their food safety obligations.
+ We have and, as Dr. Solomon mentioned, any regulation that
+is proposed and finalized under the Administrative Procedures
+Act would require us to consider the economic impacts of that
+rule.
+ The best example I think I could give was about 10 years
+ago we implemented one of our most significant regulatory
+changes, what is called HACCP, Hazard Analysis Critical Control
+Points, a preventive approach to food safety. That had a 3-year
+implementation plan, where the largest plants started first;
+then small plants, which we consider 10 to 500 employees; and
+the very small plants, which are less than 10 employees, plant
+employees, implemented last. And so there was a kind of
+sequential way so they could get the information, make any
+adjustments they needed, but then at the end of the day, they
+did have to implement their responsibilities.
+ Chairwoman Dahlkemper. Thank you.
+ I will now yield to Mr. Westmoreland, but before that, I
+would like to recognize that we have been joined by
+Representative Buchanan and Representative Thompson. Thank you.
+ Mr. Westmoreland. Thank you, Madam Chair.
+ I would like to ask Dr. Petersen, have you ever had an
+inspector in the PCA plant in Blakely?
+ Mr. Petersen. The Department has, but it is important, I
+think, to kind of distinguish inspectors, which, of course, is
+what we think of in the Food Safety and Inspection Service,
+with contracting procurement verification. So I wouldn't say
+there was so much an inspector from the Department, but there
+was somebody in the plant yearly.
+ The last time was in September of 2007, really verifying
+their contractual specifications, a more systems assessment,
+rather than being on the floor and looking for whatever was
+going on in that plant.
+ Mr. Westmoreland. Was everything in order while your
+inspector or compliance officer or whatever you want to call
+them at the plant, was everything in order then?
+ Mr. Petersen. In the September '07 visit, yes. There were
+no aberrant findings that we are aware of. Earlier in the 2001,
+I think, 2002, there were some minor findings. And they were
+shared with the appropriate regulatory bodies.
+ But in the recent past, there was nothing. This is folks
+involved with what is called our Farm Services Agency, who is
+the procurement body, did not find anything as of September
+2007, which is the last time they were in there.
+ Mr. Westmoreland. So they don't really get there once a
+year if that was the last time they were there, of course. So
+it's not a yearly visit. How often is it?
+ Mr. Petersen. Well, their obligations for their frequencies
+I am not personally aware of. We can certainly get you that. I
+do know that going back to 2001, they were in the plant about
+10 times and a handful of times, certainly less than half of
+those times, did they find minor sanctions, such as some
+insects that had to be controlled and that kind of thing.
+ Mr. Westmoreland. We are trying to get a little comfort
+here from the Food Safety and Inspection Service about the
+reliability. I mean, listening to your testimony, we are
+supposed to think that you are providing us some type of
+protection.
+ If you are telling me that they were there in '07, nothing
+was wrong, and now we have had this major recall and you
+weren't there in over a year, how comfortable are we to fill
+this number of employees that you have and evidently this small
+plant program that you were touting, I guess? I mean, is this
+something that we are working on?
+ I mean, this plant and the plants of PCA, all 3 plants,
+provide less than 2 and a half percent of the peanut butter or
+products that are used in this country. So to me, it is a
+relatively small thing. So how much protection are we getting
+there?
+ Mr. Petersen. I will say for the commodities that we are
+directly responsible for regulating through our statutory
+authorities, meat, poultry, and egg products, you should have
+and you should expect a very high level of comfort with the
+mission that we are executing with the resources that we have
+in those facilities.
+ We do not have jurisdiction. We have no legislative
+authority--that is an FDA responsibility, and I know they
+embrace it--for other commodities, such as in this case
+peanuts.
+ Now, we are looking at--I mentioned the procurement people.
+Some government person is going in there. Should they have
+other training or whatnot to--
+ Mr. Westmoreland. Who would that have been from the
+government that should have been in that plant?
+ Mr. Petersen. Well, for us, for USDA, as I indicated, it
+would be our contracting official who was looking at the
+contract obligations. And through the investigation, of course,
+they found some of the attestations by that firm were not what
+they were claimed to be.
+ Mr. Westmoreland. When was the last time a USDA inspector
+was in there or somebody stationed there?
+ Mr. Petersen. Nobody was stationed there. Again, the last
+time a contracting person would have been there--but they are
+obligated to make sure they are following their contract. The
+last time a USDA person was in there looking at their contract
+was in September of 2007.
+ Mr. Westmoreland. So do they look at what is going on there
+through mail that they receive in their office, wherever that
+might be?
+ Mr. Petersen. The details of how they verify the contract I
+don't know, but we will certainly get you--
+ Mr. Westmoreland. I will certainly look into it because it
+sounds like somebody may have missed something. The other thing
+I wanted to ask you about, the recall and how it goes about,
+well, I will ask Dr. Solomon this because you were talking
+about the recall and I guess you have a Web page and you put
+something out on the recall.
+ Rite Aid just had a recall, I think, last week of some of
+these peanut products. Rite Aid is a pharmacy that I do
+business with in Hogansville, Georgia. Why would they have
+waited so long to do a recall?
+ And I think that either you or Dr. Petersen mentioned that
+you know who has bought these products and who is using it and
+who is using it in their food processing, I guess. Why would it
+take so long to do the recall? Because as these recalls are
+stretched out, it makes it more severe to small business, I
+mean, if it was a one-time operation.
+ Second point is from the FDA, I think you all had issued a
+statement that it was very unlikely or not likely at all that
+this was in I guess Jif or Peter Pan or the jarred peanut
+butter. Now, is that true or not true?
+ And you can answer in any other you want.
+ Mr. Solomon. Thank you for the questions. I will take the
+second one first. The name brand peanut butters, there has been
+no contamination. They didn't purchase any of the products from
+PCA. And so we have made that statement, put that out on the
+Web.
+ Mr. Westmoreland. Okay. Let me point this out. Madam Chair,
+I think this is important from a small business standpoint
+especially. You spend as much time and effort putting that out
+as you do the other stuff because I think that is important
+because some people just see that there is peanut butter
+contaminated and they quit buying peanut butter. I think if you
+would spend as much time and effort saying, ``Look, these
+products did not buy any of the stuff. These are okay,'' you
+know, especially with some of your major brands, that would be
+something that you might want to look at.
+ But go ahead. I am sorry to interrupt you.
+ Mr. Solomon. Well, we did do many, many media calls and
+post on our Web information. And we do agree our responsibility
+is to make sure that contaminated product is taken off, but we
+also know that peanut butter and other products we regulate are
+nutritious and valuable commodities. So we also do try and
+assure people in the safety of products where we know they are
+safe.
+ Related to--your first question again--I'm sorry--related
+to?
+ Mr. Westmoreland. Well, I guess when did you have an
+inspector out there? I mean, does the FDA have any type of
+inspection into some of this food safety that goes on in the
+plants?
+ Mr. Solomon. We do. FDA had an inspector in this plant back
+in 2001. And then we have had contract arrangements with the
+State of Georgia that does work on our behalf. And they had
+inspectors in that plant in 2006 and 2007 doing the work for
+FDA.
+ And then the State of Georgia also conducts inspections in
+this plant. And I believe they have had an inspector in this
+plant around 7 times in the last 2 years or so.
+ Mr. Westmoreland. So who you are contracting with is not
+necessarily an independent or a private contractor but could be
+a state or a local agency?
+ Mr. Solomon. That is correct. We have contracts with 43
+states. We provide training to those states. And they follow
+the same protocols and procedures that FDA uses. And the State
+of Georgia did conduct inspections for us in this PCA facility.
+ Mr. Westmoreland. And one last question, Madam Chair, to
+Dr. Solomon. These testing facilities because, if I understand
+it correctly, some of this paste was sent to different testing
+facilities and that some of it had come back with a Salmonella
+as positive. But the test kept going forward until somebody
+said, ``No. There's no Salmonella.''
+ Now, what type of oversight do you all have over these
+testing facilities? And what type of responsibility do you have
+or safeguard to make sure that those tests are correct? And
+what type of authority do you have to punish some of these
+people that may give some false tests or evidently in this case
+a bad test?
+ Mr. Solomon. FDA doesn't have authority over private
+laboratories. These laboratories had a contractual relationship
+with PCA. They sent them samples. We have no information that
+any of the tests done by the private laboratories had any
+problems with it. We have reviewed those tests and their
+testing assessment, testing protocols seem to be valid that we
+are using.
+ That information goes back to PCA. And, as I mentioned
+before, the issue there becomes we are requesting additional
+access to records so that when we did an inspection, we could
+actually have access to those records of test results they got
+back from these laboratories.
+ Mr. Westmoreland. Thank you.
+ Madam Chair, that is all I have.
+ Chairwoman Dahlkemper. The Chair now recognizes Mr.
+Buchanan for 5 minutes of questioning.
+ Mr. Buchanan. Thank you, Madam Chair.
+ I wanted to switch from peanut butter to tomatoes. I
+represent a part of Florida, Manatee County, which has 40
+percent of the tomatoes grown in that county. Dr. Solomon, let
+me ask you. Last year the FDA devastated our growers in my
+district by issuing an alert only to find out later that the
+problem was associated with peppers, not tomatoes.
+ What guidelines are in place to alert the public regarding
+legitimate safety concerns without needlessly hurting growers?
+ Mr. Solomon. Thank you for that question. The outbreak that
+you are talking about, we need to understand how the current
+safety system works. When people get sick, they generally go to
+a doctor. That information then, they may get cultured that
+they have a Salmonella. In this case I think it was Salmonella
+St. Paul was the outbreak.
+ Mr. Buchanan. Yes.
+ Mr. Solomon. That information goes to a state public health
+laboratory. That information then goes to the CDC and is put
+into a database called PulseNet. Then CDC when they see a
+cluster of these, that there seems to be something unique going
+on in the nation, works with the state and local public health
+agencies to try and get a food history, to try and determine
+what product may have caused this outbreak.
+ The assessment from CDC and the states from the initial
+part of this outbreak is that the implicated products were
+tomatoes. And so they alerted FDA to that concern that appears
+to be a rise in the Salmonella St. Paul, several different
+states, an outbreak. These are all matching. And the people all
+report a common source as tomatoes as one of the source.
+ Now, when you think about it, obviously going through that
+process of several weeks of testing, going to the doctor,
+having those tests analyzed, getting into a system, and then
+going back and having CDC or the state try and determine the
+product is a difficult recollection issue for folks. So they
+try and add additional case control studies to try and match up
+and get statistical evidence about what product was implicated.
+ The initial case control studies also showed that tomatoes
+appeared to be the most likely vehicle. At that point in time,
+the decision was made to issue alerts from areas that we knew
+that tomatoes were being harvested at that period in time.
+ Mr. Buchanan. Just in our case, it cost our growers
+millions of dollars and a lot of jobs in our local economy,
+which leads me to the next question, Dr. Petersen. Under what
+circumstance is it appropriate for the Federal government to
+reimburse growers for losses associated with false alerts?
+ Mr. Petersen. At least on the meat, poultry, and egg side,
+if we execute a recall, meaning the plant agrees to do a
+voluntary recall in lieu of me containing and seizing their
+product, on the meat and poultry side, there is no provision
+for reimbursing them for executing that recall.
+ Our focus is on at that point there is problematic product
+in the marketplace. It could be product that can make people
+sick. And we need to get it back.
+ This did come up in the Hallmark situation. And we looked
+at any provisions or other reimbursement provisions. And for
+the packers, for the processors, there are no provisions.
+ For farmers, at least on the livestock side, there could be
+provisions. And we looked at this several years ago in what was
+then the melamine issue.
+ Mr. Buchanan. I am looking for tomato growers.
+ Mr. Petersen. Yes. As far as reimbursing tomato growers, I
+would have to ask Dr. Solomon. That is under his purview.
+ Mr. Buchanan. Okay.
+ Mr. Solomon. FDA does not have any authorities in relation
+to reimbursement for products.
+ Mr. Buchanan. But it does appear if it's something that
+egregious there should be some consideration because in our
+case, I know personally. I have been through these packing
+facilities and talked to these farmers. And they're talking
+millions of dollars because of these early alerts basically
+lost most of their crop an opportunity for that reason, which,
+you know, many of them live from week to week or month to
+month. So it was a huge economic impact in our area.
+ And I think there should be some consideration. I don't
+know if this crosses a line. I think it does but in a case
+where the federal government makes a mistake or potentially a
+mistake.
+ Mr. Solomon. We have understood that. And Congress has held
+previous hearings on that subject before.
+ Mr. Buchanan. Thank you, gentlemen.
+ Chairwoman Dahlkemper. The Chair now recognizes Mr.
+Thompson for 5 minutes.
+ Mr. Thompson. Thank you, Madam Chairwoman.
+ This maybe was answered at some point, but in terms of the
+trend line, just from food recall incidents, are we on a level
+play, decreased, increased level of incidence?
+ Mr. Solomon. For FDA, it has been probably relatively level
+for what we call a class I recall. We have been running around
+350 class I recalls for the past several years. Obviously this
+recall when we look at '09 statistics will have a tremendous
+increase.
+ Mr. Petersen. On the meat and poultry side, they have
+really leveled off the last couple of years. Our high-water
+mark, which is really a low-water mark, was back in 2002. We
+were at about 120 recalls. There were some major E. coli-
+related recalls, Listeria-related recalls that year.
+ Through working with plants, having them understand what
+happens when we take a test, that they have the opportunity to
+hold the product when we do that so there is not a recall, the
+numbers now have been flat for the last couple of years, in the
+mid 50s, 55 or so, every year.
+ Mr. Thompson. Okay. Dr. Petersen, you mentioned with the
+meat and meat-processing facilities, the FSIS, have they taken
+steps to update the requirements for the meat-processing
+facilities, specific hazards analysis, critical control point
+plans?
+ Mr. Petersen. They raise, well, several things. As I
+mentioned in the opening, the plans are required for meeting
+their regulatory obligations. But for the small and very small
+plants, we think we are a good vehicle for them to provide them
+some information, provide them avenues for information. And so
+we have a lot of outreach activity where we go to them, provide
+them materials that we think can help them update their plans.
+ Sometimes when there are true changes in the system, such
+as a spike in E. coli that has happened in the last, really,
+beginning of 2007, the plants are obligated to reassess what
+they are doing. Do they still have the right controls? Are they
+working? And are they tracking them correctly?
+ And they do that, but we work with particularly the small
+and very small plants because of their resource limitations,
+give them the information to be successful, but at the end of
+the day, it is their obligation to be successful.
+ Mr. Thompson. Thank you.
+ Madam Chair, I yield back my time.
+ Chairwoman Dahlkemper. I just have one other question for
+you before we finish up this panel. And that is regarding
+looking at all of our federal agencies which administer at
+least 30 different laws related to food safety, 15 agencies.
+ Often people refer to this as a very fragmented,
+inconsistent, ineffective, and inefficient way to look at food
+safety. And I truly believe that this is one role of
+government: to ensure the safety of the citizens.
+ So would it ultimately be more effective--and you can both
+answer this--to create a single food safety agency?
+ Mr. Solomon. Obviously the new administration has not had
+an opportunity to weigh into that discussion. I will say we
+work very closely with the other agencies. Dr. Petersen and I
+have worked together for many, many years. We have MOUs with
+each other. We have notified each other, for example, in this
+particular incident, about recalls, about peanut products that
+may have affected USDA-regulated products.
+ We exchange information. When we go into a facility that
+may have a USDA-regulated product that we have sampled, we
+notify them. Similarly, they do the same. We conduct some joint
+operations. We work closely on food defense issues.
+ So I know the administration has got this under
+consideration.
+ Mr. Petersen. I will echo the information sharing, the
+collaboration. Now much of that is on a personal level. I know
+Steve and I have talked over holidays and when there is
+something that needs to be resolved. And so those discussions
+do occur.
+ There is a variety of, as you are no doubt aware, some
+legislative proposals. We are certainly interested in those.
+Our new Secretary Vilsack has expressed an interest in looking
+at that very issue. And so we are going to certainly give him
+the information he needs.
+ But as far as a recommendation, a position, frankly, for
+us, it would be a little preliminary. But I understand the
+concern, where the way it is implemented, does it make sense to
+have all of these different players, particularly to the extent
+that there are any overlapping authorities in today's climate?
+That may not make the most sense.
+ Chairwoman Dahlkemper. You two have known each other for a
+long time. You talk back and forth. But what about when one of
+you leaves?
+ Mr. Petersen. Yes.
+ Chairwoman Dahlkemper. You know, just a thought there.
+ Mr. Westmoreland. I have just got one last question for
+both of you. I am assuming both agencies have looked this meat
+recall, the tomato recall, the peanut recall. Have you all
+changed any of your policies? And has anybody with either one
+of your agencies been disciplined or reprimanded over not
+following some existing policies that you had that could have
+led to some of this being a little loose, so to speak?
+ Mr. Solomon. We look at every foodborne outbreak. And we
+try and learn lessons from it. And we do learn lessons. And we
+consistently improve the process. So I think we have learned
+lessons from the tomato outbreaks, spinach outbreaks, peanut
+butter outbreaks. And we incorporate those new pieces.
+ So when I was speaking earlier about basically the new
+science, about understanding how Salmonella can live in a
+facility in a dry plant. It is some of that new science that
+needs to be integrated. And we do integrate that into new
+inspectional approaches, so the environmental pieces.
+ There has been no disciplinary action related to any of the
+FDA outbreaks.
+ Mr. Petersen. Well, I mean, you haven't said it here, but
+every recall for us is a failure. We have put product in the
+marketplace that we have said was okay, and we have to bring it
+back. And many recalls look alike, but there are many things we
+do learn from every single one.
+ And we do our best to communicate those flaws, whether it
+be a plant flaw or some other activity, so other people know so
+they don't repeat the same mistake. And that is for recalls.
+That is for outbreaks.
+ So we try to communicate ``Here is what didn't work,''
+``Here is how they got into trouble.'' Obviously we have to
+kind of protect their proprietary interests, but there are some
+lessons learned that we do get out.
+ Some of the outbreaks that we have had as far as
+interagency from our perspective, we have learned from those
+certain regulatory approaches, legal authorities that we can
+work together on. So we have taken those lessons.
+ As far as employee actions, I guess I can tell you in
+certain outbreaks, the appropriate personnel actions have been
+taken.
+ Mr. Westmoreland. Thank you.
+ Chairwoman Dahlkemper. I want to thank both Dr. Solomon and
+Dr. Petersen for being with us here today. You are now excused,
+and I would like to call up the second panel. Thank you very
+much for joining us, gentlemen.
+ Good morning. I want to thank the second panel here for
+joining us today. Witnesses again will have 5 minutes to
+deliver their prepared statements. The timer begins when the
+green light is illuminated. When one minute of time remains,
+the light will turn yellow. And the red light will come on when
+the time is up.
+ Our first witness today is Ms. Diane Austin. Ms. Austin is
+Vice President of Perry's Ice Cream in Akron, New York. Perry's
+Ice Cream is a family-owned business that was founded in 1918.
+ Ms. Austin is testifying on behalf of the International
+Dairy Foods Association. The association's members represent
+more than 85 percent of the milk cultured products, cheese, and
+frozen desserts produced and marketed in the United States.
+ Thank you, Ms. Austin.
+
+ STATEMENT OF DIANE AUSTIN
+
+ Ms. Austin. My name is Diane Austin. I am the Vice
+President of Perry's Ice Cream Company in Akron, New York. I
+would like to thank you for the opportunity to discuss the
+impact of food recalls on small food manufacturers.
+ Chairwoman Dahlkemper. Thank you.
+ Ms. Austin. I have 3 points to make today. First, remember,
+American dairy products are among the safest in the world.
+Second, product recalls of ingredients have had devastating
+impacts on small food manufacturers. And, third, Congress
+should consider financial assistance for small businesses that
+have been impacted by these recalls.
+ Perry's Ice Cream is a small family-run business that has
+been making great tasting ice cream for 4 generations. We
+manufacture 550 different ice cream products at our facility in
+Akron. And we employ nearly 300 team members. We make ice cream
+for grocery stores, convenience stores, mom and pop ice cream
+stands, schools, nursing homes, and many food service venues.
+ We recently received the 2008 INNOVATE award in the
+agribusiness category by the Buffalo Niagara Partnership for
+growth, innovation, and investment in our regional economy. Our
+90-year commitment to product quality and consumer safety is a
+key reason for our success.
+ I am here today with the International Dairy Foods
+Association, which represents our nation's dairy manufacturing
+companies and their suppliers. More than half of IDFA member
+companies are small businesses.
+ To begin, I would like to remind the Committee that the
+American dairy products are among the safest in the world.
+Dairy manufacturing plants must meet stringent federal, state,
+and local regulations, including those developed by the U.S.
+Food and Drug Administration as well as state regulatory
+agencies.
+ As is typical in our industry, Perry's has a plant-wide
+HACCP, or Hazard Analysis and Critical Control Point, plan,
+which includes good manufacturing practices, preventative
+maintenance programs, and other food safety and quality
+programs. Our good manufacturing practices are based on FDA's
+requirements for food processing plants. In 2008, Perry's
+delivered over 1,700 hours of training to our team members in
+the area of food safety and quality alone.
+ Previous to the peanut recall, Perry's had only 2 limited
+product recalls in the past 10 years. Simply put, it is never
+in our best interest to cut corners or risk delivering unsafe
+products to our customers.
+ Until January, Perry's had used PCA ingredients in some of
+our product lines. Because these ingredients are added after
+pasteurization, we require documentation that they meet our
+safety standard. And, in spite of our best efforts, we were
+significantly impacted by the events at PCA.
+ Perry's issued 3 separate recall notices, impacting 44
+different products. We traced distribution to 6,534 individual
+locations. We have conducted audits at more than 900 locations
+to ensure that the product had, in fact, been removed for sale.
+To the best of our knowledge, no consumer illnesses were
+related to any of our ice cream.
+ We destroyed more than 170 tons of product, spent more than
+2,100 employee hours, placed recall notices on our Web site,
+and responded to nearly 1,000 consumer and customer contacts.
+These efforts continue as we communicate with our customers and
+consumers and begin the resupply process.
+ In addition to these mounting expenses, we are financially
+responsible to make sure that our customers are whole. Perry's
+is now crediting our customers for recalled product that they
+purchased, paying our suppliers for ingredients that were used
+in the recalled products, incurring costs for dumping product,
+legal fees, and other recall-related expenses, all this while
+we begin to try to reestablish a pipeline of product that has
+been dry for nearly 8 weeks.
+ At the same time, we are trying to build inventories for
+the peak summer demand season, which is absolutely a make or
+break season for our industry.
+ While we do not yet have a complete accounting of the
+losses, they are likely to be in the hundreds of thousands of
+dollars, if not more. And we are just one of nearly 300
+companies that purchased product from PCA.
+ In spite of the significant investments that we have made
+over the years, to meet or exceed industry best practices in
+the areas of quality and food safety, we have incurred a
+considerable financial loss through no fault of our own.
+ There was little hope that we will recover any of these
+costs from PCA. And with over 3,000 products now on the FDA
+recall list, there can be no doubt that other small businesses
+encounter the same problem.
+ Small businesses are dependent on cash flow for operations.
+And those affected by the PCA recall must make difficult and
+immediate choices about which bills will be paid, whether
+people can be hired, and which products can now be produced. We
+fear that before this is all over, many small business
+manufacturers or small food manufacturers will go under.
+ This Committee and Congress should consider providing
+financial assistance, preferably in the form of grants or loan
+guarantees, to help small businesses that have suffered
+significant financial losses as a result of a recall prompted
+through no fault of their own. As a small business, we would
+ask Congress to carefully balance business responsibility and
+government regulation to ensure a safe food supply but to be
+careful before assuming that more regulation is always the
+answer.
+ On behalf of Perry's Ice Cream and the 530 members of the
+IDFA, I would like to thank you for the opportunity for us to
+voice our views this morning. Thank you.[The prepared statement
+of Diane Austin is included in the appendix at page 63.]
+ Chairwoman Dahlkemper. Thank you.
+ Our next witness is Mr. Mike Ambrosio. Mr. Ambrosio is Vice
+President of Quality Assurance at the Wakefern Food Corporation
+in Elizabeth, New Jersey. The Wakefern Corporation is a
+retailer-owned cooperative comprised of entrepreneurs that own
+and operate supermarkets.
+ Mr. Ambrosio is testifying on behalf of the Food Marketing
+Institute, which develops and promotes policies supporting food
+retailers and wholesalers.
+ Welcome.
+ Mr. Ambrosio. Thank you.
+
+ STATEMENT OF MIKE AMBROSIO
+
+ Mr. Ambrosio. Thank you. Chairwoman Dahlkemper, Ranking
+Member Westmoreland, and members of the Regulation and Health
+Subcommittee, I am Mike Ambrosio, Vice President of Quality
+Assurance for Wakefern Food Corporation. And I have been in
+charge of food safety programs at Wakefern for 29 years.
+ I am honored to appear before you today to testify on
+behalf of my company and our members but also FMI, Food
+Marketing Institute, our trade association, representing over
+1,500 retail members.
+ Founded in 1946, Wakefern Food Corporation has grown from a
+small, struggling cooperative into a strong regional player.
+Headquartered in Keasbey, New Jersey, Wakefern is comprised of
+45 members, who independently own and operate supermarkets
+under the ShopRite banner in New Jersey, New York, Connecticut,
+Pennsylvania, Delaware.
+ While we are the largest retailer-owned cooperative in the
+nation, the majority of our members own 1 or 2 stores and
+understand the challenges that businesses face. Only owners
+that understand these needs of their customers and community
+are able to survive and prosper.
+ As a result of our members' dedication to their customers
+and communities, ShopRite has been named the New Jersey
+Corporate Philanthropist of the Year by the Community
+Foundation of New Jersey. And America's Second Harvest Food
+Bank Network has also recognized ShopRite as a Grocery
+Distributor of the Year for its ShopRite Partners in Caring
+Program, a year-round initiative dedicated to fighting hunger.
+ As part of our dedication to the consumer, our most
+important goal is to ensure that the food resale is safe. our
+store has many prevention programs in place to protect our
+customers, such as consumer education campaigns, employee food
+safety training, extensive sanitation programs, and food safety
+management systems. But all of these prevention programs at
+retail level cannot ensure that we deliver safe food to our
+customers if the food coming into our stores isn't already
+produced and processed to the highest standards.
+ When we do receive notification that a product is
+adulterated, we take a variety of vital steps to ensure that
+the effective product has been removed from our shelves as
+quickly as possible and also to notify our customers in certain
+instances. However, this process is often challenging, time-
+consuming, and expensive due to the loss of man-hours and the
+loss of sales created not only by not having the product taken
+off the shelves but also due to a recall impact on consumer
+confidence.
+ I would like to provide the Committee a snapshot of what
+steps we take when we are notified that a product has been
+recalled. The notification process, when we receive
+notification a product has been recalled through a variety of
+different means, we use third party services that we subscribe
+to, direct contact by the vendor through monitoring government
+Web sites, such as the FDA and USDA, or through a variety of
+media outlets.
+ With any notification method, it is vital that we receive
+the necessary information, such as product name, correct UPC
+codes, product size, and sell-by dates to ensure we know
+exactly what product is being recalled.
+ The average size grocery store has over 45,000 items on
+their shelves every day. In the case of the high-profile Peanut
+Corporation of America recalls, the FDA as of March 9th had
+over 3,200 listed products on their Web site.
+ The actions we take once we receive the necessary
+information in the Quality Assurance Department, we notify
+Consumer Affairs. While comparing the affected UPC codes to our
+current inventory, all identified products are embargoed and
+segregated to a designated holding area. In addition, recalled
+UPC codes are locked out of our point-of-sale system. So
+product cannot be scanned for sale at our registers or sold
+through the front end.
+ Our bulletin is sent to our store owners and applicable in-
+store divisions and management staff. The information is posted
+on our internal Web site, also an external Web site if you log
+onto the shoprite.com.
+ Class I recalls triggers automatically phone calls to
+notify our store owners, management staff directly to reinforce
+the bulletin. We also have a third party private visit to the
+stores to ensure that the class I product has been removed from
+the shelves.
+ At the same time we are removing products at store level,
+our Consumer Affairs Department is creating signage for display
+at point of sale and sending releases directly to the media.
+That's a vital piece of this because consumer education when it
+comes to recalled product is key.
+ Depending on the type of recall, they also search for data
+from our loyalty card program. That allows us to notify our
+customers directly through phone calls and about product they
+had purchased. It is important that grocers are able to employ
+a variety of different methods to notify consumers.
+ I am proud of the actions we take as a company to remove
+adulterated product. As a matter of fact, last fiscal year we
+had 214 recalls, 27 class I, 43 pharmacy recalls. That accounts
+for 238 UPC codes that were blocked out at the front end as
+well as the time dedicated to that. Over 2,140 hours are
+dedicated to that, 305 working days if you want to break that
+down. And these don't even include the numbers with PCA.
+ Our trade association, FMI, is working with Wakefern and
+other members of all sizes dedicated to continually improving
+food safety. And we also support the FDA and the USDA with
+regard to mandatory recall authority that they have.
+ We also believe that suppliers should be--[The prepared
+statement of Mike Ambrosio is included in the appendix at page
+71.]
+ Chairwoman Dahlkemper. Thank you, Mr. Ambrosio.
+ Mr. Ambrosio. Okay.
+ Chairwoman Dahlkemper. We will cover more this in the
+questions. Thank you.
+ Mr. Conrad is next. Mr. Conrad, Ken Conrad, is President of
+Libby Hill Seafood Restaurants in Greensboro, North Carolina.
+Libby Hill Seafood was founded in 1943 by Mr. Conrad's father.
+It operates restaurants in North Carolina and Virginia.
+ He is testifying on behalf of the National Restaurant
+Association, which represents more than 380,000 restaurant
+establishments.
+ Welcome, Mr. Conrad.
+
+ STATEMENT OF KEN CONRAD
+
+ Mr. Conrad. Chairwoman Dahlkemper, Ranking Member
+Westmoreland, and members of the Subcommittee on Regulations
+and Healthcare, on behalf of the National Restaurant
+Association, thank you for the opportunity to testify before
+you today regarding the impact of food product recalls on
+restaurants.
+ My name is Ken Conrad. I am the Chairman of the Board of
+Libby Hill Restaurants. For the past 5 years, I have had the
+privilege of serving as the North Carolina delegate to the
+National Restaurant Association. I also serve as Chair of the
+North Carolina Restaurant and Lodging Association. And by
+operating a chain of seafood restaurants, it has kept me very
+active in the seafood industry. I currently serve as Vice Chair
+of the National Fisheries Institute.
+ My family continues to own and operate Libby Hill
+Restaurants, and I am proud to say that my son today is the
+third generation to run the business. Three weeks from today,
+we will begin our 57th year of serving seafood in a family-
+friendly atmosphere. We currently operate 12 units scattered
+across western North Carolina and southwest Virginia.
+ The restaurant industry is comprised of 945,000 food
+service locations, 13 million employees nationwide. We serve
+130 million guests every day, and every $1 million of revenue
+in our industry creates 33 new jobs for the economy. Seven out
+of 10 restaurants are single-unit operators, with 91 percent of
+eating-and-drinking places having 50 or fewer employees. We are
+truly an industry of small businesses.
+ Food safety is of the utmost importance for restaurants.
+Restaurants have taken the lead in ensuring food safety within
+our 4 walls with the National Restaurant Association and its
+members making a multi billion-dollar investment to
+continuously improve food safety programs and develop state-of-
+the-art food safety education.
+ We are proud of ServSafe, the food safety education program
+that sets the standard for the industry. Foodborne illness
+outbreaks and the recalls that follow have greatly impacted our
+industry. Lapses in management in the food supply chain can
+create negative consequences to consumer confidence, as recent
+outbreaks and recalls have shown.
+ Most recalls are due to mislabeling mistakes, but very
+large outbreaks and recalls due to adulteration or
+contamination indicate more could be done in both the supply
+chain and with improvements in the federal and state regulatory
+approach.
+ Since 2006, the United States has dealt with the impact of
+foodborne illness outbreaks and recalls resulting in the
+contamination of tomatoes, serrano peppers, chicken and turkey
+pot pies, ground beef, chili sauce, lettuce, spinach, and
+peanut butter.
+ Currently, the industry continues to cope with peanut
+butter recalls resulting from a Salmonellosis outbreak
+involving thousands. It is likely this outbreak will become one
+of the most infamous outbreaks of foodborne disease.
+ When a foodborne illness outbreak occurs, the first
+priority is to identify the affected product and immediately
+remove it from the food supply. Restaurants often use an
+abundance of caution when learning of an outbreak and may just
+simply choose to remove that item from the menu until the dust
+clears and it has gone away.
+ Trace-back investigations to determine the source of
+outbreaks can require extensive resources and may result in
+irreparable damage to a food service establishment. Therefore,
+it is critical that each piece of the investigation be
+thorough, complete, and accurate. We must remember that trace-
+back investigation recalls are reactive measures. We should not
+neglect the importance of preventing contamination to ensure
+safety to reduce or mitigate the need to recall product.
+ Adequate funding to food safety agencies at both the state
+and federal levels to ensure appropriate staffing and expertise
+is mandatory, improved collaboration and communication between
+government and industry during the investigation of a complex
+outbreak, communication and education strategies to effectively
+inform consumers in the event of an outbreak or recall. We need
+stronger standards and practices for fresh produce and
+additional tools such as recall authority, traceability, and
+improved epidemiological investigation.
+ In conclusion, the safety of the food supply must and will
+continue to be the top priority for the restaurant industry. We
+stand by and are ready to work with Congress, the
+administration, and our food chain partners to improve food
+safety and the needed reforms. Thank you for the opportunity to
+testify. And I will be happy to answer questions at the
+appropriate time.[The prepared statement of Ken Conrad is
+included in the appendix at page 78.]
+ Chairwoman Dahlkemper. Thank you.
+ Mr. Westmoreland will introduce our next witness.
+ Mr. Westmoreland. Thank you, Madam Chairwoman.
+ It is my pleasure to introduce a friend of mine and fellow
+Georgian, Mr. Don Koehler. Mr. Koehler is the Executive
+Director of the Georgia Peanut Commission.
+ Mr. Koehler and his family reside in Tifton, Georgia, where
+he has lived for 25 years. He is a native of Alberta, Alabama
+and received a B. S. in agricultural science from Auburn
+University in 1979.
+ In 1986, he became the Executive Director of the Georgia
+Peanut Commission. In that position, he has served in numerous
+positions of leadership within the peanut industry. He oversees
+the Commission's programs in the areas of research, education,
+and promotion, including advocacy for the farmers in Atlanta,
+Washington, and on international issues.
+ He currently serves on the Agricultural Technical Advisory
+Committee on trade for cotton, tobacco, peanuts, and planting
+seeds. He also serves on the management team of the Southern
+Peanut Farmers Federation, which represents peanut farmers in
+Alabama, Florida, Georgia, and Mississippi.
+ I want to thank Don for being here today to share his
+perspective on behalf of the Georgia Peanut Commission. And I
+know we all look forward to hearing your testimony, Don. Thank
+you.
+ Mr. Koehler. Thank you, Congressman.
+
+ STATEMENT OF DON KOEHLER
+
+ Mr. Koehler. Good morning, Chairwoman Dahlkemper, Ranking
+Member Westmoreland, and members of the Committee. I am Don
+Koehler, the Executive Director of the Georgia Peanut
+Commission. On February 1st of this year, I celebrated 22 and a
+half years in that position.
+ The current outbreak and recall attributed to the Peanut
+Corporation of America is the most devastating issue to ever
+face our industry in my time there. We currently have 4,535
+peanut farmers in Georgia. That number has the potential to
+decline in 2009.
+ An inscription over the entrance to Washington's Union
+Station reads, ``the farm, best home of family, source of our
+national wealth, the natural providence.'' That is true even
+today. Farmers provide more to the economic health of our
+economy than at any time in history.
+ On January 10th, the U.S. Food and drug Administration
+issued a voluntary recall notice on peanut butter processed at
+a plant owned by the Peanut Corporation of America. The initial
+recall was expanded to roasted peanuts and later to include all
+product ever produced at a PCA plant in Texas.
+ PCA was a supplier of peanut butter to the food service
+industry and a supplier of ingredients to food manufacturers.
+They had a broad reach for a small processor.
+ The recall has been ongoing for 2 months and has rippled
+throughout the peanut industry. We are dealing with a situation
+of historic proportions. The full impact will not fully be
+known for some time. Rebuilding cannot fully begin until the
+outbreak is over and the recall complete.
+ The 2008 peanut crop was a record crop, and we were faced
+with managing a surplus. USDA has been slow to react to the
+current market conditions in setting the weekly posted price,
+which has complicated this issue. Peanut sales are nonexistent
+for farmers who have uncontracted peanuts. Yet, USDA has not
+sufficiently reduced the posted price.
+ After the recall, sales of peanut products tumbled. General
+agreement is that peanut butter consumption is off as much as
+20 percent. Peanut butter processing accounts for about 70
+percent of the Southeastern peanut market.
+ Due to uncertainty, no contracts are being offered to
+farmers. This is critical because farmers need a contract to
+get financing and to make planting decisions. In 2 Georgia
+towns, groups of farmers built modern shelling facilities to
+add value to their peanuts. Each has fewer than 50 employees,
+and they will be impacted.
+ Peanut buying points are paid on the volume that they
+handle. And then there is the impact on our farmers. The market
+has collapsed. So the best case scenario seems to be $355 per
+ton, which is the loan rate.
+ Using projections for only variable costs, excluding land
+rent, farmers would need irrigated yields of 4,700 pounds per
+acre and non-irrigated yields of 3,500 pounds to achieve a zero
+cash flow. Typically, the yield in the Southeast would be less
+than 3,800 pounds irrigated and about 2,800 pounds for non-
+irrigated. There is little to no likelihood of farmers' cash
+flowing this year.
+ The National Center for Peanut Competitiveness took a 5-
+year Olympic average of U.S. peanut production and used USDA's
+posted price for peanuts and came up with an average price of
+$408-plus a ton. The difference of that price and the loan rate
+include factors showing a loss that ranges from about $114 to
+$121 million.
+ If you take into account a loss of production, these
+numbers grow. Growers anticipate a reduction of acres of at
+least a third. The NCPC indicates that that reduction could be
+40 to 60 percent based on their representative farm. This is a
+loss of $225 to $450 million just at the farm gate. If you use
+a conservative multiplier of 2, which is very conservative, we
+are looking at potential for a billion-dollar impact in the
+peanut industry in this country.
+ What can be done to help us? The formula that USDA uses to
+set the national posted price is a farce. Congress should ask
+USDA to review this formula and report back in a firm time and
+come up with something that is realistic.
+ Peanut butter has been a staple for U.S. and international
+feeding programs. It is good, and it is good for you. And we
+need USDA to look at this and to really come to the table now.
+We need them to buy peanuts and peanut butter now more than
+ever.
+ Peanut butter is 25 percent protein and about $2 a pound.
+So the only thing that even beats that is whole chickens and
+chicken legs with the or bone in.
+ Farmers have felt the impact of this recall, but the thing
+that I will tell you is that the growers in Southeastern United
+States, peanut farmers, are here to work with Congress to find
+ways to make sure that this can never happen again.[The
+prepared statement of Don Koehler is included in the appendix
+at page 83.]
+ Chairwoman Dahlkemper. Thank you, Mr. Koehler.
+ Our next witness is Ms. Sheryl Vanco, who is from my
+district. She is a dairy farmer from Bear Lake, Pennsylvania.
+In addition to being a Pennsylvania Farm Union member, Ms.
+Vanco is also active with the Farmers Union Milk Producers
+Association and serves on the Pennsylvania Animal Health
+Commission.
+ She is here to testify on behalf of the National Farmers
+Union. The National Farmers Union represents 250,000 farm and
+ranch families.
+ Welcome, Ms. Vanco.
+
+ STATEMENT OF SHERYL VANCO
+
+ Ms. Vanco. Thank you, Madam Chairman Dahlkemper, Ranking
+Member Westmoreland, and members of the Subcommittee. We thank
+you for the opportunity to testify today.
+ My name is Sheryl Vanco. My husband and I have and operate
+a 95-cow dairy in northwestern Pennsylvania. We hire 2 full-
+time workers. One of them is an Amish man. My husband and I
+both work full-time on the farm. It is a lifestyle that we
+chose and that we love.
+ As a member of the Animal Health Commission, I help to
+oversee all of the animal health rules and regulations in the
+State of Pennsylvania. And we have 3 animal health diagnostic
+labs that we oversee.
+ We are proud of our industry and the dairy industry. We
+produce a quality product, and we produce quality meat
+products. We work hard every day to ensure that they are
+wholesome when they meet the market.
+ Our farm facilities are inspected by state and federal
+inspections. And annually our milk is tested for Brucellosis.
+There is mandatory monthly testing for bacteria. Weekly our
+milk is tested for somatic cell counts, which indicate the
+health of the cow's udder.
+ Every drop of milk that we ship to market is tested for
+antibiotic residues. It is very costly if a farmer has a load
+of antibiotic milk. He loses not only the value of the milk of
+his on the truck, but he is responsible for paying the value of
+all of the other milk. Typically there is $10,000 worth of milk
+on the truck.
+ We routinely vaccinate our cows to prevent diseases and
+take very good care of them if they need prompt health with any
+of the medical emergencies that they encounter. Veterinarians
+are in very short supply for large animals in this country now.
+So most of the farmers and herdsmen do a lot of the veterinary
+work themselves. We have nutritionists who advise us on the
+diet for the cows to keep them healthy.
+ Cows have a very high value. And they are the heart of the
+dairy business. We work very hard to take very good care of our
+cows. We appreciate them both for their value and the emotional
+attachment that we have with them when we work with them every
+day.
+ When the cow's productive life is over, it joins the beef
+cattle in the market. The animal is visually inspected before
+and after slaughter. Unhealthy cattle, whether they are downers
+or not, do not enter the food chain. Our domestic meat and milk
+products are highly regulated for quality and safety on the
+farm level.
+ Dairy is one of the most highly inspected and regulated
+industries in the food industry. When there is a problem that
+leads to a dairy or beef recall, the contamination is usually
+found to have been after it has left the farm.
+ Not only does the product recall of hamburger affect the
+financial loss of the processing facility, but it leads back to
+a reduced consumption by consumer, which leads to lower prices
+for the farmers. This works the same way in milk products. As
+soon as people back off from purchasing them, it ultimately
+leads back to us receiving less money for our milk or our meat
+that we are selling.
+ My own milk coop processes their milk in a cheese plant in
+Ohio. We sell it to the Ohio plant. If there were to be a
+product recall for dairy in the country, we are faced with
+financial loss because of the loss of consumption. But if we
+had a recall of the product from the plant that we ship our
+milk to, it would be much more devastating to us.
+ If it was a large enough recall to require the shutdown of
+the plant or to lead to bankruptcy of the plant, then we would
+be looking for another market out of the milk marketing
+generally. And we at this time have way too much milk on that
+market. So we would have very, very little financial ability to
+sell that milk. It would lead to devastation to the farms that
+have this supply on the milk.
+ We are very highly regulated on the farms, but we think
+that imports pose a greater threat to the health value in the
+United States than the farm-produced milk in this country. Only
+a minimal amount of that milk is inspected. And we think that
+it should all meet the same health requirements that we meet.
+ The recent melamine scare should wake everyone up to the
+fact that we need to regulate these imports. That melamine came
+in in powder into this country, could have very easily been in
+food bags that produced the cheese that we ate. We are very,
+very lucky that it was just showing up in a couple of candy
+products. It could have been far more reaching in this country,
+and we could have been facing the health problems that the
+Chinese have faced.
+ It comes into this country under the guise of MPCs, which
+is multiple protein components. It was missed in the last trade
+rounds. So it is not regulated. It does not really have a
+standard of identify to inspect it. And it is both economically
+devastating to this country and poses a health risk to the
+products that we have worked very hard to produce for you.
+ The impact food recalls would have, especially negative
+impact, on family farmers' and ranchers' recent contamination
+events have demonstrated in animal and non-animal foods, the
+current U.S. laws and their enforcement are not sufficient. We
+need more inspectors for the imports. And we need to highly
+regulate and keep on top of these.
+ We think we have in the dairy industry enough regulations
+in process, but we need more enforcement.[The prepared
+statement of Sheryl Vanco is included in the appendix at page
+85.]
+ Chairwoman Dahlkemper. Thank you.
+ I just want to let you know that we may be called out for a
+vote. So we will try to get through some questions here
+quickly.
+ I would just like to ask the panel. And any of you or all
+of you could address this. Obviously each one of your
+industries is affected by recalls in different ways, but each
+one of your industries, which is consisting of small
+businesses, entrepreneurs, is affected, sometimes in a
+devastating way, with these recalls.
+ So as we look forward, we certainly don't want to impose
+undue regulations on struggling small businesses, whether that
+be the farmers, whether that be restaurants, whether that be
+the producers.
+ We have got 15 agencies already working on this issue. How
+can we who are looking at policy work in collaboration with
+small businesses in whichever industry we are talking about
+here in terms of the food supply to help you produce what you
+want to produce? And that is safe food for the people of this
+nation. I mean, that is kind of the crux of it here. How can we
+work better collaboratively with you through the agencies that
+we currently have?
+ I asked the question of the previous panel. Do we need to
+look at one agency. Do you have some thoughts on that from your
+perspective on the ground?
+ Ms. Austin. I will start that. I am sure some of my other
+panel members probably have some thoughts on that as well.
+ One of the things that we would like to see is a generally
+accepted overview of the Global Food Safety Initiative, GFSI.
+There are a lot of activities underway regarding third party
+certification for imports. And some of those same practices
+could be applied domestically so that as an auditing body or
+anyone who is looking at a facility has got commonly accepted
+practices that are applied routinely.
+ So that, for instance, in our facility, New York State Ag
+Markets is in. We are an organic-certified facility. We have an
+auditor for that. The military comes in and audits. We have New
+York State Ag Markets come in routinely for other things as
+well.
+ We have customers who require third party audits. Everyone
+has a certain kind of oversight that they would like to see. If
+there was one standard generally recognized, we could
+streamline a lot of those activities and the burdens that that
+places on a small business so that there could be consistent
+application of practices. It will make it easier for us to
+train our people and increase the opportunity for small
+businesses to improve their food safety without taking on
+additional responsibilities.
+ Chairwoman Dahlkemper. Mr. Ambrosio?
+ Mr. Ambrosio. There is a difference between what Diane is
+speaking about and inspections. Inspections is a snapshot at
+the time when you go into a facility. And you spoke about that
+earlier with the government panel.
+ I think what is important to capitalize and what you are
+saying is GFSI, the Global Food Safety Initiative, it's
+recognizing food management systems. It is a cultural change, I
+think. And that is what we need to look at in this country. We
+need to have a cultural change on how we go about doing
+business. We have gotten away from actually having management
+and everybody else buy into the fact that you have to produce
+food in a safe manner before it leaves the facility.
+ And if we are going to go about just having inspections,
+inspections, inspections, I could tell you that I have been
+doing this a long time. You can't inspect quality or food
+safety into any system. You have to have a culture. And when
+you embrace an SQF model or an IFSS or a VRC that are all
+members of GFSI, you have a foundation of a management system
+that is going to be working in a good way. And I think they
+alluded on it a little bit about third party inspections. I
+think that is important.
+ It is a good adjunct to what the government is doing right
+now. It can't replace government oversight. I think it is a
+good adjunct to what they have.
+ Chairwoman Dahlkemper. Does anyone else want to comment on
+this?
+ Mr. Koehler. Again I want to go back to the whole issue of
+culture within a business. And what we were dealing with in the
+peanut recall is very evident now when you look at 2 factories
+with the conditions that they had, it is very evident that it
+was a culture within that business.
+ Certainly the thing that needs to be there is a major
+amount of accountability for these people in the food business,
+for the food production business. They have got to be
+accountable for what they do. And though it has put this
+business out of business, there needs to be a lot of
+accountability that even losing the business might not be all
+that you have.
+ Our organization wants to be sure we work with Congress on
+everything that is going on. And so we have not talked about
+issues on mandatory recall, any of those kinds of things right
+now, though they are there, because we want to look at
+everything there and find the best result that comes out of the
+United States Congress for the food-processing industry.
+ We are not terribly negative toward mandatory recalls, but
+they come with a great deal of responsibility. I want to use a
+personal example to tell you how that is.
+ I have a farmer friend who grows peanuts, but the other
+thing he grows is tomatoes. In the just advisory that happened
+last year, he had beautiful table-stock tomatoes. I ended up
+going to his farm, and we bought 5-gallon buckets full of these
+tomatoes that we picked ourselves for $5 for a 5-gallon bucket
+and canned those tomatoes. These were table-stock tomatoes.
+ And then they find out that it was a problem not on
+tomatoes but on peppers. So anything we do has to make a good
+system better. And it has to be based, too, on the science that
+we can say, ``Hey, there is a reason that we did it.''
+ Mr. Conrad. There is currently a bill in Congress that I
+had worked with Senator Burr in North Carolina about and
+Senator Durbin and Gregg have cosponsored in regard to food
+safety. It does have some things that restaurants are certainly
+looking at. And certainly it seems to be a path that we may
+want to go down.
+ Two things have happened in the last several years that we
+would like strengthened: the requirements on produce safety and
+mandatory recall. We think that both of these probably need to
+happen.
+ Chairwoman Dahlkemper. Ms. Vanco, do you have any comment
+on this?
+ Ms. Vanco. The only comment that I have is when they did
+the Homeland Security, they moved some of the testing to
+Homeland Security from USDA. I think it would be a good idea to
+put it back with USDA, consolidate that back into one entity
+again.
+ Chairwoman Dahlkemper. Okay. I'm going to yield to Mr.
+Westmoreland at this point so he can get his question before we
+might be called away.
+ Mr. Westmoreland. Thank you, Madam Chairman.
+ Ms. Austin, you were talking about the products that you
+had made that you had to take off the shelves. Just curious, is
+there any type of testing that you do after these ingredients
+are added and then all put together? Do you do any type of
+testing on that? I mean, I am just curious.
+ Ms. Austin. We would require in this particular case a COA,
+or certificate of analysis, for the incoming ingredients before
+we would bring them into the facility. So that if there were a
+potential that there was something harmful included, we would
+not bring them into the facility, number one.
+ The testing after the fact is unlikely to find things. You
+really want to test it proactively. So we did have certificate
+of analysis on the incoming PCA ingredients that indicated that
+they tested negative for Salmonella. Otherwise we never would
+have used them.
+ Mr. Westmoreland. In this testing, I am assuming you all
+have turned over that information to whoever is investigating
+this, that certificate?
+ Ms. Austin. No, we have not. I don't think they have gotten
+into our facility to look at that. I think they looked at the
+documentation in Blakely. But we did.
+ Mr. Westmoreland. But you got a certificate.
+ Ms. Austin. Yes.
+ Mr. Westmoreland. Right?
+ Ms. Austin. Yes.
+ Mr. Westmoreland. That's interesting that they haven't
+contacted some of those, looking for some of those
+certificates.
+ Ms. Austin. I think it was alluded to as well. Testing,
+particularly in this case, if you have an intermittent problem,
+you are not going to necessarily find everything by testing.
+ Mr. Westmoreland. Right.
+ Ms. Austin. It goes back to practices.
+ Mr. Westmoreland. Yes.
+ Ms. Austin. It goes back to culture. And that's what we
+rely on. There has to be some degree of trust throughout the
+supply chain. And there is a certain amount of trust that you
+put in your vendors and suppliers. And those are the same kinds
+of trust that they need to have of us.
+ Mr. Westmoreland. How long had you been doing business with
+PCA?
+ Ms. Austin. Probably no more than two years.
+ Mr. Westmoreland. Mr. Koehler, let me ask you. The peanut
+industry is very supportive of food safety, right?
+ Mr. Koehler. Absolutely. You know, what we had was a bad
+actor that took a very short-term view. But, you know, we have
+got a product that we can go out, and we can tell folks that it
+is good and good for you.
+ And it is a long-term proposition for us. And the only way
+that we can have long-term health as an industry is to be sure
+that what we put out there, the mother that feeds that to a
+child or in my case the grandfather that feeds it to his
+grandsons knows that that product is safe and that it is good
+and that it is the best that it can be.
+ Mr. Westmoreland. And is it not true that whether you are a
+peanut farmer or a tomato farmer, that your job is to grow the
+crop and to make sure that you know it is the best product that
+it can be and then you take it to the processing plant and,
+from there, it is up to them and that you certainly have the
+interest of the consumer at heart and want to make sure that
+that is the best product that can come out of what you produce?
+Is that true?
+ Mr. Koehler. Even though the farmer sells to a buying point
+that sells to a peanut sheller that then sells to a company
+like PCA or a major processor, you know, we are four spaces
+removed. But if the consumer won't each that product, then it
+impacts us, too.
+ And it doesn't matter whether it is peanut farmers or
+whatever. Food safety is all of our issue in the agricultural
+system in this country.
+ Mr. Westmoreland. And you mentioned that this could be up
+to a billion dollars on the peanut industry. Is that just
+dealing with the growers or is that the total industry?
+ Mr. Koehler. What the multiplier number looks at is the
+total economic impact but on growers, almost $500 million right
+there.
+ Mr. Westmoreland. Ms. Vanco, I want to thank you for what
+you do. I have had an opportunity to both work on a dairy farm
+and to go out and visit them. You earn your money. And I want
+to thank you for doing that because that is a very worthwhile
+way of life, and I want to thank you and your family for doing
+that.
+ So, with that, I will yield back.
+ Chairwoman Dahlkemper. I would like to recognize Mr. King
+for 5 minutes.
+ Mr. King. Thank you, Madam Chair. I want to thank all of
+the witnesses for your testimony. Now I understand something
+about what is good about Mr. Westmoreland since he worked on a
+dairy farm.
+ A lot of your testimony had remarks in there about--I would
+synthesize it down to this, the best place in the world to
+raise a family is right there on the land. I just came from the
+Ag Committee, by the way, why I was late. But your testimony
+does empt me as I can reference that in our corn region.
+ I want to assure you, Mr. Koehler, if your peanut producers
+decide they want to raise corn down there--and I know they have
+got to make up their mind pretty quick--that I am not looking
+at this in any parochial way. You've got to get all you can out
+of the land. And one of the things we have tried to do is more
+dollars per acre. That solves, really, our agricultural
+problems throughout time.
+ I am curious about this. Before I ask my question, I want
+to comment also. Mr. Ambrosio's comment I think was the most
+significant in that you can't inspect safety into a system. You
+have to have a culture and reiterated by Mr. Koehler, if I
+remember correctly, and agreed I think by the rest of you.
+ I think that is a very significant point. I think that food
+inspection needs to be the inspection of the culture. And if
+the culture doesn't reflect the kind of food safety that is
+necessary, then that should bring more scrutiny in the food
+safety until such time as the culture is created or the place
+is shut down.
+ And I reflect back on having gone to a pharmaceutical
+manufacturing company and visited that. And they had great vats
+of white powder and people walking around in white frock coats.
+And they had a laboratory to evaluate quality control. And I
+asked, ``Where is my FDA inspector?''
+ ``Well, there is none here.''
+ ``When was the last time he was here?''
+ ``Well, I think he was here late last year, maybe 6 or 7
+months ago.''
+ ``You mean you don't have anybody on site like a USDA meat
+inspector watching all of the pharmaceuticals?''
+ The answer is no. Their quality control is in the quality
+of the pharmaceuticals that they produce in bulk that are
+packaged up in little capsules and sold to people and in the
+liability that trails that clear back to them. They create that
+culture because there are incentives in place for a good,
+solid, clean food culture. And I don't think that is what we
+have to do.
+ I wanted to pose this question this way. How many people
+have died in America because of lack of food safety in the last
+10 years, the last 50 years, any increment anybody would like
+to take a stab at?
+ Myself I have a hard time coming up with numbers that I
+think would impact in comparison to many of the other hazards
+we face in life. Does anybody want to take a stab at that?
+ [No response.]
+ Mr. King. I understand. Then I take you back to Alar, which
+seemed to be the precursor for the modern reaction to the lack
+of food safety. And it destroyed the apple market. Of course,
+it didn't affect my region again either, but it set the
+parameter that a scare of food safety chases the market away.
+It took a lot of apple producers out of business.
+ We had the BSE issue, which was mentioned. That hurt the
+beef industry dramatically. Now here we are with the impact on
+the peanut industry. Sitting there having to make a decision,
+if you don't get some answers, Mr. Koehler, can you tell us
+what you might do?
+ Mr. Koehler. Well, I represent farmers because that is my
+job, but I can tell you what farmers are telling me. They are
+struggling now to know what to do because our primary rotation
+is peanut and cotton with some corn. And we can't grow corn
+like you guys can there in the Midwest. We have to work pretty
+hard at it.
+ And it's pretty costly for us to do that. We have to
+irritate. The choices just aren't there. With 42-cent cotton,
+there is no cash flow there; with peanuts now below our cost
+production, nothing there to cash flow.
+ And I am not sure I know what farmers are going to do
+because sometimes they make a decision based on a motion,
+rather than on what their pocketbook is.
+ The National Center for Peanut Competitiveness has run
+every representative farm they have in this country. And they
+have found that farmers would lose more money if they would go
+fishing all year and not farm.
+ Mr. King. I am looking at the projected gross receipts that
+you need to make your land cash flow. And I come up with $621
+an acre for dry land, $834 an acre for irrigated land. What has
+happened to your land values, your asset values, that uphold
+your continuing operation?
+ Mr. Koehler. Farming-wise land values have kind of held
+where they are because of one thing. But it has changed a whole
+lot in the last few years. Our land values aren't continuing to
+escalate because we don't have the migration from Florida
+coming back up to buy 100 acres and a horse--it used to be 40
+acres and a mule, but it's 100 acres and a horse right now--
+because of the situation in the economy.
+ So certainly land values aren't going back up. And the
+question is, at what point do they start falling, then, in
+value?
+ Mr. King. I just thank all of the witnesses. And we will
+keep sending you corn because we don't know how to make grits.
+ [Laughter.]
+ Chairwoman Dahlkemper. I just have one last question, I
+think, for all of you. As we look forward, obviously we want to
+prevent recalls is really the issue here. You have talked a
+lot, Mr. Koehler, about the cost of what this particular recall
+has cost your industry.
+ I don't know if any of you could address this. This is just
+kind of looking in the past. In terms of your industries and
+the recalls, whether we're talking about beef, whether we're
+talking about tomatoes, spinach, peanuts currently, the cost,
+do you have any idea what the cost is to your individuals
+within your industries? You know, what kind of costs have they
+been dealing with?
+ Mr. Ambrosio. I know in the supermarket industry, it is in
+the millions of dollars every time we go through this because
+it is not only do you lose product, there is product liability.
+Plus, there is loss of product. Once you pay for that product,
+you throw it out. And a lot of those companies, they go out of
+business and then stand in line with everybody else trying to
+recoup your money.
+ Chairwoman Dahlkemper. Do any of them or whatever
+percentage have recall insurance?
+ Mr. Ambrosio. I think not too many. Recall insurance is a
+tricky one. It covers, it could cover, a variety of different
+things on the liability side, but we are looking also from the
+product loss side because if you are purchasing a million
+dollars worth of inventory and that million dollars worth of
+inventory has to be thrown out, then that is a tough pill to
+swallow.
+ Chairwoman Dahlkemper. Anyone else address that within your
+industry?
+ Mr. Conrad. Recalls at the retail level are catastrophic if
+there is an event, an event such as the Jack in the Box chain
+or Taco Bell in the salad or in Cheyenne, Wyoming Taco John's.
+You know, those events were catastrophic for those companies
+because people got sick.
+ Chairwoman Dahlkemper. And how about your individual
+restaurants? Because you represent a lot of the small
+entrepreneurs, rather than the chains, correct?
+ Mr. Conrad. That's correct. The small entrepreneur just
+pitches it more often than not. He takes his case of spinach.
+He takes spinach off the menu. And he doesn't put spinach back
+on the menu until such time as it goes away.
+ Chairwoman Dahlkemper. Ms. Austin?
+ Ms. Austin. Well, I spoke to the potential losses for our
+individual company. And if you multiply those by even IDFA, the
+530-member, it is in the millions. There is the out-of-pocket
+cost. There is also the disruption and the distraction from
+day-to-day, business growth opportunities, and reintroducing
+product in the market. And, again, until people are comfortable
+buying those products, your sales suffer.
+ So it definitely has a huge ripple effect. Until we get
+through it, we are not sure how long that will last? But if in
+the case of dairy, because it is a very seasonal business, if
+companies right now are in a position where they can't buy
+ingredients to make ice cream for the season and they don't
+have ice cream to sell, they may suffer when they get to July
+and August and they don't have product to sell and their
+bankruptcy or going out of business would really not look like
+it is related to the recall, but it has an awful lot to do with
+how they position themselves and set themselves up for success.
+ Chairwoman Dahlkemper. Have any within your industry gotten
+to that point?
+ Ms. Austin. Well, we haven't approached the season yet, but
+I can tell you from our perspective cash flow is huge. And the
+immediate impacts for us because we have product that we are
+not getting paid for, in the case of ice cream, we figure the
+PCA inclusions represent only about one-tenth of the product
+cost. So the product cost to us multiples substantially.
+ We have to pay our cream and dairy suppliers. We have to
+pay for sugar. We have to pay for packaging. And then we throw
+all of that out. And to resupply, we have got to buy it all
+again.
+ And so it is really a double hit. We don't have cash coming
+in, and we have a lot of cash going out. And we are at a
+critical season where we need to be building our inventory
+because we don't have the infrastructure to manufacture the
+peak demand.
+ So if we are not able to make enough in July and August,
+then our sales will suffer as a result of that.
+ Chairwoman Dahlkemper. Last, Ms. Vanco?
+ Ms. Vanco. At the farm level, it is very, very difficult to
+measure the impact of a recall because those are products that
+have been produced after they have left our farms. We just sell
+the bare product to you. And so the trace-back is very hard to
+measure.
+ I do know that the BSE cost the whole country in the
+millions of dollars when that cattle lost their market. On our
+particular farm, it would have been in the thousands. But it is
+very, very difficult to measure because everything that we sell
+fluctuates daily on the prices that we get. It is really hard
+to measure what the total effect is from a specific thing that
+is making those prices go up and down.
+ It does cost us thousands of dollars, I know, on a beef
+recall, but I can't tell you how many.
+ Chairwoman Dahlkemper. Well, I want to thank everyone on
+the panel today. This was very timely and informative testimony
+that you gave. And I appreciate you all taking the time to be
+down here with us to discuss this topic.
+ And, with unanimous consent, the members will have 5 days
+to submit statements and suppurating materials for the record.
+If I have unanimous consent, without objection, this hearing is
+now adjourned.
+ [Whereupon, at 12:00 p.m., the Subcommittee was adjourned.]
+
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