March 23, 2011
With prices at the pump galloping toward $4 per gallon, feed prices soaring to historic highs and global food prices topping high-water marks never fathomed, CFOs of meat and poultry processing firms have been forced to sharpen their pencils and streamline operations to survive. Earlier this month, Smithfield Foods reported record-breaking performance for its fiscal third quarter, which served to sustain cautious optimism in the industry that the worst of the economic recession may be in the rear-view mirror.
Many firms’ executives have made some sleep-depriving decisions over the past 24 months in response to stifling market conditions, including Smithfi eld, which committed to cutting $125 million in costs by the start of this year. The time and resources dedicated to scanning operations for opportunities to increase a yield percentage here or to save a labor dollar there has undoubtedly dominated the mindshare of leadership teams steered by the Larry Popes, Donnie Smiths and Wesley Batistas of the industry, as well it should. However, it is at times like these, when companies are operating to minimize financial losses that they could be most exposed and vulnerable to less-obvious threats.
Immediately after the terrorist attacks of Sept. 11, 2001, there was outward concern and public discussion for several years about the threat of bioterrorism on the US food supply. That attention seems to have waned as the recession and its impacts have assumed front-burner status.
In 2004, the Rand National Defense Research Institute’s Larry Chalk summarized some of the threats and identified areas where the food industry’s soft underbelly was most exposed. Chalk categorized agroterrorism as “the deliberate introduction of a disease agent, either against livestock or into the food chain, to undermine socioeconomic stability and/or generate fear.” His report summary went so far as to say: “Food processing and packing plants tend to lack uniform security and safety preparedness measures, particularly the smalland medium-scale facilities.”
I hope I’m wrong in my assessment that while the industry’s leaders address the most immediate threat (becoming leaner and meaner operations in the face of a recession), they are distracted from what is a much clearer and more present danger: Threats related to food security and bioterrorism. Some companies, including OSI Industries, are quietly raising the bar and setting the standard on this front.
It is heartening to hear about companies that have taken action to address a real issue that is temporarily off the radar of most. Likewise, events like the International Symposium on Agroterrorism, scheduled for April 26-28 in Kansas City, Mo., and initiated by Heart of America Joint Terrorism Task Force and the Kansas City Division of the FBI, is a clear indication that a growing amount of attention is being paid to what is a serious issue domestically and globally. I attended the inaugural ISA event in 2005 (which was held again in 2006 and 2008) and was impressed with the thoroughness of the program and convinced of the many vulnerabilities in the food production chain. My biggest concern at the time was how few of the 1,000-plus attendees were representing companies or trade associations in the meat and poultry processing industry. It is my hope that ISA 2011 will signal a new era of awareness for this industry and a realization that this is no time for its collective guard to be down. For more information on ISA 2011, go to www.fbi-isa.org