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March 10, 2013

Cutting pork: Inspector furlough forced by sequester cuts could bring plants to a halt

Meat industry spokesmen say better way should be found.

LOGANSPORT — The equation is simple. Without meat inspectors, a pork plant can’t run.

That’s the gist of concerns among pork processors after the U.S. Department of Agriculture announced it’ll be furloughing its meat inspectors starting later this year to comply with the federal sequestration budget cuts.

Sequestration or “the sequester,” which took effect March 1, requires a 5.1 percent cut in the 2013 budget in each USDA program whose funding is categorized as discretionary, according to MeatPoultry.com, a business journal for meat and poultry processors.

That includes some key food safety and nutrition programs, like the Food Safety and Inspection Service, that USDA secretary Tom Vilsack said were essential but wouldn’t have enough funds appropriated to operate at existing levels.

Vilsack has said that each inspector would have to take a dozen furlough days by the end of 2013. Those wouldn’t start happening, however, until after inspectors’ unions and the inspectors themselves had received at least 30 days’ notice that furloughs would be implemented and given a chance to voice any concerns.

At the average large meat processing plant, a dozen USDA inspectors are on duty during each shift, according to senior vice president Janet M. Riley of the American Meat Institute, a meat and poultry trade association. Meat processing plants can’t operate without a minimum number of inspectors on site, she said.

Spokesmen for two local pork processing plants employing nearly 4,000 people all told have said they don’t think the USDA is going to go through with furloughs.

“Because meat inspection has historically been considered ‘essential’ by the federal government, we’re optimistic there will be no interruption in this public health and safety function,” said Worth Sparkman, spokesman for Tyson Fresh Meats, whose pork processing plant on Logansport’s west side employs about 1,900 people. “We do not expect any immediate impact on our business.”

At Delphi’s Indiana Packers pork processing plant, where more than 2,000 people work, the shifts have a total of 19 USDA inspectors, according to president Gary Jacobson.

“If they furlough those [inspectors] and we can’t operate, then we’re looking at a whole lot of people out of work,” Jacobson said. “The federal payroll tax alone would be at least 10 times the loss of those 19 federal inspectors being out.

“I really expect they’ll come up with a different means of accomplishing their savings because it doesn’t make logical sense,” he said.

USDA administrators have discussed furloughing inspectors on staggered schedules, said Jacobson, so as not to have them all gone at one time. But even that could be difficult to pull off.

“There has been discussion of roving, or a rotational deal of having so many inspectors out at a time,” he said. “But again, it’s a highly regulated industry, meat production, so you can’t just take inspectors out and expect to operate normally.”

Inspectors operate as a team, Jacobson explained, each covering a different area of the plant in some cases.

Indiana Packers in Delphi processes upwards of 100 semi-loads of hogs per day, according to Jacobson. “If we have to stop that process, it creates a backup, a ripple effect all the way through the system.”

Hog farmers will still have to make room for piglets being born and sell off hogs ready for market somehow, he explained.

An economist specializing in food production said if plants do end up shutting down temporarily, that effect on consumer prices will be difficult to quantify quickly.

“If they close the plant, the number of hogs coming to market are going to come no matter what,” said Len Steiner, a Manchester, N.H.-based consultant. “It’s certainly likely to raise the cost of production because all of a sudden you’re trying to send the same number of hogs into a four-day workweek.”

But since many factors affect the prices at the grocery store — and because the USDA hasn’t announced its plans yet — he couldn’t say how grocery store pork prices could change.

Any change at the cash register, even if it is due to plants shutting down, is “going to be hard to identify as such,” he said. He added, however, that furloughing inspectors “certainly [has] the potential to raise the costs in the production system, and eventually if you raise the cost the consumer is going to pay for it.”

Spokesmen from trade associations and pork processing companies have spoken with legislators to try to avert USDA inspector furloughs.

“Disrupting food inspection is a disservice to all consumers, including those who work in our plants, raise our cattle, chickens and hogs and invest in our company,” Sparkman said. He added that Tyson is working with industry, labor and consumer groups to help the USDA meet sequestration requirements while still providing inspections.

Sarah Einselen is news editor for the Pharos-Tribune. She can be reached at sarah.einselen@pharostribune.com or 574-732-5151.

 

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