Slaughterhouse Jive

Dallas-based Supreme Beef fought what it believes are unfair regulations, only to wind up on the USDA's killing floor

Editor's note: One thing you will notice about this story is the relative lack of information from the "other side," in this case, the USDA. During six weeks of reporting, theDallas Observer made repeated attempts to obtain comment from the federal agency concerning its new testing procedures and its battle with Supreme Beef. A USDA spokeswoman declined to comment specifically on Supreme Beef, which is understandable, considering that the parties are involved in a lawsuit. But the USDA also refused to comment in general on its own regulations and testing standards--which seems unreasonable. Two agency spokeswomen, who presumably are paid to dispense this information, simply referred theObserver to the USDA Web site. As a result, the USDA's position in this story is gleaned primarily from other news accounts and from court papers filed in response to Supreme Beef's lawsuit against the agency.

On Christmas morning last year, Steven Spiritas got the news he dreaded most: The U.S. Department of Agriculture had found a deadly strain of E. coli bacteria in a shipment of his ground beef. He knew they'd find it eventually. How could they not? As Spiritas saw it, the USDA had been out to get him ever since he'd challenged the federal agency's new testing procedures in court. Though he'd never had problems with bacterial contamination during the three decades Supreme Beef had been in business in Dallas, he knew the USDA was going to test his beef until they found trouble; one of the new inspectors, Spiritas says, even bragged openly about his mission to run Supreme Beef out of business.

Now the USDA had dealt the killing blow.

Steven Spiritas, flanked by his twin sons, Ryan and Jason, believes the USDA ran his family-owned beef plant out of business.
Mark Graham
Steven Spiritas, flanked by his twin sons, Ryan and Jason, believes the USDA ran his family-owned beef plant out of business.
Spiritas' office is one of the few places in the shuttered Fair Park plant that still has power. Supreme Beef filed for bankruptcy in September.
Mark Graham
Spiritas' office is one of the few places in the shuttered Fair Park plant that still has power. Supreme Beef filed for bankruptcy in September.
Both of Supreme Beef's plants--in Dallas (top) and Ladonia, in Fannin County (bottom)--have ceased operation. Some 400 employees lost their jobs, and the Ladonia plant's closing effectively shut down the entire town.
Mark Graham
Both of Supreme Beef's plants--in Dallas (top) and Ladonia, in Fannin County (bottom)--have ceased operation. Some 400 employees lost their jobs, and the Ladonia plant's closing effectively shut down the entire town.

"We issued a recall that day, Christmas Day," Spiritas says, sitting in his upper-floor office, one of the only places in Supreme Beef's aging meat-grinding plant where the power is still on. "It was a nightmare. That's when the newspapers went crazy on us. All this stuff."

A national recall for a ground-beef company like Supreme Beef isn't merely an embarrassment--it's a disaster. Consumers are frightened and sickened at the thought of what they view as fecal contamination of beef. Retailers can't get the product off the shelf fast enough. For Spiritas, or any other ground-beef manufacturer, there is no defense. Beef found with Escherichia coli O157:H7 is considered just as foul and unfit for humans as if it were mixed with dead rats ground up whole.

"The recall ruined us," Spiritas says bitterly. "We got massive press. Then they terminated our school-lunch contracts. We got a lot of adverse press on that, and it was not accurate. We became radioactive to suppliers, and we became radioactive to customers. They were scared to death."

Today, the results of the recall are conveyed most eloquently by the silent machinery in the darkened plant and by a framed photograph on Spiritas' desk that he's turned face-down in disgust. It's a shot of him and Agriculture Secretary Dan Glickman in better times.

Spiritas, Supreme Beef's 55-year-old president and chief executive officer, wondered how things could have gone wrong so quickly for his 400-employee company. Before tangling with the USDA, the family-owned Supreme Beef was one of the Southwest's largest ground-beef producers. With a grinding plant near Fair Park and a slaughtering plant in Ladonia, in Fannin County, Supreme was cranking out more than a half-million pounds of USDA-approved ground beef a day and selling to mega-retailers such as Wal-Mart, Tom Thumb, and Albertson's, as well as fast-food restaurants such as Dairy Queen and Taco Bueno. Supreme Beef held a lucrative contract to supply beef for school lunches for, among others, the Dallas Independent School District, and was in top standing with the federal government in all respects. The company had never recorded a positive E. coli test in thousands of tests conducted regularly during three decades of production, and no one had ever gotten sick from Supreme Beef's product. The company's reputation was stellar.

But that was before the company was dragged kicking and screaming onto the USDA's killing floor. The USDA's problem with Supreme Beef wasn't E. coli--not at first. In fact, while the USDA's actions were bankrupting Spiritas' ground-beef company, Supreme was home to what others in the industry considered one of the cleanest plants in the United States. Because of intense federal scrutiny, it was certainly the most heavily inspected and tested. The California-based National Meat Association, one of very few beef-industry voices that fearlessly supported Supreme Beef when it got in trouble, backs up everything Spiritas says about how his meat-grinding plant was a model of cleanliness and how it was run out of business by the USDA. Rosemary Mucklow, the association's executive director, says that Supreme Beef's operation was highly regarded, and that Spiritas still is.

"He is a man of great respect. He's loved and feared as a good competitor in the business by his peers," she says. "What happened to him was a shocking hit, if you will, to others in the industry."

Even one of the USDA's top administrators, Tom Billy, swore in federal court that, as far as he or anyone else at the USDA was concerned, Supreme Beef's operation was clean and wasn't the problem.

Instead, the problems began when Supreme Beef, in an effort to keep ahead of its competition, voluntarily entered the USDA's new science-based beef-testing program way ahead of schedule. Because it was in the program early and struck out under the USDA's super-strict new testing regimen, Supreme Beef became the first company to challenge the USDA's authority to enforce the new standards embraced by consumer groups and President Bill Clinton. Supreme Beef took the federal government to U.S. District Court and won--blocking the USDA's authority to enforce its new standards. Even more infuriating to the USDA, Supreme Beef in a very public way advertised what microbiologists and many in the beef industry were already saying among themselves: that the new testing standards are terribly flawed.

Under the new regulations, nothing Supreme Beef ever did was enough to satisfy the USDA. And to the alarm of the beef industry, Supreme Beef would go into bankruptcy while doing everything possible to comply with the government. What happened to Supreme Beef, industry insiders say, could happen anywhere.


When Bill Clinton took office in January 1993, hundreds of Washington State residents, many of them children, were lying in hospital beds, critically ill from eating Jack in the Box hamburgers. The stories of "cherub-cheeked" children sickened and killed by contaminated ground beef were horrible and frightening. In the end, hundreds would be hospitalized from undercooked and E. coli-tainted ground beef. Four children would die from acute kidney failure and seizures associated with contracting E. coli O157:H7.

Before Jack in the Box, this particular strain of E. coli was practically unheard-of in the beef or restaurant industry. The Food Safety and Inspection Service (FSIS), a division of the USDA, believes a genetic mutation involving shigella (a strain of bacteria that can cause dysentery) and E. coli occurred, creating what is known as shiga-toxin, which produces O157:H7. Much research has been done since E. coli O157:H7 was first identified, but experts still don't know why the pathogen--a microorganism that can cause disease--appears intermittently in cattle. E. coli O157:H7 isn't harmful to cattle, and its presence is neither long-term nor predictable. But it can be deadly to humans. Very little of the pathogen, as few as 10 organisms, is needed to infect a human. The very young and very old are particularly susceptible. An E. coli O157:H7 infection can cause what is known as hemolytic-uremic syndrome, leading to kidney failure in the very young and thrombotic thrombocytopenic pupura, which causes a similar illness, in adults.

After the Jack in the Box scare, Americans wanted something done to modernize the USDA's 90-year-old meat-inspection program. Consumers demanded that the agriculture department take action, and in 1994, raw beef containing E. coli O157:H7 was declared by the USDA to be adulterated and unfit for human consumption.

To help identify meats containing E. coli and other potentially dangerous pathogens, administrators created a new food-safety standard first developed for the space program in the 1960s. Called the Hazard Analysis and Critical Control Point (HACCP, often pronounced hassip), the standard subscribes to the idea that meats can become contaminated at certain critical times during processing, such as hide removal. Inspectors use microbiological spot testing to estimate the presence and levels of certain bacteria. If the numbers of bacteria are high, then some part of the food-preparation procedure has failed. The new inspection process was a major departure from the old "poke and sniff" method, which relied heavily on visual inspections of meat at the slaughterhouse.

Glenn Morris, professor and chairman of the Department of Epidemiology and Preventative Medicine at the University of Maryland School of Medicine, was one of the scientists who helped write the HACCP regulations. Under the old system, he says, USDA inspectors basically ensured that animals were alive and healthy before slaughter. The new standard required individual plants to keep their operations free of excessive bacteria, he says. "It's a system whereby each plant is essentially held responsible for defining what the major problems are in the product it is producing, and for developing appropriate control measures for those hazards," Morris says.

The USDA also wanted some teeth in its new plan and asked Congress to amend the Federal Meat Inspection Act so that the USDA had authority to withdraw its inspectors if the new standards were not met. (Inspectors must be present at any USDA-approved meat-processing plant for the plant to operate legally.)

The meat industry vehemently disagreed with the idea. While testing could be used to ensure that cleanliness standards were being followed, it should not be used as a "gotcha" to shut a meat plant down, industry leaders said. Congress agreed with the industry and rejected the proposed legislation twice--most recently in July.

"Industry was very, very vocal and adamant that it is unfair to use a microbial standard to penalize a firm," Spiritas says.

Consumer groups, however, liked the new standard and pushed hard, and President Clinton supported the changes. Jack in the Box was still very much in the public's memory, and Clinton wanted the new food-safety program to be one of his presidential legacies. So, without legislation backing it up, the USDA in 1996 went ahead and adopted its new testing plan.

To figure out what levels of bacteria should be considered unacceptable, the USDA collected small samples of beef at 563 plants around the United States. Then the agency calculated averages for the prevalence of pathogens such as salmonella. Spiritas and other Southern beef producers would learn later that the samples the USDA used were mostly from places besides the South, where higher temperatures combined with moisture provide an ideal breeding ground for salmonella. "About 70 percent of the samples of the 563 plants were done in the East Coast and West Coast," Spiritas says. "There were very few Texas plants sampled."

Even worse for Southern producers, the USDA decided to use salmonella as its primary pathogen for testing. Salmonella lives in the intestinal tracts of humans and other animals, including birds; shows up in beef, poultry, and vegetables; and is typically transmitted to humans through salmonella-contaminated foods, according to the Centers for Disease Control and Prevention, a federal agency. About 1.4 million Americans contract mostly non-life-threatening food-related illnesses from salmonella each year. The USDA never claimed salmonella was potentially deadly like E. coli O157:H7. That strain of E. coli is considered so dangerous that if it's discovered on meat, the USDA immediately asks the meat producer to voluntarily launch a recall.

For purposes of the new standard, salmonella was declared an "indicator" pathogen. According to this logic, the presence of a lot of salmonella means there are probably a lot of other bad bacteria such as E. coli O157:H7.

The Food Chemical News, which publishes beef and other food-industry news, ran a report on the new testing standard that says some at the USDA were concerned about it. "Many officials at the department at the time knew that the salmonella testing component stood on shaky legal ground and would likely be challenged," the 36-page report says. "Many sources at USDA who worked at the department at the time describe heated battles about the legality and scientific validity of the salmonella standards."

Spiritas says the beef industry was way ahead of government and was already doing a great deal to reduce the levels of salmonella and other bacteria. Industry, not government, was driving changes, he says. "Right after Jack in the Box, industry, including our company, got very concerned," he says. "No one wanted to face the prospect of manufacturing a ground-beef product that could make somebody sick and that could expose the company to massive liability in the marketplace."


Spiritas was confident his plant was clean and ready for the USDA's new program. Supreme Beef's advanced technology was at least as good as and probably better than that of other U.S. plants, he thought. The company was the largest Department of Defense beef supplier for American troops from 1975 to 1989. After that, the company landed a huge contract to supply ground beef to the federal school-lunch program. Both the Department of Defense and the USDA's Agricultural Marketing Service lunch program required strict protocols and standards of cleanliness, and both programs used their own inspectors.

"It's a very strict and detailed inspection. It's very difficult to comply with," Spiritas says. "We were doing everything...beyond and above what's called good manufacturing practices."

Supreme Beef had started doing its own microbiological testing after the Jack in the Box scare, and the company supplied big-name retailers that won't tolerate substandard products, he says. "Our company was a major producer," he says. "We were producing 500,000 to 600,000 pounds of ground beef a day, three million pounds a week. You have to have acceptable product. You have to be a leader in the marketplace to keep that much demand and keep those major retailers happy."

Supreme Beef employed a professional cleaning team at night and used modern techniques to keep the plant clean during daily operations. Employees had their boots automatically sprayed with sanitation solution intermittently throughout the day, and they were required to dip their hands into a publicly visible sanitizer after returning from the bathroom.

No matter what the USDA found the average level of salmonella to be for U.S. ground-beef plants, Spiritas says, he and his executives were certain their operation would be in the ballpark. "We weren't concerned, because whatever their baseline numbers were, we figured, OK, we ought to fall within mid-range, if not better," he says. "We had extremely strict quality control programs at this company, far more restrictive than what the USDA required."

That confidence led to a mistake that would end up killing Supreme Beef. Companies in the largest category of beef producers, those with more than 500 employees, were supposed to be the first to start complying with the HACCP program. Because Supreme Beef was considered a small company, it didn't have to start complying until January 1999. But Supreme Beef asked the USDA to get them into the program faster. It wasn't that Supreme Beef wanted more federal scrutiny, Spiritas says; it just didn't want to lose business.

"Our company petitioned the USDA to accelerate and go under HACCP a year earlier, because we did not want the large firms to have a perceived marketing advantage," he says. "We didn't want them to be after our customers, saying they are already operating under HACCP and Supreme Beef is not. We wanted to go on it early. We thought we were ready."

The USDA agreed to put Supreme Beef under HACCP six months early. That meant inspectors could randomly select Supreme Beef for testing at any time.


Under the HACCP program, inspectors working for the USDA's Food Safety and Inspection Service can show up at any time and take 53 samples--one a day--of ground beef from a plant like Supreme Beef's. Out of 53 samples, up to five could test positive for salmonella. If a plant received a passing grade by showing five or fewer positive samples, it went back into the random pool of meat plants and might not be tested again for six months.

But if a plant failed, the USDA required the company to take corrective action. Once that was done, the USDA immediately tested another batch of 53 samples, and the process was repeated. Under the USDA's policy, if a plant failed batch testing three times in a row (three strikes and you're out, one USDA official says), then the inspectors can be withdrawn and the producer shut down.

Supreme Beef entered the HACCP program in June 1998. In February 1999, Spiritas learned that Supreme Beef had failed its first phase of testing--badly. He was shocked.

"I wasn't really in the loop at that point, but I knew our operations people were on top of it. We had a quality control department that consisted of 11 people," he says. "We had 31 people cleaning this plant at night. We had a damn good management team that was on top of it."

Spiritas says his company went all out to determine what was going on. They began their own testing, using a part of each ground-beef sample that was to be tested by the USDA, and hired IDEXX, a private microbiological testing firm. Spiritas told IDEXX to find the problem. "We said, you've got a blank check. You go in, and you test our plant. You do whatever you need to do to test our plant, test our equipment, and test the meat we are bringing in, and then give me a report. I want to know if there is any problem, any way that Supreme Beef is contributing to salmonella in the meat," Spiritas says.

"They did floors, walls, ceilings, equipment," he says, waving his arms up and down. "If this was a conveyer, they'd go into the most difficult spot, where there is a crack, almost impossible to clean. They didn't find a single positive [test]."

In July 1999, the USDA notified Supreme Beef that it had failed a second round of testing. There were fewer positives for salmonella, but it was still a failure overall. One more failing round, and Supreme Beef could be shut down. Supreme Beef's own testing--of samples taken directly from the USDA's samples--was not showing as much salmonella.

By then, IDEXX had determined the source of the salmonella contamination. Spiritas was right: It wasn't the grinding plant; it was the beef itself. Supreme Beef didn't do any slaughtering at its Dallas plant. For most of its ground beef, it bought what is known in the industry as boneless beef trimmings. Its suppliers cut up sides of beef for steaks and roasts, and Supreme Beef bought what was left over for ground beef. This is how ground beef is commonly made. All of the beef trimmings Supreme Beef used--including beef from its slaughtering plant in Ladonia, which provided 35 percent of the trimmings--were USDA-approved and were being produced under the HACCP umbrella. But, while HACCP requires tests for salmonella during the slaughtering phase, the trimmings, the final product delivered to Spiritas, are under no standards at all. Because salmonella testing on beef carcasses is hit-or-miss, a carcass that is about to be cut up might not test positive for salmonella even when it is present. The majority of the trimmings Supreme Beef bought were from North Texas-area suppliers, and Supreme Beef's testing showed that all of them, every single supplier they tested, were selling beef trimmings containing salmonella.

An IDEXX official confirmed those test results in an interview with the Observer.

The beef was tested inside the suppliers' own shipping containers before being transported into Supreme's Dallas plant, Spiritas says. Mixing that beef into a larger batch of ground beef would naturally spread the bacteria throughout Supreme Beef's product.


Now, Spiritas thought, we are getting somewhere. Spiritas had been in the industry for three decades and was well known in industry circles. Spiritas was acquainted with Agriculture Secretary Dan Glickman and had no reason to doubt that the USDA would work with him to correct any problems. The system was new, and the USDA must have expected there to be some kinks. Armed with the plant-testing results showing that USDA-approved beef was the problem, Spiritas approached the USDA. "We had all that data and went to the USDA with it. We said, Look, the source of the salmonella is the meat we are buying from the other plants where you have inspectors," he says. "We should be able to rely that the meat is OK to be used in ground beef. We said, Why don't you have a standard on boneless beef? They wouldn't answer the question."

Marianne Elbertson, public affairs specialist with the FSIS in Washington, D.C., confirmed that the USDA does not have a separate standard for boneless beef. "Is the boneless beef trim tested for anything? No, it is not," she said.

So the USDA approved the beef that was coming into Supreme Beef's back door but was rejecting the same product when it came out the front. It didn't make any sense.

"Ground beef is merely a derivative product of the trim...If salmonella is in the trim, it's for certain that it's going to be in ground beef," Spiritas says. "So why don't you develop a standard on the trim? I know the answer to that question. If they did it, they'd shut down the meat plants all over the country, because no one would be able to comply."

So Supreme Beef knew exactly what was causing the problem but didn't know what to do about it. It is not economically feasible to buy beef from a colder climate where salmonella levels are lower, Spiritas says. None of Supreme Beef's suppliers would agree to sell their USDA-approved beef trimmings on a pass/fail basis pending Supreme Beef's own salmonella test results. And the USDA was unmovable. The frustration was starting to build.

Spiritas says salmonella is simply more prevalent in beef raised in warmer climates. Nothing slaughterhouses in the South do is different from procedures anywhere else in the United States.

Despite the test failures, Supreme Beef's product was still being shipped out, because salmonella in ground beef doesn't automatically make it unfit for humans or prompt a recall. People are supposed to kill salmonella by proper cooking, the same way they'd kill pathogens in pork or chicken. "We never had a problem with any of our product," Spiritas says. "We still weren't having a problem with the product. We were having a problem with the standards."

The third and final batch of testing was approaching. Failure would mean that the USDA could withdraw its inspectors and close the company, at least until the problem was fixed. "If USDA does not furnish inspection, you are shut down. It's a federal crime. If you are a federally inspected meat plant, you cannot process," Spiritas says. "You cannot ship. You cannot operate without inspectors."

Spiritas says he needed the USDA to agree not to shut down Supreme Beef if it failed its third set of tests. Supreme Beef was desperately trying to figure out a way to meet the salmonella standard. If it failed, Supreme Beef would devise a corrective program to meet the demands of HACCP, just as 19 other Texas beef plants are doing right now. The USDA agreed to allow Supreme Beef to stay open if it failed its third round of tests.

And sure enough, the USDA notified Supreme Beef on October 19, 1999, that it had failed the third round. The agency had found six positives out of 37 samples. It was almost good enough, with five being a passing grade, but not quite. Still, the USDA lived up to its part of the agreement and let Supreme Beef stay open. It stopped testing. Supreme thought it was living up to its part of the agreement and continued trying to fix the problem. It exchanged letters with the USDA about corrective actions. Spiritas breathed a sigh of relief. He thought Supreme was back in the random pool for testing. He still couldn't figure out why Supreme Beef's tests on samples taken from the same batches pulled by the USDA inspector showed much lower salmonella levels, but by now he had lost faith in the USDA's laboratories. "We were waiting to hear back from them, and we're thinking we're going to get a letter saying they accept our plan and we go back into the random pool, and they're not going to test us for a while."

Spiritas' feeling of relief was mistaken. On November 29, 1999, Spiritas got news that floored him. The USDA notified him that inspectors were going to be withdrawn from his plant--the very next day. Spiritas called his lawyer.

"I didn't want to do any legal battles with the United States government. It's a no-brainer," he says. "No, you can't win a battle with the United States government."

Before Supreme Beef, it had taken a much greater offense than the presence of some salmonella for the USDA to take the drastic step of withdrawing its inspectors, which effectively shuts down any meat plant. For instance, records show that in 1999 other meat producers lost the right to USDA inspection for trying to bribe an inspector, for "causing meat and poultry products to become adulterated by rodents" and then distributing them, for "selling and transporting adulterated meat food products with intent to defraud," and for allowing uninspected cattle to be slaughtered, among other offenses.

A federal court granted Supreme Beef a temporary injunction, which kept inspectors on the job at least until a hearing could be held.

Spiritas says that he tried to continue working with the government, but that every time he thought he was close to an agreement, the USDA would back out.

At a preliminary injunction hearing in U.S. District Court in Dallas in December 1999, Supreme Beef argued that it had not gotten due process from the USDA. Judge A. Joe Fish ruled in Supreme Beef's favor, requiring the USDA to keep inspectors at the plant until the case was resolved legally. The decision didn't make the USDA happy, and Spiritas says the agency made sure he knew it. "They brought in their new inspection guy. He was targeted to come in here on a mission, in our opinion."

The new inspector "bragged openly about his mission to run Supreme Beef out of business," Spiritas alleges in court documents.

"They put us on E. coli testing. That is against their published policy," Spiritas says. "And if you test enough, you are certain to find H7."

The latest government reports on E. coli seem to back that up. According to the FSIS, 63 percent of cattle herds are intermittently shedding the E. coli O157:H7 pathogen in excrement. Bonnie Buntain, assistant deputy administrator for the USDA/FSIS, Office of Public Health and Science, recently estimated that up to 16 percent of feedlot cattle carry E. coli O157:H7 into processing plants. Up to 2.4 percent of cattle carcasses that have been treated in numerous ways to remove salmonella and E. coli still head to the grocery store or restaurant containing E. coli O157:H7, she estimated.

Mark Powell, a USDA risk scientist, reported earlier this month that the agency estimates that 272,000 servings of ground beef in the United States each year are contaminated with E. coli O157:H7, and that between 9,500 and 29,000 Americans are sickened annually because of it. Powell's report, which he delivered to the Society for Risk Analysis, says that most of the E. coli-tainted servings of ground beef contained less than the 10 organisms likely needed for infection and that, probably because of proper cooking, the number of illnesses related to contaminated hamburgers is down.

Powell said the reason E. coli O157:H7 is thought to be more prevalent and is showing up more in testing is not necessarily because the organism is spreading, but because ground beef is being tested more often and with much more sensitive tests.

The USDA's policy is to test plants randomly for E. coli O157:H7. If it gets a positive result, the USDA tests the plant again for 15 consecutive days. If the 15 tests are clean, the plant goes back into the random pool. But, for Supreme Beef, the USDA used one of its new tests and one that is about four times more sensitive than its previous tests, according to FSIS documents. It also tested Supreme Beef every day. After about three weeks of testing, it found a positive result and notified Spiritas, who ordered the Christmas Day recall. It was a public relations disaster for Supreme Beef.

Nonetheless, the company continued to fight. The USDA kept testing for E. coli O157:H7 after Christmas for a total of 40 days, until the agency finally accepted Supreme Beef's plan for corrective action. By then, Supreme was losing customers.

"They were out to destroy our company," Spiritas says flatly. "It literally in spades is the politics of destruction for a small, family-owned business."


Ironically, at the same time Supreme Beef was bleeding to death from a loss of business, it was prevailing at every turn against the USDA in federal court. In May of this year, Judge Fish ruled in favor of Supreme Beef's motion for summary judgment in the case. He said that under federal law, Supreme Beef had not done anything that allowed the USDA to withdraw its inspectors. Fish pointed out that the USDA's top administrative official said in court that Supreme Beef's plant was not a problem. And, Fish said, the results of bacterial tests can't be used to prove a plant is unsanitary enough to withdraw inspectors under the Federal Meat Inspection Act. In other words, Congress never gave the USDA the legal authority to pull out inspectors and close processing plants based on the new testing program.

"As this court remarked in the preliminary injunction hearing, the issue in this case is not whether salmonella and other pathogens in meat [are] desirable or acceptable. The issue instead is whether the USDA--in creating and attempting to enforce the performance standards and salmonella tests at issue herein--was acting within the authority granted it by Congress," Fish wrote. "This court concludes that USDA's withdrawal of inspectors from Supreme Beef's production facility was not, in the circumstances presented here, an action authorized by law."

The national press seized on the ruling. Syndicated columnist Marianne Means wrote, "That judicial nitwit held that a meat-processing plant showing unacceptably high levels of contamination with salmonella bacteria could not be closed down by federal inspectors. If little kids get sick from eating diseased hamburgers, that's not the industry's fault, U.S. District Judge A. Joe Fish in effect concluded."


As far as the USDA was concerned, the Supreme Beef case threatened to unravel its whole new testing system. If it had no authority to withdraw its inspectors, then its new system was meaningless and every beef producer in the industry would be thumbing its nose at the agency. The USDA needed to make an example of Supreme Beef, Spiritas says. His claim is inflammatory, but it is backed up by others in the beef industry.

After the court decision, Tom Billy, one of the USDA's top administrators, issued a statement to the press in which he asked Supreme Beef to voluntarily close its doors.

Spiritas responded by issuing another press statement saying that he had no intention of stopping ground-beef production at his plant. "We were going to continue making high-quality ground beef just like we always had," Spiritas says.

The USDA struck back by announcing publicly that it believed Supreme Beef's product was unsafe, and that it was putting the company back on indefinite, daily testing for E. coli O157:H7. As long as Supreme Beef was in business, the tests would continue, the USDA told Supreme Beef.

Spiritas says that after the first recall, he made a personal commitment never to put Supreme Beef or his employees in that position again. He began holding his beef shipments at the Dallas plant until the E. coli test results were returned from the USDA. "You can either ship the product to the marketplace, or you can do what's called test and hold. That is, you make your product, but you hold it at the plant. You do not allow it to go to commerce until you have that result," Spiritas says. "We asked the government to guarantee us when we'd get the test results back. They wouldn't do it."

Supreme Beef's production was already way down because of its dwindling customer base. Wal-Mart, Albertson's, and Dairy Queen were among those who quit doing business with Supreme Beef after the recall, Spiritas says.

Then the USDA announced publicly that the company had failed another batch of salmonella tests. As a result, the USDA said, the Agricultural Marketing Service, which operates the school-lunch program for schoolchildren from low-income families, was canceling its contract with Supreme Beef and recalling 1,200 tons of beef shipped to schools in 16 states in the spring. It didn't matter that most of the ground beef was already eaten or that no one had gotten ill from it, or that salmonella isn't considered an adulterant in ground beef any more than it is in chicken. The USDA's announcement made national news. To keep Supreme Beef out of the bidding for the coming year's contract, the Agricultural Marketing Service subsequently announced that it was changing its standards for ground beef to incorporate the USDA's new testing standards. Then the USDA appealed Fish's ruling.

Supreme Beef was a gasp away from death. "There was no way we could continue," Spiritas says. "When the USDA made the decision to appeal this case, we knew that they were not going to take off the boxing gloves. We could not continue to be subjected to unlimited E. coli testing. There's no firm in America that could pass unlimited E. coli testing. That's number one. Number two, no firm in America has ever been subjected to it."

Supreme Beef filed for bankruptcy in September.

Caroline Smith DeWaal, director of food safety for the Center for Science in the Public Interest, a nonprofit consumer advocacy group called "one of the most powerful food voices in the country" by The New York Times, disagrees that Supreme Beef was held to an impossible standard. She says that microbiological testing is working at other plants and that it has made the beef and poultry industries clean up their acts. Salmonella levels have dropped dramatically nationwide. Supreme Beef should have made sure the product it was buying, the boneless trimmings, was free from bacteria, she says.

"If the Jack in the Box company had said the same thing, then we would see a lot more contaminated ground beef on consumers' plates and in fast-food restaurants today, but the fast-food industry recognized that they could control the quality of the meat going into the hamburgers from fast-food restaurants by controlling their suppliers. Companies like Supreme Beef are being asked to do nothing less than what the fast-food companies did following Jack in the Box, and that is to monitor and control the quality of meat coming into their [businesses]."

The USDA stands by its testing methods and says that the reduced levels of salmonella and the large number of meat processors that meet or exceed the new standard point to the program's success.


Many in the beef industry disagree, though very few are willing to put their name behind it publicly. They say the USDA now has a big problem on its hands.

"There's something with salmonella that somehow it occurs more in the South than in the North, and disproportionately if you look at your baseline data," says Mucklow, of the California-based National Meat Association. "They [the USDA] have spurned an effort to have any kind of understanding or discussion.

"They say they don't see it. It doesn't take a rocket scientist to look at this data and say, Gee, there is something curious about this data here. It's hardly strange to microbiologists who find that salmonella likes a warm and wet environment, and you get more of that in Texas and the southern area than you do in the North," she says.

The USDA's own information shows that plants in the South are having difficulty meeting the new standards. The USDA's latest salmonella compliance report shows that 19 of 73 Texas plants tested have failed at least one sample set, and that four plants--two of which were Supreme Beef's Dallas and Ladonia plants--failed three sets. The other two failures passed their fourth round of testing.

Because of the court decision involving Supreme Beef, the USDA isn't moving to shut down any other beef producers, and they won't get tough until Supreme Beef's case is over, Mucklow says. They are afraid, she says, that courts in other federal districts will back up Fish's ruling.

"I would suggest to you that the agency in its own right, and this is just my assumption, has figured it better not have another Supreme on its hands," Mucklow says. "Its hands are very, very full in handling this one case, and like good regulators they can talk and they can negotiate and they can obfuscate. They can do a lot of things, but they don't have to bring another bride to the altar when they've lost."

Supreme Beef had supplied about one-fourth of the ground beef for the federal school-lunch program. The USDA's action against the company had the ancillary effect of raising the price of ground beef for schools and causing a national ground-beef shortage. The Agriculture Department reported in September that because of the new standard it adopted, which kept Supreme Beef out of the running for a contract, it was unable to buy enough ground beef for its school-lunch program.

The Nation's Restaurant News says schools need beef for everything from hamburgers to tacos and spaghetti, and that some schools have removed ground beef from lunch menus or contemplated buying from local markets. The price of lunch-program ground beef is up to $1.35 a pound, compared with $1.14 a year ago. In practical terms for schools, it means their federal lunch dollars aren't going as far as they did before Supreme Beef was forced out. This year, the federal government has spent $11 million more for 20 million fewer pounds of ground beef than it did during the same six months two years ago, according to Billy Cox, spokesman for the Agricultural Marketing Service. Cox says that the extra money is being spent to buy a better product and that beef producers are now meeting demand. "It is a new product, and we consider it a superior product," he says.

Another problem the USDA is having is that it is becoming obvious that testing ground beef for pathogens, particularly salmonella, is not practical, Mucklow says. Unlike a liquid that can be thoroughly mixed and then tested for even trace elements, ground beef, by its nature, is never completely mixed. So, while one side of a ground-beef patty can test negative for the presence of E. coli O157:H7, the other side can test positive.

"In a pound of hamburger, we might just be lucky or unlucky enough to take the little piece of meat that had microorganism on it," Mucklow says. "When you take a sample of ground beef, just a little piece of sample, all you get is what is in that exact sample. It cannot be truly representative of the pound of ground meat, and in order to test that pound of ground meat to get any kind of statistical satisfaction, you'd have to have lots and lots of samples."

Microbiologists outside the USDA appear to agree with those in the industry such as Mucklow. An article scheduled to appear in the International Journal of Food Microbiology next year says that the use of microbiology to test the end product is both impractical and misleading.

"A negative finding for a pathogen such as Escherichia coli O157:H7 gives no assurance that the organism is not present in a batch, although customers for beef commonly believe that it does," the article says. "...Batch testing of product is not an appropriate or effective means of assuring the microbiological safety of raw beef."

Mucklow suggests that the USDA could use a different indicator pathogen, one besides salmonella that is more reliably present in raw beef, to show that harmful bacteria may be present in a batch of ground beef. But, she says, the beef industry maintains that the USDA's HACCP standard should be used to monitor and maintain systems and protocols, not to say "gotcha" and effectively shut down a plant.

In court, the USDA is trying to get out of the jam that Supreme Beef caused. In its appeal, the USDA argues that Supreme Beef is now bankrupt and that there is no point for the court ruling to stay intact. One of Supreme Beef's lawyers, James Bowen of Jenkens & Gilchrist, says the agency's latest move will not hold up in court because the USDA is responsible for putting Supreme Beef into bankruptcy in the first place. What's more, he says, Supreme fully intends to be back in business one day.

Beef producers are intently watching the outcome of the appeal, and not just because they're concerned about a fellow industry operator such as Supreme Beef. Slaughterhouses know that the USDA may ultimately point the finger at them.

"None of the nation's largest meat companies publicly defended Supreme, because they feared the government would use the salmonella performance standard against them in the same manner," an article in the November issue of Meat News says. "The National Cattlemen's Beef Association, the industry's most politically powerful trade organization, remained mum on the issue of Supreme, worried that investigations might further document the fact that the original and primary source of salmonella contamination of beef is cattle."

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