An employee works on June 16, 2011, on the frozen ground beef production line at at the French company SEB (Societe Economique Bragarde) in Saint-Dizier, eastern France. (Photo credit should read FRANCOIS NASCIMBENI/AFP/Getty Images)
Minneapolis-based Cargill, which produces 1.5 billion pounds of ground beef annually and is the nation's largest producer, saw 80% of its customers for finely textured beef disappear after the controversy erupted in March, company spokesman Mike Martin said. And AFA Foods of King Prussia, Pa., sought bankruptcy protection.
The controversy over the filler, which is made of fatty bits of beef that are heated and treated with ammonia hydroxide to kill bacteria, showed how a simple nickname could change an entire industry. It had been used within the industry for about a decade before the public became broadly aware of it last spring.
Soon afterward, McDonald's and other fast-food companies discontinued their use of it. Major supermarket chains including Kroger and Stop & Shop vowed to stop selling beef with the low-cost filler. West Des Moines, Iowa-based Hy-Vee initially said it would stop selling beef with the product in its 235 stores, but then reversed course, saying it would carry beef with the product but identify it so consumers had a choice.
Beef Products, the primary manufacturer of the filler, closed three of its four processing facilities, laying off 650 workers. A Bloomberg analysis of data from the U.S. Department of Agriculture found ground beef sales fell 11% in March to 37.7 million pounds, the lowest amount in March in 10 years.
The beef industry has been fighting back, trying to educate consumers that the decades-old process is safe and economical, and that it meets federal food-safety standards. "There's no legitimate reason why it shouldn't be part of ground beef," said Martin, adding that it's not a filler or an additive, but beef.
Others have benefited from the industry's setback. Dave Carter, the executive director of the National Bison Association, said demand for fresh ground bison pushed the average price to $5.06 a pound in April, up $1.75 in two years.
The controversy has also widened the customer pool for meat shops that grind their own beef. "It's only through unfortunate things like this that we have an opportunity to hit home with a much larger audience," said Juliana Lyman, the general manager of Savenor's Butcher & Market in Boston and Cambridge, Mass.
Cleaver's Market in Sioux Falls, S.D., saw a 25% increase in its in-house ground beef sales, manager Tyler Honke said. Sioux Falls resident Laura Goodhope is a regular at Cleaver's. She says the meat is fresh and, with beef ground on site, she doesn't have to worry about what's in it: "I think the quality is immeasurably better."
(Copyright © 2012 USA TODAY)