Beef company closing 3 plants, blaming 'pink slime' controversy

DAKOTA DUNES, S.D. -- Saying it's proving more difficult than anticipated to restore public confidence in its lean beef trimmings, Beef Products Inc. announced plans Monday to shutter plants in Iowa, Kansas and Texas and eliminate more than 600 jobs.

Production at BPI's South Sioux City factory, the only place still making the trimmings, will continue at a reduced capacity.

"We are making significant progress in setting the record straight and are encouraged by recent market research, which shows that consumers are very interested in consuming high quality, safe lean ground beef -- which is exactly what we have done for the last 30 years," BPI said in a statement.

"We will continue communicating the benefits of BPI's lean beef, but that process is much more difficult than the campaign to spread misinformation that brought us to this point."

The trimmings, known officially as Lean Finely Textured Beef, are made from fatty scraps left over after cattle carcasses are cut into steaks or roasts. The bits of lean meat are heated and separated from the fat with a centrifuge before being treated with small amounts of ammonium hydroxide gas to kill E. coli and other potentially deadly pathogens.

BPI's product, which was used in as much as 70 percent of the nation's ground beef at its peak, came under assault in early March after a flurry of national news in March that portrayed the product as unappetizing and potentially unsafe. Activists labeled LFTB as "pink slime," a term that caught fire in social media circles.

A consumer backlash pushed major retail chains to stop sales of LFTB, drying up much of BPI's sales. BPI on March 26 suspended production at three of its four plants where the trimmings are produced -- in Waterloo, Iowa, Amarillo, Texas, and Garden City, Kan. At the time, the company issued the workers what turned out to be a 60-day termination notice.

"While we had hoped to be able to resume operation at those plants, that is not going to be possible in the immediate future and the temporary suspension of operations will in fact result in the elimination of those jobs," effective May 25, the company said in Monday's statement.

Sen. Bill Dotzler, D-Waterloo, whose Senate district includes the BPI processing plant, said he knows from his time at John Deere what it's like to lose a job.

“It's a tough time,” he said. “It's especially tough because it's something that came about because of social media.”

Dotzler said the workers could depend on the state's Workforce Development response teams to help them adjust and encouraged the workers to take advantage of all the services the state has to offer. “Lives do go forward,” he said.

Gov. Terry Branstad said about 200 workers in Waterloo will soon lose their jobs because "some media on the coasts decided to unfairly and viciously smear the product they so proudly produced."

"Unfortunately, we have learned that what a ruinous smear campaign accomplishes overnight can take years to correct," Branstad said in a statement.

The Iowa governor had rallied support for BPI and waged a public campaign to set the record straight about the product. He coordinated a March 29 tour of BPI's plant, where he was joined by Texas Gov. Rick Perry and Kansas Gov. Sam Brownback. The politicians later tasted burgers containing LFTB at a news conference where local backers unveiled T-shirts with a new slogan, "Dude, It's Beef."

BPI and its meat industry allies also launched a website -- beefisbeef.com -- to try to refute myths and misconceptions about its product.

State Rep. Jeremy Taylor, R-Sioux City, said BPI has a long safety record that people didn't consider.

“If there was any silver lining, it was the grassroots support that we saw in my community,” he said. “They served, what, 30,000 burgers at the picnic? I know the community still supports them.”

Taylor was referring to a March 31 picnic at the Tyson Events Center parking lot in Sioux City that attracted an estimated 15,000 people.

So far, the campaign has failed to sway most large supermarket chains, which have kept LFTB out of their coolers and freezers.

In the first week of April, BPI had endorsed voluntary labeling of ground beef that contains LFTB. The move came after some major meat processors, including Tyson Foods, had asked for permission to affix the labels.

In a conference call Monday with reporters, Tyson chief operating officer Jim Lochner said the company has received limited orders for labeled ground beef with LFTB.

BPI is one of metro Sioux City's largest employers, with more than 400 employees. Hours at the South Sioux City plant have been reduced to 32 per week, the minimum number permitted under the union contract for the hourly production workers.

In its statement, BPI said it intends to continue operations and expand production at South Sioux City "as the market activity allows."

Journal Des Moines Bureau Chief Mike Wiser contributed to this report.