The recent loss of more than 700 jobs following controversy over a beef product is a lesson to food companies about the impact of social media, Agriculture Secretary Thomas Vilsack said Thursday.
“I think it's a good wake-up call for food companies generally, that when there is an effort that uses the social media effectively, there has to be a rapid and specific and quick and comprehensive response,” Vilsack said during a conference call with reporters.
Vilsack also talked about advances in the biofuels industry, saying that the petroleum industry now sees biofuels as viable competition and is working politically to slow down the industry's growth.
Beef Products Inc. of South Sioux City, Neb., closed plants in Iowa, Kansas and Texas and cut jobs at its headquarters after food manufacturers, restaurants and retailers stopped buying a product known as lean, finely textured beef that was labeled “pink slime” by online chefs and other Internet users earlier this year.
In a letter last month to Vilsack, 30 members of Congress asked him what the USDA was doing to counter what they said was “rampant and intentional mischaracterization and misinformation” about the beef product.
Vilsack said Thursday that the USDA responded to the misinformation and continues to make it clear that the beef product is safe and can reduce the fat content and often the price of beef dishes sold through supermarkets and used by the USDA's school lunch program.
“We continue to promote the safety of that product,” he said, and work with local school districts as they place orders for food that they use in school lunches.
At the same time, he said, “we have to be responsive to what the consumer demands. ... We can't compel or force people to purchase a particular product.”
In March, the USDA said that schools in the National School Lunch Program could decide not to buy products containing the finely textured beef next fall. A web site had gathered more than 225,000 signatures on an online petition calling for its removal from school lunch menus.
The USDA is receiving lunch program orders for the coming school year, Vilsack said Thursday.
“We're confident there will still be the (finely textured beef) product purchased,” he said.
The beef processing companies that have cut back on production and jobs are responding to the drop in demand, Vilsack said.
He said food companies should be alert and respond quickly and effectively to online criticism, even when it is unfounded.
“Hopefully that's a lesson that will be learned,” he said.
In discussing the biofuels industry's potential, Vilsack said the Novozymes enzyme plant near Blair, Neb., which officially opened this week, is a prime example.
Adam Monroe, president of Novozymes' North American operation, took part in the conference call and said the company's research, supported by federal grants, reduced the cost of enzymes used in producing ethanol by 90 percent. Novozymes received a $28 million federal income tax credit toward the $200 million Blair plant, speeding up construction and making the plant more effective and expandable in the future, he said.
Vilsack said a congressional committee's recent vote against the use of ethanol by the U.S. Navy was an example of the oil industry's use of political power to try to block a competing fuel industry.
Not using biofuels would place the U.S. military at a disadvantage and make it rely on imported fuel supplies, he said. Efforts to weaken federal renewable fuels standards also are influenced by oil industry interests, he said.
“It's beyond me,” Vilsack said, “why we wouldn't help this (biofuels) industry,” since it creates jobs, reduces fuel costs and makes the country less reliant on foreign oil. “It is just astounding that people don't understand that.”
He said Congress should expand the use of tax credits for advanced energy manufacturing and retain the renewable fuels standards that encourage development of biofuels.
Carlton Carroll, a spokesman for the American Petroleum Institute, said the group supports all forms of energy, including biofuels and other renewable sources. The oil industry is the largest consumer of biofuels through its blending of ethanol into gasoline, he said.
But he said the oil industry wants Congress to revisit the renewable fuels standards, which mandate increased production of ethanol each year. The industry is reaching a “blend wall” already, mixing almost all of its gasoline with 10 percent ethanol, and he said recent tests indicate that 15 percent ethanol blends can damage engines in some cars newer than 2001 models.
Ethanol manufacturers dispute the results of those tests, but Carroll said even allowing 15 percent blends would buy only about a year's time before the renewable fuels standards would again become impossible to follow.
“We're going to encourage Congress to revisit the renewable fuels standards to make sure they meet the demands of the cars and trucks that are designed and built” to run on gasoline blended with 10 percent ethanol, he said.
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