Cargill, Tyson Don’t Plan Plant Closures due to ‘Pink Slime’

April 3 (Bloomberg) -- Bloomberg's Sheila Dharmarajan reports on the economic impact of pink slime and how it reaches into other industries besides beef. She speaks on Bloomberg Television's "Inside Track." (Source: Bloomberg)

Cargill Inc. and Tyson Foods Inc., (TSN) the two largest U.S. beef processors, said they don’t plan to close plants because of lower demand for finely textured beef, also called “pink slime” by critics.

Cargill doesn’t plan closures or job cuts as it scales back output of finely textured beef at two plants in Texas, one in Nebraska and one in Kansas, Mike Martin, a spokesman for the Minneapolis-based company, said today in an e-mailed statement. The output reduction comes after some retailers stopped using the product in the ground beef they sell, the company said.

Celebrity chef Jamie Oliver is among food activists who have criticized the use of what they dubbed “pink slime,” a filler produced by treating finely ground beef scraps with ammonia hydroxide to kill pathogens. The drop in demand led AFA Foods, a ground-beef processor owned by Yucaipa Cos., to seek bankruptcy court protection today. Beef Products Inc. last week temporarily suspended production at three plants.

“The sale of beef trimmings is just a part of each of our beef processing plants’ production and we do not expect this issue to result in a plant closing,” Gary Mickelson, a spokesman for Springdale, Arkansas-based Tyson, said today in an e-mail.

JBS USA, a unit of JBS SA (JBSS3), will “adjust our production practices” if consumer preferences result in less demand, spokeswoman Margaret McDonald said in an e-mail today. JBS sells the trimmings used to make the contested product.

To contact the reporter on this story: Shruti Singh in Chicago at ssingh28@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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