Beef Products Inc. Throws in the Towel

Company to close three plants over lean finely textured beef controversy, 650 jobs to be lost. Statement does say research shows consumers may be coming around.

Published on: May 8, 2012

Beef Products Inc., the company that's taken the biggest hit over the "pink slime" controversy, is closing processing plants in three states. About 650 jobs will be lost by the move when the plants close May 25. The three plants are in Amarillo, Texas; Garden City, Kan.; and Waterloo, Iowa. A plant in South Sioux City, Neb., will stay open but run at reduced capacity.

The company is blaming unfounded attacks on lean finely textured beef for the closures. Operations at all three plants were suspended in March when the controversy flared. Several customers - including major fast food chains and many retailers - moved to ban the use of the product in ground beef. USDA had also caved to pressure over the issue, allowing schools to opt out of having the beef filler in its ground beef, which hit demand.

Social media storm over pink slime has forced the closure of three Beef Products Inc., plants.
Social media storm over 'pink slime' has forced the closure of three Beef Products Inc., plants.

In its statement BPI notes that it is making "significant progress in setting the recod straight and [is] encouraged by recent market research which shows that consumers are very interested inconsuming high quality, safe lean ground beef" which is what the company has provided for 30 years. "We continue to stand by our lean beef as 100% wholesome, safe and nutritious, and we will continue to defend Beef Products, Inc., against the mischaracterizations and irresponsible misrepresentations that led us to take these actions."

Hy-Vee, and Iowa based chain, had initially targeted an end to LFTB use, but backed down under pressure from Gov. Terry Branstad, and others.

However, the lack of demand for the product, which BPI has been marketing since the early 1990s, has forced the plant closures.

In a press statement concerning the closures, Iowa Governor Branstad says "this is a sad day for the state of Iowa. The fact that a false, misleading smear campaign can destroy a company's reputation overnight should disturb us all. My office will never stop fighting for every single job in this state, and I continue to hope that as consumers learn about this safe, health and lean product, they will understand what a great product lean, finely textured beef truly is."

The social media onslaught over pink slime caught the beef processing industry off guard. The fallout of softer beef prices came as consumer demand slipped over the controversy. While prices have recovered somewhat, the market remains soft in the wake of the problem.

Branstad adds: "Today [BPI workers] go home to their families and will soon be without a job, all because some media on the coats decided to unfairly and viciously smear the product they so proudly produced."