French Fries Blocked from Asian Markets [MAD COW]
Tri-City Herald ^ | December 31, 2003 | by Anna King
tri-cityherald.com
More than $500,000 worth of french fries is being held in limbo at Northwest and Asian ports in an unexpected spin-off of the mad cow scare that is alarming one of the Mid-Columbia's biggest industries.
Tons of Columbia Basin frozen potato products that were prefried in beef tallow have been delayed as Asian governments and customers have reacted to last week's announcement that a cow slaughtered in Mabton had the disease.
At risk is part of an export market for frozen potato products that brought Northwest processors $225 million in 2002.
The news also raises the question that other export products containing beef could be affected by the bans at least 36 countries have imposed on U.S. beef because of mad cow disease.
"We have confirmed some containers have been held up going into Japan, and some containers have been turned back from the Asian markets," said Pat Boss, executive director of the Washington State Potato Commission. "They are Washington state's biggest importer of fries."
At least 60 containers have been delayed so far, Boss said, but there may be more. Each container can hold about 40,000 pounds of frozen potato products.
"China might have turned back some fries today as well because they were fried in beef tallow," Boss said Tuesday. "We are not sure yet; we just got word this morning."
As many as 10 more containers could be affected, he said.
Some of the containers of fries are being held in warehouses at Asian ports. Others are being held at Northwest ports like Seattle, Tacoma and Portland or sent back to the processors.
Boss said about 17 containers were held Monday in Seattle, then sent back to the processor. "They were not put on a ship because there was a processor concerned that they would not be allowed in (to Japan) anyway," he said.
The Port of Tacoma also reported a few containers of fries were sent back, Boss said.
Boss said Japan is allowing some containers to come into the country but they are being held in warehouses.
The concern comes because most fries are prefried in beef tallow or vegetable oil by the manufacturer before they are frozen and shipped. They are then fried again at the restaurant before being served.
Boss said there is no evidence that beef tallow can transmit mad cow disease to humans. But he said that doesn't matter if customers don't think it's safe.
"The buyers (in Asian countries) are reporting that they want to move away from those products," Boss said. "I really do think there is a level of hysteria building because of mad cow, and unfortunately other products are being lumped in."
During a government news conference Saturday, Steve Sundlof, director of the FDA's Center for Veterinary Medicine, said that beef tallow does not transmit the disease because the disease-causing organism is separated from the fat in the rendering process.
Processors and growers in the Northwest that depend heavily on Japan's large export market are very concerned.
The other largest export markets for fries include Mexico, China, Korea and Taiwan.
Washington also is more dependent upon exports than other large potato-growing states, Boss said.
All three major processing operations in the Columbia Basin -- Lamb Weston, McCain and Simplot -- are likely to be affected, Boss said, because they all produce potato products fried in beef tallow.
Beef tallow-fried potatoes probably account for about 15 percent of the three large Columbia Basin processors' product, he said.
"The whole industry worldwide does use some beef tallow," said Lamb Weston's vice president, Rodney Jones. "We use various oils, and it's really up to the customer's specifications."
The processors could eliminate beef tallow because they are already custom-processing potatoes without it for large corporations like Burger King and McDonald's, he said.
Most products fried in beef tallow are exported, Boss said, while vegetable oil is used domestically by most restaurants. But he said some customers still prefer the taste of traditional beef tallow-fried fries.
Most of the potatoes bound for Asia are shoestring fries for restaurants, but there also might be frozen hash browns or potato tots in the shipments, Boss said.
U.S. processors and growers are concerned that other countries could take advantage of the delays to move into the highly competitive overseas markets.
"We are concerned if this becomes a bigger issue that we don't lose business to Australia and New Zealand," Boss said.
Because of the competitive and secretive nature of the french fry industry, few potato industry executives, port officials or shipping companies were willing to comment.
Jones repeatedly declined to talk about the export delays in several interviews since Monday.
Boss guessed the potato industry is in for at least a month of disruption. "I think there will be more containers that will be held up," he said.
Currently the major processors and the Washington State Potato Commission, Oregon Potato Commission, Idaho Potato Commission and the United States Potato Board are scrambling to shore up relations with Japanese government officials and other Asian customers.
Trade meetings are expected to be conducted in Seattle as early as Monday, Boss said. He said U.S. officials will emphasize that there are alternatives like using vegetable oil.
Meanwhile, it's not clear who will pay for the extra transportation and storage costs while the fries are held up. And there are concerns what the issue will mean for the next growing season.
Ellie Charvet, a Columbia Basin potato grower for P.J. Taggares, said, "It always trickles down to the grower. Growers are the ones that will probably pay for it in the end."
Taggares sells its potatoes to McCain processors through yearly contracts that usually are signed in February or March.
If there are any long-term delays, the reduced demand for U.S. fries could show up on 2004 growing contracts, Charvet said.
The trade barriers also could have an effect on open potatoes, or uncontracted potatoes, Charvet said. "If sales are slowing down, they are not going to want to buy any more than they have already contracted."
Export companies also are hurting because of the mad cow restrictions and concerns.
"There has been a significant drop-off of refrigerated containers of all sorts because of mad cow," said Jonathan Pan, a Seattle-based manager for Yangming America, an international container-shipping company. "I've been in the industry for 10 years and this has been the worst situation so far."
Yangming America transports mostly refrigerated containers that are used for perishable products. He said those containers bring four times the revenue that regular containers do, "so our industry is affected tremendously by the slowdown of containers for beef and other products."
Other products that might experience delays could include animal hides, powdered milk and pet food, he said. |
