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Tyson: 'Pink Slime' Backlash May Cut Beef Supply, Drive Up Prices

By The Associated Press 03/27/12 08:10 PM ET AP

-- Tyson Foods Inc. executives say the negative publicity over the filler known as "pink slime" has hurt demand and will reduce beef supply in the long term.

A number of consumers, schools and grocers announced in recent weeks that they are shunning products that contain the common, low-cost filler, described by the meat industry as "lean, finely textured beef."

"The ground beef issue caught a lot of publicity and put ... a fair amount of pressure on ground beef consumption," James Lochner, chief operating officer of Tyson told investors at a conference Tuesday.

Tyson's top executives said they expect demand to recover quickly, but the market will have to adjust. They estimate there will be a 2 percent to 3 percent reduction in supply. Shrinking supplies traditionally drive up costs for consumers.

The additive is made from bits of leftover meat that are heated, spun to remove the fat, compressed into blocks and exposed to ammonia to kill bacteria. Producers often mix the filler into fattier meat to produce an overall leaner product and reduce their costs.

Federal regulators say the product meets food safety standards, but critics say it's an unappetizing example of industrialized food production.

The filler has been used for years, but concern about it has been on the upswing recently. Celebrity chef Jamie Oliver has spoken out against it, and fast-food chain McDonald's Corp. decided last year to stop putting ammonia-treated meat in its products.

The U.S. Department of Agriculture recently decided that school districts may opt to stop using government meat that contains it, which brought more attention to the issue. Major grocery chains such as Kroger Co., Safeway Inc. and Food Lion announced last week that they'll stop carrying products that contain it.

The company that makes the filler, Beef Products Inc., suspended operations Monday at all but one of the plants that makes the filler, saying the public uproar over the product has cost the company business.

Tyson says the trend is unfortunate because it was a safe, wholesome, nutritious product.

The company, based in Springdale, Ark., is one of the world's largest processors and marketers of chicken, beef and pork.

Shares of Tyson rose 3 cents to close at $19.51.

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Filed by Joe Satran  |