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October 22, 2007 - Preparing for the Unexpected

I know it is difficult to be prepared for the unexpected when you have never encountered the unexpected before. But it happens a great deal and in agriculture we’ve had more than our share; the most prominent one in this decade being the discovery of the case of Mad Cow Disease in Canada. It sent the beef industry into turmoil from the ranch to the feedlot and all the way to Wall Street.

Earlier this month I encountered another industry that was slammed by the unexpected, the pet food industry. We probably don’t think of the pet food industry as being an agricultural industry, but all of its ingredients come from farms and ranches.

I was in Washington, D.C. several days ago to address the 50th anniversary of the Pet Food Institute and a good part of their convention program dealt with the unexpected this year. They referred to it as 2007 - The Year of the Recall. Back in March, the industry was hit with the discovery there was contamination in pet food. Media picked up the story quickly and before facts had been established, we were seeing headlines in print and stories on TV that thousands of pets were dying across America because of contaminated pet food. Suddenly the pet food industry was in the unwanted media spotlight suggesting carelessness on the part of the industry.

The industry reacted quickly and a lot of people went to work to discover the source of contamination. They soon found the problem originated in wheat gluten, a pet food ingredient imported from China, . One member of the Institute commented to me “A year ago I hadn’t heard of melamine, didn’t know how to spell it and I still don’t know if it should be pronounced melamine or ‘melameen’. But whatever it is, it was a public relations nightmare.”

It had a tremendous impact on an industry that sells 30-million pounds of pet food and rings up $15-billion in sales every year. The recall of many different brand-name pet foods over a period of several weeks left the impression the recall was huge, but when the incident left the headlines, it was determined it amounted to 1/3 of 1% of the annual production of pet food. In answer to the question, “Why do we import pet food wheat gluten from China?”, I was told that we only produce 25% of the pet food industry’s needs in this country. It seems to me there is an opportunity there for U.S. wheat growers.

I do commend the Pet Food Institute for its quick positive action and the plan it has put in place to deal with any unexpected events in the future. There is a lesson there for all of us.

My thoughts on Samuelson Sez.