DAKOTA DUNES -- A big test awaits Beef Products Inc. this week as it struggles to recover from the uproar over its lean beef trimmings.

By Monday, U.S. schools must finalize their ground beef purchases with the U.S. Department of Agriculture, which supplies bulk commodities to districts enrolled in the National School Lunch Program.

Two months ago, in the midst of the raging "pink slime" controversy, the USDA said it would allow local schools to opt-out of accepting beef containing BPI's signature product, officially known as Lean Finely Textured Beef.

At the time, the USDA's Food and Nutrition Service also pushed back until Monday the deadline for schools to order beef for the 2012-13 year, agency spokesman Aaron Lavalle said. Schools that had already placed orders were allowed to change them, Lavalle said.

The preference for each product won't be known until after all the orders are in, according to the USDA. This year, the federal agency purchased 111.5 million pounds of ground beef this school year. Of that, 7 million of LFTB came from BPI.

Every school district in Iowa, Nebraska and South Dakota plan to continue to serve the home state product, according to state officials. But many districts in other parts of the country, including some of the largest urban areas, are dumping it.

A significant loss in school sales would deal another blow to BPI, which has seen much of its business dry up because of the social media-driven controversy.

Last week, the Dakota Dunes-based firm announced it would shutter plants in Iowa, Kansas and Texas, and eliminate more than 650 jobs.

Production continues at its flagship South Sioux City plant, but at a significantly reduced rate. The school lunch program was a key component of a $400 million, multi-year expansion of the northeast Nebraska complex that began in 2006. Construction has been halted due to the recent crisis.

BPI, which idled its plants in Waterloo, Iowa, Garden City, Kan., and Amarillo, Texas on March 26, had hoped to restart operations 60 days later. But the privately-held company acknowledged last week it is taking longer than expected to restore the company's reputation and rebuild its business.


In early March, a food blogger, after reading a news story that portrayed BPI in a negative light, launched an online petition calling for the agency to ban LFTB from school lunches. Within days, more than 200,000 signatures were collected.

Citing concerns from worried parents, many schools, including large systems in New York, Chicago and Miami, plan to take LFTB off the menu, beginning this fall. Some, including Boston, removed it immediately.

The reaction has been far different in cattle country states. In Siouxland, industry officials, politicians and residents rallied in support of BPI and its more than 1,100 employees. They fought to set the record straight about a product that has been on the market for more than two decades without a single illness or death.

At the height of the controversy, Gov. Terry Branstad and Lt. Gov. Kim Reynolds sent a letter to all 359 Iowa school districts, urging them to keep the lean beef trimmings on the menu.

Branstad and Reynolds also penned letters to their counterparts in every other state, asking them to encourage their schools to continue to serve beef containing LFTB.

In an interview with the Journal last week, Branstad described the feedback he received from Iowa school administrators as "very positive." He added the response from his fellow governors has been limited.


Made from bits of lean beef separated from fatty trimmings left over after carcasses are cut into steaks, roasts and other cuts, LFTB is mixed with fattier grinds to create ground beef that is more than 95 percent lean.

The beef purchased by the USDA contains up to 15 percent of the trimmings.

Branstad said BPI's product should play a key role in national and state efforts to fight childhood obesity. Schools now have a choice of buying bulk ground beef from the USDA with LFTB or less lean patties without it.

The USDA, which emphasizes that LFTB is a safe, all-beef product, sets nutritional standards for school meals, but local districts make the final decision on what food to serve to meet the guidelines. About 20 percent of the food is acquired from the USDA, while the rest comes directly from USDA-approved vendors.

While many schools continue to operate their own lunch programs, others contract with private firms, such as Lunchtime Solutions. The North Sioux City-based business, which serves 40 area schools, including Bishop Heelan and Dakota Valley, has bought its ground beef from four main sources, company spokesman Chris Goes said.

Goeb said local schools were "very adamant" that his company choose beef that includes LFTB.

Schools that insist on buying LFTB-free beef likely will see their costs rise. Industry officials estimate the trimmings cut the price by 3 to 10 cents per pound.

While that may not sound like much, for larger districts that purchase several hundreds of pounds per year, the savings adds up quickly, helping local districts keep lunch prices affordable.

"Pennies per meal makes a significant difference," Goeb said.