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(e) Reference is made to the grading of poultry without inspection for wholesomeness on page 9 of the report. In discussing the problem of grading and inspection of poultry it would be well to treat it from two spearate types of processing-"dressed" and "ready-to-cook".

Dressed poultry, as such, cannot be inspected for wholesomeness because the viscera is intact whereas a wholesomeness determination must be based largely on the appearance of internal organs. Thus, grading service is the only service that can be performed with respect to dressed poultry. Even though the trends in poultry processing are in the direction of complete evisceration immediately following slaughter, today more than half of the poultry marketed for food is sold in wholesale distribution as dressed poultry. The Department has graded this product in conformance with USDA standards and grades for more than 20 years. These standards and grades have always provided that poultry with external evidence of disease or other conditions which may render them unfit for food shall not be graded. Serious consideration must be given to the problem before service can be arbitrarily discontinued when such a large percentage of poultry is marketed in dressed form.

The statements made in the first paragraph on page 9 of the report with respect to grading evidently covers both "dressed" and "ready-to-cook" poultry. The quantities that have been graded were relatively small in proportion to the amount of the product sold for food. Of the amount graded a still smaller proportion has been individually grade marked. In the 18 months' period from January 1, 1950, to June 30, 1951, during which "ready-to-cook" poultry was permitted to be graded without official inspection for wholesomeness, only four poultry establishments utilized this service and the bulk of the product so graded was marketed intrastate. This provision has been changed. Under the currently operative poultry grading and inspection regulations "ready-tocook" poultry may be graded only if it has been previously inspected by Federal inspectors or by governmentally employed inspectors of an approved State, county, or municipal inspection system. The basis for approving such systems is essentially the same as that with respect to meat grading. At the present time no "ready-to-cook" poultry is graded unless it has been previously inspected for wholesomeness by Federal Inspectors. While the regulations provide for the grading of "ready-to-cook" poultry inspected under other approved inspection systems, no product has been graded under this provision to date.

(f) We wish to comment on the third paragraph of page 10 of the report which reads:

"The Army is especially careful in the inspection of poultry for disease, etc., because the various State, local, and private arrangements made by PMA for poultry inspection and grading have caused officials of the Veterinary Corps to question the adequacy of controls maintained over sanitation and disease in poultry houses."

At the time this report was issued no State, local, or private arrangements were in effect for the conduct of the poultry inspection service of PMA. While the regulations which went into effect July 1, 1951, provide for the conduct of inspection service under cooperative Federal-State arrangements involving the use of State employees under Federal supervision as poultry inspectors, to date only federally employed inspectors have been used in performing poultry inspection service. The Army accepts and utilizes the poultry inspection service of PMA. As a matter of fact, for a number of years Army purchase specifications for "ready-to-cook" poultry have required that poultry be eviscerated under the supervision of the poultry inspection service of PMA.

(g) Certain information on page 21 of the report is now incorrect because it is out of date.

(h) We would like to comment on your reported general statement on page 22 that savings could be affected through a consolidation of field offices and administrative services. PMA is continually moving toward such a goal whenever action can be taken without adversely affecting program objectives. We would like to point out that consolidation does not necessarily result in savings. In some instances consolidation actually becomes more expensive. The USDA has recently moved to consolidate county and State offices. As a result, 936 offices in counties have been consolidated and offices in 14 States are in the process of moving.

Over the past 3 years PMA has been continually working toward the consolidation of all PMA activities in each of the 5 regional office cities, that is Atlanta, Chicago, Dallas, San Francisco, and New York. In Atlanta the consolidation

is complete. In the other four cities 75 to 90 percent of the consolidation has been effected. Also, within PMA the livestock branch has had a continuing movement underway to consolidate all of that branch's activities under one roof in every city where such is possible. This move is practically complete. The poultry branch is also working toward consolidating their field offices. Consolidation cannot be effected between many branches because their offices must be located near the point where their work is performed. For instance, in Chicago the livestock branch must be near the livestock yards, whereas, the dairy and poultry branches must be near the dairy and poultry markets and many miles separate these two markets, therefore, consolidation in such instances is not practical.

(i) On page 23, the report indicates that meat inspectors might be selected and trained to perform small meat-grading assignments at their station in order to save the grader's time and travel cost involved in reaching the station. This problem has been given thorough consideration in times past and the suggested solution is considered impractical from several standpoints. The principal reason is that meat inspectors are not qualified to do meat grading. Among the minimum qualifications required of a meat grader is at least 4 years' experience in the grading of meats on a wholesale basis. (The 60-day course in general food inspection and grading work used by the Army does not meet the minimum requirements for this work which we regard as essential.) Despite the aptitude of some of our meat inspectors for grading assignments, we feel that the time necessary to qualify a meat inspector for this particular work would be much more expensive than paying the travel time of a meat grader to the particular point. Even if time were taken to train a meat inspector to do meat grading, other difficulties would make this arrangement impractical. The meat-grading service requires very special and direct supervision which cannot be supplied by the meat inspection division. Consequently the meat inspector doing meat-grading work would be attempting to serve two different supervisors. Also, a meat inspector, trained for meat-grading work and located in a position where he might do meat grading, is subject to be transferred at any time. If a regular meat grader is stationed at the new location, the value of his special training would be largely lost. Under normal conditions, that is, in the absence of price ceilings and mandatory grading, there are comparatively few locations where meat inspection is conducted at any considerable distance from the point where a meat grader is stationed.

(j) We regret that the report did not develop further the statement on page 24 to the effect that there is a lack of confidence in the poultry grading and inspection services by public health and consumer groups. Following a recent meeting with a group of public-health officials, the poultry branch has formed an advisory group consisting of 6 public-health officials and 6 industry representatives to discuss and advise on mutual problems. One meeting of this advisory group has already been held and indications are that this cooperative approach will be very helpful in developing a high degree of confidence in these programs. The rapid rate of increase in the use of these two services seems to indicate they have already gained a high degree of acceptance. Such acceptance, it is true, is on the part of commercial poultry interests. However, these interests would not be likely to incure the added cost of these services except to meet consumer demand.

(k) We wish to comment about the label used to identify "dressed" poultry which has been processed under USDA sanitary standards. This is covered in the last paragraph on page 24 of the report. The Department's regulations governing the grading and inspection of poultry require that poultry which bears United States grade marks or United States inspection marks shall have been processed in accordance with prescribed sanitary standards during all stages of processing. Some processors perform all processing functions whereas others prepare only "dressed" poultry. So that such "dressed" poultry may move into plants for further processing under Federal supervision, provision is made for its certification of having been processed under USDA sanitary standards. It is in connection with this phase of the program that the label is used which reads "Processed under USDA Sanitary Standards-Not USDA Graded for Quality or USDA Inspected for Wholesomeness." The label is intended solely for identification purposes and is applied only to bulk packages or shipping containers of "dressed" poultry. Individual birds or consumer packages are never labeled with this mark. It is highly improbable that the consumer can ever be misled by this label since she will never see it. The Department currently is engaged in further study of poultry grading and inspection.

EXHIBIT No. 3

UNITED STATES DEPARTMENT OF AGRICULTURE

AGRICULTURAL MARKETING SERVICE

WASHINGTON 25, D. C.

REGULATIONS GOVERNING THE GRADING AND INSPECTION OF POUL
TRY AND EDIBLE PRODUCTS THEREOF AND UNITED STATES
CLASSES, STANDARDS, AND GRADES WITH RESPECT THERETO
[Reprinted from the Federal Register of November 3, 1953; March 26, April 22, Feb. 18,
July 8, July 22, and October 14, 1954; and February 26, 1955]
Effective March 1, 1955.

By virtue of the authority (18 F. R. 4839) vested in me by the Secretary of Agriculture and in accordance with the revised Federal Register regulations, the format of the regulations (7 CFR Part 70) governing the grading and inspection of poultry and edible products thereof, and United States classes, standards, and grades with respect thereto, which are currently operative pursuant to the applicable provisions of the Agricultural Marketing Act of 1946 (60 Stat. 1087; 7 U. S. C. 1621 et seq.), is recodified as hereinafter set forth.

The recasting of the format due to such recodification is not intended, nor shall it be deemed, to make any substantive change in the regulations.

A notice of a proposed amendment to the regulations governing the grading and inspection of poultry and edible products thereof and United States classes, standards, and grades with respect thereto (7 CFR Part 70) was published in the FEDERAL REGISTER on December 10, 1954 (19 F. R. 8218). The amendment hereinafter promulgated is pursuant to authority contained in the Agricultural Marketing Act of 1946 (60 Stat. 1087; 7 U. S. C. 1621 et seq.).

The amendment makes changes in the standards of quality for ready-to-cook poultry applicable primarily to B and C qualities. In addition, minor changes are made in the official identification, new provisions are added in the sanitary and operating requirements with respect to chilling and freezing of products, drainage of poultry prior to packaging, and the lining of containers. The amendment is essentially the same as was published in the aforesaid notice with the exception that action is being reserved on proposed terms and descriptions for chicken parts which were set forth in § 70.2 of the proposed amendment. This matter needs further consideration prior to issuance.

After consideration of all relevant material presented, the amendment hereinafter set forth is promulgated to become effective March 1, 1955.

The regulations were issued July 1, 1951; amended several times in 1952-53; recodified in 1953; and amended in 1954 and again on March 1, 1955. The complete regulations with all amendments to date are as follows:

PART 70-GRADING AND INSPECTION OF POULTRY AND EDIBLE PRODUCTS THEREOF; AND UNITED STATES CLASSES, STANDARDS, AND GRADES WITH RESPECT THERETO

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PART 70-GRADING AND INSPECTION OF POULTRY AND EDIBLE PRODUCTS THEREOF; AND UNITED STATES CLASSES, STANDARDS, and GRADES WITH RESPECT THERETO— Continued

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PART 70-GRADING AND INSPECTION OF POULTRY AND EDIBLE PRODUCTS THEREOF; AND UNITED STATES CLASSES, STANDARDS, AND GRADES WITH RESPECT THERETOContinued

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