The meat industry has been in the news
lately mostly for the newest acquisition actions and rising
prices. However, the industry has been increasing its
innovation investments related to products, processes,
practices, and safety.
Enacted in 1981, the Federal Research and
Development (R&D) Tax Credit allows a credit of up to 13
percent of eligible spending for new and improved products and
processes. Qualified research must meet the following four
With the ever growing population it is becoming more and more important to improve techniques for food production while maintaining high quality product. Listed below are the R&D investments made by some of the largest meat processing companies. As you can see, meat processors are putting forth a lot of investment into research and development so they can have the best product available on the market.
Weber Power Control, a meat processing
robotics company in November, 2013 showcased a new machine
that scans the meat that is currently being processed in order
to measure the exact density of the meat and how much fat is
on the bone, so to speak. It does this by shooting x-rays at
the product and then makes the necessary cuts in order to get
the most meat product as possible. The machine also has a user
friendly touch screen interface for controlling operations, as
well as a relatively compact size to decrease space that it
would take up, while increasing productivity.
Researchers at Penn State developed a transparent edible film that is sprayed on the meat products during the final stages of processing, and kills any harmful bacteria that is present. This film could revolutionize the packaging process in the modern meat industry, and keep consumers from getting sick. Research results have been conclusive that the film does provide a barrier against microbials. Further testing needs be done in order to improve the longevity of the film.
The University of Minnesota as a leader in the agriculture science research, has been working on bettering the nutrition for their cattle in order to produce the best quality of beef possible. Research also includes improving the pre/post weaning process in order to increase beef quality as well. Research is also done on the selection process of heifers in order to capitalize on traits that are high in quality for beef reproduction.
Food science professor at Kansas State, James Marsden, has been working on and developing aids that can eliminate E.coli from meat products. The FDA has a zero tolerance for seven strains of E.coli that are all very hard to kill. But one thing that helps is the use of these aids that Marsden in working on. These aids cannot change the taste of appearance of the product and cannot negatively impact food safety or public health.
Researchers at the University of Arkansas,
are studying the methods currently used and developmental
methods of Salmonella control in the meat processing industry.
Salmonella infestation can either create a colony of
Salmonella in your gastrointestinal tract or can spread to
your body's hot tissues which can result in life threatening
septicemia and fever. Luckily the most common form of
salmonella is the first result and can be treated. Researchers
at the University of Arkansas are exploring the effectiveness
of the currently used methods as well as searching for new and
Meat processing companies like Hormel are
beginning to buy companies that will allow them to expand
their operations into other meat substitute markets. Hormel
acquired CytoSport Holdings, Inc. the maker of Muscle Milk and
a global leader in Protein workout powders. By the end of the
fiscal year in 2013, sales of products with protein on their
labels rose 50%, spiking a craze of companies trying to add
protein products to their lines. In 2013 Hormel also purchased
Skippy peanut butter for $700 million from Unilever. Post
Holdings, Inc. in April of 2014, purchased Michael Foods
Group, a producer of dairy and eggs products for $2.5 Billion
in an effort to expand its protein products line.
Legislation is pending in Congress that
will ban the use of the chemical bisphenol a (BPA) in all food
packaging materials. BPA is the essential building block for
polycarbonate plastic and use in the epoxy resin linings of
metal food and beverage cans. Some research has shown that
consumption of BPA that has been leaked into the foods that
are contained in BPA products may cause some effects on the
brain, behavior and prostate gland of fetuses, infants, and
children. The FDA recommends avoiding any food packaged with
the use of BPA. More and more BPA-Free products are coming out
to help combat this still controversial issue.
Improvements in the process of meat product
tracking from starting at slaughtering and ending with
consumer consumption at the supermarket or restaurant are
constantly improving. It is very important to keep track of
the animal slaughtering in order to avoid meat product related
illnesses such as Mad Cow Disease. Even though there has not
been a reported case of mad cow disease reported since 2006,
it is always a looming threat to the population unless
constant tracking of beef is not maintaned. The same can be
applied to Salmonella for chicken and to trichinosis, which is
a parasite caused by eating raw or uncooked pork. Innovations
in this field are important so that the people consuming meat
can avoid these diseases and parasites.
In general, workers in meat processing
facilities are at 50% higher risk to get injured or sick at
work, then if they worked in another industry. The FDA as well
as OSHA requires certain procedures in order to keep
operations safe and sanitary. However, there are mishaps and
slip-ups on the procedures and a reported 28 fatalities and
227 injuries were reported in 2012 by the US Department of
Labor's Occupational Safety and Health Administration's
(OSHA). The American Meat Institute reports that since 1990
illness and injury rates in the meat industry are down 80%.
Meat packaging plants since 1992, when the data began to be
recorded, have always had the highest injury and illness
rates. As of 2012, the incidents of sick and injured workers
at packaging plants are 8.7 workers out of every 100 workers.
This means that there is a major market need for products and
resources that enhance worker safety and protect the process
from employee illnesses.
Roughly 1 out of every 6 Americans will get
sick this year from a foodborne illness, contracted from a
tainted food or beverage. By using robots instead of people on
the food processing line, not only does it cut costs, but it
also allows companies to avoid the possibility for a worker to
get sick, not follow standards, cross-contaminate, and
mislabel the products. If a company has to recall a product
due to cross-contamination or mislabeling a product, it can
cost them millions or even billions of dollars in lost revenue
and possible lawsuits from consumers that got sick from
consuming the mishandled product. Industry robot use can also
increase yield due to increased efficiency. Over the past 10
years, the CDC reports that there has been a reduction in
illness caused by food borne pathogens by 20%. This is
believed to be due to the increased use of robots in the food
processing industry. Fanuc Robotics specializes in making
robots that can be programmed to make cuts that would be
difficult for a human to perform quickly, but easy to repeat
quickly with a robotic arm. Click
here to see an example of an active robot.
The meat processing industry has seen many changes in the last several decades, in order to cope with the growing population, food related illnesses, employee safety, and efficiency. More changes can be made and are being made in order to deal with these stresses. The Research and Development Tax Credit is available to those make those innovative changes.
Charles R Goulding Attorney/CPA, is the President of R&D Tax Savers.
Raymond Kumar is a CPA and Tax Manager with R&D Tax Savers.
Patrick Zalesky is a Tax Analyst with R&D Tax Savers.
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