By Sharon Omahen
University of Georgia
How the first case of bovine spongiform encephalopathy, also
known as “mad cow disease,” in the United States
affects the nation’s beef market depends heavily on consumer
reaction, a University of Georgia expert says.
The U.S. Department of Agriculture announced two weeks ago that a
positive case of BSE had been found in an adult Holstein cow in
Washington state.
Only 10 percent exported
“The market’s reaction will obviously be negative, but the fall
should not be as severe as in Canada,” said John McKissick, an
economist with the UGA College of Agricultural and Environmental
Sciences. He heads the UGA Center for Agribusiness and Economic
Development.
“Canada exports 50 to 60 percent of their beef, while we only
export around 10 percent,” he said. “Like Canadian consumers,
U.S. consumers need to understand that BSE is not transmitted by
eating muscle cuts of beef and that the infected tissue is
isolated from all animals in the slaughter/processing process.”
Consumer demand for beef in Canada didn’t fall after BSE was
found there last May because the consumers were aware, McKissick
said.
News reports show U.S. beef products being pulled from grocery
shelves overseas in reaction to the finding. But McKissick said
U.S. beef prices would drop only by 15 percent if exports were
closed for an extended time.
“While this is a significant hit, it’s nowhere close to the 60 to
70 percent decline Canada experienced,” he said.
“Furthermore,” he said, “we don’t expect our major trading
partners — Japan, South Korea, Canada and Mexico — to remain
closed if this proves to be an isolated case associated with the
Canadian case, as it now appears.”
Secretary assures U.S. beef is safe
U.S. Secretary of Agriculture Ann Veneman remains confident in
the safety of the nation’s beef supply. “The risk to human health
from BSE is extremely low,” she said in a news release.
BSE is a progressive neurological disease among cattle that is
always fatal. It belongs to a family of diseases known as
transmissible spongiform encephalopathies.
In the same family of illnesses is the human disease, variant
Creutzfeldt-Jakob Disease (vCJD). It’s believed to be caused by
eating neural tissue, such as brain and spinal cord, from
BSE-affected cattle.
Even without the BSE incident, McKissick had expected cattle and
retail beef prices to retreat some from their record high prices
of 2003.
“How much further prices fall will depend on how long the export
market remains closed and, more importantly, U.S. consumer
reaction,” he said.
Consumers shouldn’t rush to stock their freezers with low-priced
beef. “Retail prices won’t fall as much as live animal prices.
(They will drop) perhaps 5 to 10 percent once the shock and
uncertainty passes with consumers,” McKissick said.
His prediction depends on this staying an isolated event, he
said. Aggressive government actions to keep it from happening
again and trace any future infection to its source are factors,
too.
Cattlemen shouldn’t panic
For U.S. cattlemen, the holidays were “a real roller coaster
ride,” said Robert Stewart, a UGA Extension animal scientist.
“Now, we’re somewhat in a wait-and-see mode.”
Stewart urges farmers not to panic. “Cattlemen should hold their
ground, as we will see the market rebound in their favor,” he
said. “This is similar to the dairy buyout in 1996. The market
tumbled, but it recovered.”
He agrees that the industry’s fate lies in consumers’ hands.
“Consumers should have the confidence they need to have that the
beef they eat is safe,” he said.
