Beef market may weather mad-cow discovery

ORIGINALLY WRITTEN JERRY ENGLER
Beef producers here aren’t out of the woods yet when it comes to the economic fallout from mad cow disease, but the apocalyptic devastation cattle markets feared didn’t happen-and there’s been recovery.

Many factors remain that indicate better prosperity will still come to cattle country.

So what happened?

Scott Miesse, cattle order buyer and grazing backgrounder at Marion, said one of the best of all possible things happened.

“The American people either have been educated on the situation well enough, or they understand their beef is safe,” he said. “They are still eating the beef, still having their steaks and hamburgers. They seem to realize they aren’t getting the nervous system tissue, the brain and spine, where disease might be.

“Fat cattle dropped $20 a hundredweight (after mad cow disease was discovered in December in an animal in Washington State). But it’s come back $6 to $8 a hundredweight since it dropped, and we expect it to come back more this week.

“Calf prices were affected a little, and then they came right back,” he added.

Even though headlines list losses to the beef industry in the billions of dollars, experts with state agricultural colleges quoted under the banners of livestock groups in Kansas, Missouri and Oklahoma, are saying the drop in prices came off record highs in December.

They said expected market drops of 12 to 16 percent would still put beef prices in an “expected market range” in the $80-a-hundredweight range.

They compared that to gasoline pump prices dropping from $1.50 to $1.25 a gallon.

The U.S. Department of Agriculture said 36 nations, representing beef exports that account for 10 percent of the United States market, banned importing U.S. beef when mad cow disease (bovine spongioform encephalopathy or BSE) was found in one animal.

The USDA said the situation isn’t the same as in Canada, where 60 percent of beef is exported, or in other countries, where the disease was found in many animals.

Consumers can help

Jessica Laurin, a Marion veterinarian, cited literature that said if Americans want to help their beef industry, they can do it by each eating two ounces more of beef weekly to replace consumption lost in the export market.

That would mean an increase of 10 percent weekly over the per-capita consumption of 20 ounces a week, and 64 pounds annually,

She pointed out in the same literature that if diet-conscious people would replace four ounces of carbohydrate weekly with a 4-ounce hamburger, or an 8-ounce steak every other week, they would help the economy even more as well as be eating more healthier.

Miesse said the popularity of things such as the Adkins diet, and the growing realization on the part of consumers that beef is a healthy food, are contributing to market stability.

The livestock groups confirmed an observation brought up by Miesse, that most cattle going to the market in the United States are less than 24 months old. BSE typically only affects cattle more than 30 months old.

With cattle under 30 months of age supplying most fresh cuts of meat, there is also more upward economic pressure on the market because of tightened supply.

The USDA said the infected animal was a 6-year-old dairy cow imported from Alberta, Canada.

Protection measures

Laurin said BSE is not caused by a virus or a bacterium, as would be familiar to most consumers. Instead, it is caused by a mutated folded protein.

She said Americans are protected by a rigorous inspection system from BSE, sometimes testing as much as 47 times more than professionals would deem necessary, and by their own dietary habits.

Most people in the culture aren’t eating the nervous system while in foreign countries they might be doing so, Laurin said.

In 2003, she said, USDA tested 20,000 samples from targeted higher risk animals before BSE was found.

The United States banned ruminant-based feed products, meat and bone meal for feeding to ruminants, such as cattle, in 1997 to help halt disease spread, she said.

As a result of the BSE discovery in a “downer cow,” Laurin said downer cattle that can’t walk into a sale barn under their own power or into a slaughter plant for human consumption aren’t allowed. She said this is different than “non-ambulatory” animals that can’t walk for a mechanical reason, such as a broken leg.

Identification system coming

Laurin said visible changes to come for beef producers will be a national animal identification system traced through an ear tag with a computer chip. Also coming for beef producers and consumers is country-of-origin labeling, known by the acronym COOL.

Phase I of the identification system, premises identification, is scheduled to be completed in July after a time for comments on The National Identification Development Team Web site this month, Laurin said.

Phase II involves individual or group/lot identification for interstate and intrastate commerce, and

Phase III involves retrofitting processing plants, markets, processing plants and other industry segments with appropriate technology.

Laurin said the goal, which also is driven by perceived homeland security needs, was to have any animal in the United States trace-back identifiable within 48 hours. She believes there is pressure to accelerate this program, which is scheduled for 2006, as well as the labeling program.

Laurin said the packing house will be responsible for retrieving tags from slaughtered animals, but producers will be responsible for having a tag in the ear-probably a small, round one in the top-before “a calf leaves the farm.”

The cost for the computer-labeled tags might run $7 to $8 a head, but Laurin expects the government to realize this is a cost too high for producers to bear in the current market. She would expect at least $2 to $3 of the cost for producers to be subsidized.

Country-of-origin labeling

While consumers do much higher-risk things than eating foreign beef, Lauren said it is only fair to the American producer and government, who are following food safety rules, to have the country of origin labeled.

Some countries don’t follow the same standards of inspection and health demanded in the U.S. system, she said.

The livestock groups acknowledge that Latin American nations are watching with great interest what happens with BSE and the U.S. market for chances to expand their own exports.

Another beef-exporting nation, Australia, is consulting with Japan, a net beef-importer, to determine whether to reopen imports from the United States.

Laurin said other nations may have different vaccines and drugs labeled for use in beef cattle that are not labeled for use in the United States. This doesn’t necessarily mean they aren’t safe, “just different.”

The labeling was to begin in September, but Laurin said there have been efforts in the U.S. House of Representatives to block funding.

To meet COOL requirements, Laurin said she learned at seminars last year that producers should have a signature provided on any cattle they buy certifying their birth origin.

“As a producer, your voice is needed to encourage sale barns to get a producer’s signature as cattle are brought to the barn,” she said.

Laurin recommended using tax documents showing inventories of on-farm stock and calving records for verification.

Cattle with unknown or out-of-country origins should be tagged on the farm with a color system by category-for instance, orange for Mexican-born and green for Canadian-born-Laurin said.

Detection was a good sign

The USDA says the fact the cow with BSE was detected is a great assurance to the American consumer, and is evidence that the United States was the first nation in the world without the disease to begin systematic tests for it with special targeting of cattle with any sign of neurological disorder, cattle over 30 months old, and non-ambulatory animals.

The USDA system is backed by the Kansas Department of Agriculture so that every beef animal processed is seen either by an inspector or a veterinarian.

“What I see is an immense amount of effort to protect both the beef producer and consumer, a shining example of a safe and wholesome U.S. beef supply,” Laurin said.

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