December 25, 2003

 

BSE Case Could Significantly Affect U.S. Beef Industry

The first case of bovine spongiform encephalopahty (BSE) could significantly impact the U.S. cattle industry, according to Won Koo, a professor of agricultural economics at North Dakota State University and director of the Center for Agricultural Policy and Trade Studies. “If we have just an isolated case, domestic consumption of beef could decline five to ten percent while foreign use could decline 45 to 60 percent.”

USDA announced that a single case of BSE has been diagnosed in a Washington State dairy cow. The farm where the cow was found near Mabton was quarantined.

“The U.S. is a major exporter of beef especially to countries such as Japan, South Korea and Mexico,” Koo says. “Closing their markets could have a significant financial impact.” Japan, Taiwan, South Korea, Malaysia, Singapore and Russia have banned all imports of U.S. beef, at least temporarily. South Korea and Japan accounted for 46 percent of all U.S. beef exports in 2002.

“With the closure of the markets, beef prices may drop approximately 10 percent while pork and chicken prices may increase,” Koo says. “The price of slaughter and feeder cattle cold also drop accordingly. However, if this is an isolated case and the federal government is able to assure consumers that no contaminated meat entered the consumer market, consumer confidence will probably return in six to seven months.”

Koo’s main concern is if other cases are discovered in the U.S. “If more cases are discovered, domestic consumption could decrease by 20 percent and the foreign markets would be completely shutdown.”

According to the U.S. Meat Export Federation, U.S. beef exports totaled $3.2 billion last year. A case of BSE in Canada has meant loses of over three billion dollars to the country’s beef industry. 

Koo says it’s important to isolate regions with labeling so consumers know where the beef they are purchasing is coming from. He also suggests local grocery stores identify where their beef is coming from.

Koo has just completed a study on the effects of BSE at the request of North Dakota Agriculture Commissioner Roger Johnson. 

The National Cattlemen’s Beef Association said in a statement that “Consumers should continue to eat beef with confidence and that all scientific studies show that the BSE infectious agent has never been found in beef muscle meat or milk.”

###

Source: Won Koo, (701) 231-7448, wkoo@ndsuext.nodak.edu
Editor: Rich Mattern, (701) 231-6136, richard.mattern@ndsu.nodak.edu