Hello, I'm Dean Borg. Mark Pearson is off this week.
Managing the economy can be a delicate balancing act in which the good news often is accompanied by the bad.
*The good news is that sales of existing homes jumped unexpectedly in February ... *and factory orders for big ticket items shot up by their largest amount in three months. *On the flip side, the U.S. trade deficit remains a major concern. Its on pace to break last year's record shortfall of $805 billion.
Part of the concern there is with U.S. farm trade, which has seen a sharp decline in once healthy surpluses. The beef trade may be emblematic of that worrisome trend, especially in regards to Japan. Sporadic findings in U.S. herds of BSE, or mad cow disease, have led Japan to close its borders to most American beef.
This week, one U.S. meatpacker hurt by that export ban took matters into its own hands by challenging the U.S. government's stance on mad cow testing.
In early 2004, officials at Creekstone Farms asked the United States Department of Agriculture for permission to test 100 percent of the cattle processed at its Arkansas City, Kansas, plant for mad cow disease. USDA officials said no. The USDA then proposed that Creekstone could test all livestock over 30 months of age. Creekstone CEO John Stewart declined that offer and the USDA refused to let Creekstone purchase the rapid test kits used for mad cow.
Stewart continued to ask for permission to buy the kits but the meetings always ended with USDA officials telling him to wait a little longer. After two years, Stewart decided he had waited long enough and began legal action this week against USDA.
John Stewart, CEO, Creekstone Farms: "We're responding to the needs of consumers. If you've looked at some of the latest data from Japanese consumers, as an example, we're finding that 70 plus percent of those consumers are talking about not buying U.S. beef unless it's tested."
Stewart wants to satisfy a request by his Japanese customers and, potentially, begin selling up to 30 percent of his company's output to Japan. USDA officials don't want to set a precedent, stating that the test rarely detects the disease in younger animals and cannot assure food safety.
John Stewart, CEO, Creekstone Farms: "I think it's fair to say that B-S-E testing would provide an additional layer of confidence, particularly our international customers and specifically our customers in Asia."
For their part, Japanese government officials have not asked for 100% testing for mad cow disease. To date, they have only required that U.S. processing plants comply with Japanese phyto-sanitary rules and that all imported beef come from cattle younger than 20 months of age.