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Beef Exports Lag as BSE Probe Continues

posted on January 16, 2004


The impact of America's lone case of Mad Cow disease continues to ripple through the economy.

In broad terms, the Federal Reserve reports more than half of its 12 districts cite the disease as a worry.

In a more specific way, the cattle industry has seen everything from temporary layoffs at packing plants to lost market share for animal feed byproducts. That, in turn, has affected the poultry industry, which consumes nearly half of the meat and bone meal in animal feed.

Much of the Mad Cow focus now has shifted to the breadth and scope of testing. Japan, the largest customer for U.S. beef, wants every cow tested, as do many consumers. Meat industry analysts say that would be overkill.

Whatever level of testing officials eventually decide upon, one thing is clear: Restoring confidence overseas in the safety of U.S. beef will take time.

Beef Exports Lag as BSE Probe Continues While the discovery of a single case of mad cow disease in Washington State is having a limited effect at the local meat counter, the situation continues to wreak havoc on the U.S. export market.

This week, USDA added another eight countries to the list of those banning imports of American beef, bringing the total ban to 50 foreign nations.

Citing the BSE situation, USDA this week predicted U.S. beef exports, which currently amount to about $3 1/2 billion, will decline by 90% in 2004, due to the fact that virtually every beef importing nation -except Canada - has banned shipments of American beef.

Nevertheless, officials with the National Cattlemen's Beef Association claim strong retail sales domestically indicate unwavering demand.

Gregg Doud, Chief Economist, NCBA: Our primary concern has been in regard to consumer confidence, in that 90% of our product is consumed domestically. And we've been very heartened in the last week with all the reports and all the economic data coming back indicating that consumer demand for beef has been absolutely rock solid through all of this. And that has been very helpful to the marketplace. But now I think the realities of the loss of 90% of our export market are of extreme concern and it is our number one priority to get to work now immediately to get those export markets back up and on track as quickly as we can.

Japan is the most lucrative market for U.S. beef -- importing about one-billion dollars worth annually. Late this week, U.S. and Japanese officials agreed to hold further talks on lifting Tokyo's ban on imports of American beef.

But the U.S. is likely to face an uphill battle in the negotiations. Japan requires all of its cows to be tested for BSE before going to market and is urging the U.S. to tighten its procedures as a condition for a possible lifting of the ban. Currently, USDA tests only a fraction of the 35 million head of cattle exported by the U.S. each year.


Tags: agriculture animals beef economy livestock Mad Cow markets meat news