Iowa Public Television


U.S. soy market aided by European Mad Cow scare

posted on December 1, 2000

By most accounts, both anecdotal and statistical, the nation's economy is slowing.

Overall the pace of economic expansion has ebbed. Personal incomes have fallen sharply in the past month, as have orders to factories for big-ticket items. And Wall Street continued its sell-off of once high flying tech stocks that have failed to generate earnings worthy of the prices investors have paid for them. The value of the tech-dominated NASDAQ at one point was off 50 percent from its peak of the year.

While the nation's fourth estate remains hostage to a prolonged election, the rest of the country is more concerned with economic fundamentals like supply, demand, and fear. This is especially true for Rural Americans who see the farm economy whipsawed by maladies and technologies that did not exist a generation ago.

U.S. soy market aided by European Mad Cow scare The rhetoric that originally spewed from England's parliament now seems to be surfacing in Germany. The German government had been touting a high standard on feedstuffs as the barrier to mad cow disease.

But, two German cows have now been identified as infected with bovine spongiform encephalopathy, better known as BSE or mad cow disease. In recent weeks, France, Spain, Germany, and Portugal's Azores Islands have all reported incidents of BSE. Germany is likely to start a ban of all meat- and bone-meal feeds on Monday, and is pushing for the entire European Union to follow suit. E-U farm ministers will hold a special meeting next week to discuss the mad cow disease problem.

While beef producers and processors are taking a hit in Europe, U-S soybean markets are getting a boost. The price of soybeans climbed over five dollars, soy meal moved above 180 dollars a ton, and the pace of soy crush has quickened, all in anticipation of an E-U ban on animal-based feeds.

Meanwhile, a group of cranberry growers filed suit this week, seeking to break up the grower-owned Ocean Spray cooperative.

For the second consecutive year, growers are losing money on their crops, and some of Ocean Spray's largest growers claim a sale of the co-op may be the only way for them to survive.

Basking in the glow of heavy demand, Ocean Spray's cranberry bogs nearly doubled in the 1990's, and independent growers increased their acreage by more than 175-percent during the boom.

By 1999, the new bogs yielded a record harvest, and supply surpassed demand. Ocean Spray currently has nearly enough fruit in storage to last a full year without growing any new crops.

Prices paid to growers have plummeted from an all-time high of 80-dollars per 100-pound barrel in 1996 to less than 11-dollars per barrel this fall... About a third of what it costs to grow a barrel of berries.

Producers claim selling the company would allow them to realize a profit on their shares of the grower-owned cooperative.

Tags: agriculture cattle diseases livestock Mad Cow markets news