BSE (Mad Cow) Continues to Exert Important Effects on the US Beef Industry
Livestock Update, March 2004
Dr. W. Dee Whittier, Ext. Veterinarian, Cattle, VA-MD Regional College of Veterinary Medicine, Virginia Tech
Two months have passed since the discovery of a cow in Washington State with a case of Bovine Spongiform Encephalopathy (BSE or Mad Cow Disease). The investigation of this case and associated animals has been completed without identifying other cases of the disease. Despite this fact, there continues to be a profound effect of the occurrence on the beef industry.
Major issues associated with BSE in the US include:
The official classification of the US BSE status on BSE is determined by the World Organization for Animal Health (OIE). Previous to this event, we were classified as a minimal risk country and needed to have the ban on feeding meat and bone meal in place for 7 years to be classified as free. It is unknown if we will be classified as free. Even if/when classified as free it will not be automatic that important countries to which the US exports beef will open their doors to beef products. Japan tests every animal that is slaughtered for BSE and has implied that we do the same. This would be terribly costly and take a long time to put in place. Almost no expert thinks this is scientifically sound.
Agricultural trade is a very interesting and often contentious area. "Health Protection" sometimes covers for trade barriers. The road to reopening export markets may be long and rocky in some cases. The most important markets are Japan, Mexico and South Korea (See Table below. Source: http://www.ers.usda.gov/news/BSECoverage.htm). National Cattleman's Beef Association (NCBA) estimates that currently $130 to $165 value per fed carcass is lost do to the export ban. This would be sufficient to increase the current fed cattle price from $78-79 to $90 per cwt.
Top markets for U.S. beef, 2002, account for 92 percent of total beef exports
|(Million lbs. carcass weight)||($ Million)|
Canadian imports of live cattle
Because beef imports from Canada to the US were substantial, their discontinuance after discovery of BSE in a Canadian cow in May 2003 had favorable effects on US beef cattle prices. It is estimated that beef imports from Canada as share of U.S. beef consumption in 2002 accounted for 3.9 percent. Prior to the US case of BSE there was speculation that imports of live animals would resume in early 2004. The discovery that the Washington cow was born in Canada has postponed the opening. It seems apparent that US beef markets are assuming that it will be some time before imports are resumed. WE are promised that the intention to allow imports of live cattle will be published and there will be a comment period prior to the opening. NCBA's position is that the Canadian border should not open before nations to which we export open their doors.
One measure announced soon after the discovery of BSE in the US was that Specified Risk Materials (SRM's) which include the skull, brain, the vertebral column and associated nervous tissue and the small intestine would be removed at slaughter from all cattle over 30 months of age. This seemed like a measure that would increase expenses in the slaughter industry a little and things would go on. What has happened is that the old way of estimating the age of a carcass, looking at cartilage changing to bone, has been replaced by looking at teeth. This has changed the grading outcomes and thus the prices of a number of carcasses.
According to studies, often done 50 to 100 years ago, cattle get their first permanent incisor teeth at 18 to 24 months and their second set of permanent incisors about 30 months of age. As the rule is now being applied, any animal with any sign of a second permanent incisor is being classed as D maturity and their carcass is having the SRM removed. These carcasses are being graded as "Commercial (a cow grade) and have a value of up to $50 less than the Choice grade they otherwise might have merited.
Since there appears to be considerable variation in when teeth do actually come in, there is much discussion about this issue. Studies are quickly being done to find out if modern cattle get second incisors earlier than cattle used in the old studies. The USDA has said that actual documentation of cattle age may overrule the teeth. What documentation is actually required is still being discussed.
It is hard to tell where this issue will take the cattle industry. It seems apparent that the feeding of cows and heiferettes will be profoundly affected. Will prices on older stockers be diminished significantly? It would seem prudent for producers to keep good records of calf birth dates and to provide individual identification. These measures might increase the value of calves and feeders substantially.
International subcommittee report
Some highlights of the report include an assessment that "it is probable that other infected animals have been imported from Canada and possibly also from Europe. These animals have not been detected and therefore infective material has likely been rendered, fed to cattle, and amplified within the cattle population, so that cattle in the USA have also been indigenously infected." Recommendations have also been made as summarized below.