Mad cow costs US billions

2005-05-02 18:26

Kansas - The discovery of mad cow disease in the United States cost the beef industry between $3.2bn and $4.7bn in losses last year, according to an economic impact study.

The report, commissioned by the Kansas Department of Agriculture, also concluded that voluntary testing for the disease would have provided an economic gain to the beef industry despite the added testing costs.

"When we look at the slow progress in terms of (reopening trade) with Japan and South Korea, it may well be the end of 2005 until we see movement - and so those numbers enlarge significantly," said Adrian Polansky, Kansas' agriculture secretary.

The 65-page report, released last week, looks at regulator costs, losses and consumer reactions after the December 2003 discovery of a mad cow case in Washington state.

It concludes that profits from overseas markets would have more than paid for testing for mad cow disease, formally known as bovine spongiform encephalopathy.

People who eat beef tainted by the aberrant protein believed to cause mad cow can contract a rare but fatal disease, variant Creutzfeldt-Jakob disease.

The US Agriculture Department has been adamantly opposed to voluntary BSE testing, saying such tests would not identify mad cow in younger cattle and are not needed.

The department has denied requests by some beef processors, including Arkansas City-based Creekstone Farms Premium Beef, to allow testing of all animals that come through their facilities.

Kansas State researchers estimated it would have cost $640m to test all cattle slaughtered in the United States last year, not counting the investment needed to equip processing plants for the testing.

Days after the discovery of the United States' first mad cow case, 53 countries banned US beef imports.

In 2003, US beef exports were valued at $3.95bn - accounting for 9.6% of the nation's commercial beef production, according to the Kansas Department of Agriculture.

About 90% of those exports went to five countries: Japan, Mexico, South Korea, Canada and Hong Kong.

While Mexico and Canada partially resumed beef imports last year, exports of US beef in 2004 still ran 82% below 2003 levels.

Polansky was encouraged that Taiwan, Kansas' fifth largest export market, recently resumed beef trade with the US But he said beef producers need access to the Japanese market, which accounted for 35% of the value of beef exports in 2003.

- SAPA