Wednesday, December 24, 2003

Major American trading partners have banned U.S. beef since the government on Tuesday revealed the discovery of a case of mad cow disease in Washington state, threatening to seriously damage an industry that had been enjoying growing exports and the highest prices in years.

The U.S. Department of Agriculture (USDA) rushed to reassure consumers that beef remains safe as it continues an investigation into the origin of the disease in the lone dairy cow and the destination of any products from the slaughtered animal.

Agriculture Secretary Ann M. Veneman on Tuesday afternoon reported the first apparent case of mad cow disease in the United States. Officially known as bovine spongiform encephalopathy, or BSE, it is a fatal disorder that attacks the central nervous system and can move to humans who eat infected tissue.

“But I think it’s important to recognize that the material in a cow that creates infectivity — the spinal cord, the brain, what’s called the distal ilium — was all removed from this cow. And so the risk is extremely low to human health. And I would, without hesitation, say that no one should be afraid to eat beef,” Mrs. Veneman said yesterday on CBS’ “The Early Show.”

Scientists say that muscle cuts, such as steaks and roasts, cannot transmit the disease. The disease resides in the brain and spinal columns of afflicted animals, and these parts of beef carcasses are discarded by packing plants. Some packing plants use machinery to strip the spinal columns of usable meat, but at least one of the three packing plants in Washington, where the diseased cow was butchered, does not have such equipment.

Still, the U.S. industry is bracing for severe fallout after the discovery.

“It’s going to have a major impact when you lose export markets we count on for $2 billion to $3 billion in revenue,” said Bryan Dierlam, director of legal affairs for the National Cattlemen’s Beef Association, a trade group that represents U.S. producers.

Japan is the largest export market for U.S. beef, followed by South Korea, Mexico and then Canada, according to USDA’s economic-research service.

Japan, Mexico, South Korea, Russia, Egypt, Hong Kong, Taiwan, Colombia, Singapore, Thailand, Brazil, Malaysia, Australia, Chile and Ukraine have all banned U.S. beef imports, the U.S. Meat Export Federation said. The countries represent about 87 percent of volume and value for beef exports. U.S. ranchers export about 10 percent of domestic production. Overseas sales were projected to reach $3.2 billion this year, Mr. Dierlam said. Industry and government officials want those markets reopened as soon as possible.

“Certainly, we want to get the borders open as soon as possible. We need to conduct a thorough epidemiological investigation to present to trade partners. That is in process,” said Ed Curlett, a spokesman for USDA’s Animal Plant Health Inspection Service.

The USDA sent the infected cow’s remains to Britain for formal confirmation of the mad cow diagnosis; results are expected as soon as today.

Canada earlier this year reported its first mad cow case in a decade, prompting the United States to shut its border to Canadian red meat.

U.S. officials reopened the border to some Canadian products — boxed, boneless beef younger than 30 months — in September after a three-month of investigation of the case. Mr. Curlett said if the U.S. mad-cow case is similar to Canada’s — a lone incident — the time frame for the investigation would be similar.

It is not clear whether trade partners would want to heed U.S. scientific findings after a confirmed case.

Investors were unforgiving in the first day of trading since the announcement.

Cattle futures at the Chicago Mercantile Exchange quickly dropped the maximum allowed, 1.5 cents a pound, and then trading stalled with no buyers.

Burger chains and steakhouses also were hit. McDonald’s stock dropped $1.32 to close at $23.96 on the New York Stock Exchange. Wendy’s dipped $1.87 to $37.79.

Businesses tried to downplay any potential health risks and reassure consumers.

“We will continue to follow the strict safeguards and guidelines we established years ago, and we remain very confident that Wendy’s beef is safe and wholesome,” Tom Mueller, Wendy’s president of North America, said in a statement.

Since 1989, the U.S. government has taken a series of steps to protect against this animal disease, including a ban on some imports and, in 1997, a prohibition against using most animal protein in the manufacture of feed intended for cows.

U.S. officials said the disease is spread when cows eat feed made from animals that are infected with BSE.

Federal safety measures, however, are not universally accepted as adequate. “[F]ederal actions do not sufficiently ensure that all BSE-infected animals or products are kept out or that if BSE were found, it would be detected promptly and not spread to other cattle through animal feed or enter the human food supply,” a February 2002 General Accounting Office report said.

Critics also have noted that the United States tests a relatively small percentage of all slaughtered cattle: Although about 35 million head are slaughtered per year, less than 1 percent are tested for mad cow disease.

Investigators are attempting to locate the herd of origin for the infected cow and find out whether meat from the animal has reached consumers, Mr. Curlett said.

The USDA identified three facilities where the infected animal on Dec. 9 was sent for processing. One, Vern’s Moses Lake Meats, a Moses Lake, Wash., Tuesday recalled about 10,410 pounds of raw beef that might have been exposed to tissues containing mad cow disease, USDA’s Food Safety and Inspection Service said. It is not clear whether the meat had been consumed.

“We believe there is a very, very low risk to our human population,” Mr. Curlett said.

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