Instant View: Mad cow disease found in California

Wed Apr 25, 2012 6:59am EDT

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(Reuters) - The U.S. Agriculture Department confirmed on Tuesday that it found a case of bovine spongiform encephalopathy (BSE), or mad cow disease, the nation's fourth, in a dairy cow in California.

The USDA has begun to notify the World Organization for Animal Health (OIE) as well as its trading partners, but the finding should not affect U.S. beef exports, said John Clifford, the USDA's chief veterinary officer.

COMMENTS:

US Meat Export Federation spokesman Joe Schuele:

Said they were told that U.S. agricultural attaches overseas would be reaching out to their counterparts and local industry officials to explain the facts about BSE and the safeguards put in place in the United States.

"They would be engaged in outreach with our trading partners and their counterparts in foreign markets.

"There is no scientific basis for altering our level of market access," he said, adding that the USMEF has ‘people on the ground' in many of the major U.S. beef importing nations and they will be deployed to "communicate with the trade'' in those markets.

TOM TALBOT, CHAIRMAN OF THE NATIONAL CATTLEMEN'S BEEF ASSOCIATION'S CATTLE HEALTH AND WELL-BEING COMMITTEE:

When asked how long it will take to uncover more identifying information about the cow, Talbot said he expects to get more information each day from now on as USDA and the California Department of Food and Agriculture "jumped into this headfirst".

He said an atypical case indicates that the disease arose spontaneously or sporadically, perhaps through some kind of genetic mutation, rather than from contaminated feed.

"The good news is that this was not a breach of the feed ban or anything like that."

A breach of the feed ban could mean that many animals were contaminated, he said. "In this case, I think it would be extremely unlikely to find another animal found positive related to this cow."

His biggest concern is any impact to exports.

"I think, if we use sound science and follow what we know, there should be no disruption in trade. I know we are very concerned about that."

He said various trade groups and organizations are reaching out to trading partners to educate them.

"My guess is we'll probably see some short-term decline, but obviously we're hoping that this is a very, very short downturn that will return back to normal business within a very short time."

But the problem is that "we're not always dealing with sound science, we're dealing with political science …. There is absolutely no reason in the world why this should have any impact on whatever Japan has been doing as far as relaxing those issues. But you never know. We're concerned."

SENATOR MIKE JOHANNS, FORMER USDA SECRETARY UNDER FORMER PRESIDENT GEORGE. W BUSH:

"The most important facets of this detection are that the cow in question was identified through our rigorous system of interlocking safeguards; it did not enter the food chain; and that American beef and dairy continue to be among the safest in the world. Because the U.S. remains fully compliant with international animal health standards, there should be no impact on trade. Americans and the entire world should continue to be confident in the safety of American beef."

ALEX LOPES DA SILVA, ANALYST AT BEEF CONSULTANTS SCOT CONSULTARIA, SAO PAULO, BRAZIL:

The case in California could have a "drastic impact on U.S. exports" of beef and open space for Brazil to gain market share as the principal global player in this sector.

"The disease has one of the highest sanitary impacts for an exporter... The U.S. could lose a slice of its market share."

Even though it was discovered in a dairy cow, the impact will be expressive on the export market.

"If there was foot-and-mouth in the country, there would be no imports of its beef or milk. The impact is general on the production chain.

"It was that way in Paraguay, where a recent case of foot-and-mouth for a dairy cow. Countries can impose import barriers and reduce U.S. exports."

He expects the reaction to be similar to 2004, after BSE showed up in December, 2003. Brazilian exports started 2000 at 620,000 metric tons (683433 tons). By 2004, exports reached 1.866 million metric tons, in 2005 the rose to 2.204 million metric tons.

"No doubt the situation will help Brazilian exports, but it is just one factor."

MAURICIO NOGUEIRA, LEAD AGRONOMIST AT BIGMA BEEF CONSULTANTS IN SAO PAULO, BRAZIL:

"The U.S. surpassed Brazil in beef exports in 2011 for the first time in years. They were slaughtering a lot of their cows to deal with low prices. We expected exports to decline this year due to the smaller productive potential of the herd this year but this news of BSE in the U.S. will precipitate the fall in exports and open room for Brazil to regain market share.

"In addition, all of this beef that won't be exported will remain on their domestic market, drive down prices again and trigger another culling of the cows, which will prolong the U.S. beef production problems for an extended period."

"This will be a new opportunity for Brazilian beef exporters, similar to post 2003. It will make no difference if this a dairy cow. Importers will turn away from U.S. beef for a while."

RON DEHAVEN, CHIEF EXECUTIVE OFFICER OF THE AMERICAN VETERINARY MEDICAL ASSOCIATION (AND A PAST ADMINISTRATOR OF APHIS AND USDA CHIEF VETERINARY OFFICER IN DECEMBER 2003 WHEN THE INITIAL CASE OF BSE WAS FOUND IN THE U.S.):

"The finding of this BSE positive cow is not particularly surprising, and it is certainly no cause for alarm.

"It is not surprising because we have known for several years that there is a very low prevalence of BSE in our nation's cattle population. USDA has maintained a good, targeted surveillance program for the disease, and it is expected that we might find such cases periodically.

"This finding is not cause for alarm because the tissues of any infected cows that pose a food safety risk, i.e., specified risk materials or SRMs, have been kept out of the human food supply since early 2004. What this finding does confirm is that the safeguards put in place by the USDA several years ago are working as they are intended."

KELLI LUDLUM, DIRECTOR OF CONGRESSIONAL RELATIONS AT AMERICAN FARM BUREAU FEDERATION:

"Our reaction is that this is really just an indication that the processes that we have in place, most notably our targeted surveillance and testing system, are working as they are supposed to. It is not uncommon to find case of BSE, they are rare, but they do occur. This really just shows that our system that we have in place to detect those problems and keep them from entering the food supply is working just as it is intended."

Effect on trading relations:

"We don't expect this to change our trading relationships with other countries. It does not change our standing with the World Organization for Animal Health or the OIE in terms of our BSE risk classification. That system recognizes that we can still have a few cases of BSE, so long as we have those proper safeguards and firewalls in place.

"This should not change any relationships with our trading partners and we'll certainly be aggressively communicating that message to them. Certainly we want to make sure for those Asian markets that we've had some issues with and we're in the process of beginning to get back to more normal trading relationship with them, we want to make sure this doesn't raise any undue concerns with them."

JUDD AIKEN, PROFESSOR AT THE UNIVERSITY OF ALBERTA'S PRION CENTER:

"There appears to be very, very low risk (to anyone who had drunk the cow's milk). There's no evidence of prion activity in milk, it's not considered a major concern. Most of the infectious agents occur and replicate in brain and spinal cord tissue."

He said even if the animal had an open wound as it was being milked there was very little chance it would infect the milk supplies. "There's not significant amount of infectivity present in blood either."

GEORGE GRAY, DIRECTOR OF GEORGE WASHINGTON UNIVERSITY'S CENTER FOR RISK SCIENCE AND PUBLIC HEALTH:

"There's always been concern that there could potentially be a spontaneous form of mad cow disease that just arrives and doesn't get transmitted through feed. There's a disease like this in sheep, and a disease like this in deer and elk".

He said he did not know enough about the case but, "There is a potential that this is an unusual thing that really shouldn't be called mad cow disease, it should be called another kind of encephalopathy, but it's not like classic mad cow disease that's transmitted by animals being exposed to the infectious parts of other animals."

"There have been rules in place for many years to prevent the recycling of the disease in the animal herd. With protections in place, and if it is unlikely to have come from the feed, as USDA has said, it may be another disease that is very close but is not really what we think of as classical mad cow disease."

JOHN NALIVKA, PRESIDENT OF STERLING MARKETING, INC:

"The firewalls and procedures to find mad cow were in place and the process obviously worked. As far futures are concerned, the market is at a point where it doesn't take a great deal of information to trigger selling.

"Anything that comes around is going to be viewed as negative to the market one way or the other. But, it seems to be more leaning toward the negative side.

He said today's selloff was a sign of uneasiness among investors who saw futures and cash cattle prices surge to new highs as late as early March and wondered "not how much higher this thing could go, but when is this market going to fall down around us."

"You had a limited upside, but there were a whole lot of reasons the market should have a downside to it," he said referring to sluggish beef demand in part because of the "pink slime" controversy. Also, packers resisted paying more for cattle because of deeply negative profit margins.

JOE OCRANT, PRESIDENT OF OAK INVESTMENT GROUP:

"The market rallied 150 points immediately after it was confirmed that it was a cow that had already been rendered.

"We get cows like this going down every week and inspectors come out and they find them to be diseased, they render them and that's the end of it. And nobody even hears about."

The difference this time, Ocrant said, is that the rumor was so widespread on the trading floor.

The rumor was not false because it was a confirmed case, said Ocrant. But had the word be out that the cow had already been rendered, the market would not have fallen limit, he said.

"This is a deal where you sell the rumor and stay short until you find out it was true," said Ocrant. "The rumor was mad cow was found, but in a way that it doesn't affect anything."

RICH NELSON, DIRECTOR OF RESEARCH FOR ALLENDALE INC:

"Keep in mind the majority of our beef exports go to countries with limitations for U.S. product anyway (beef from cattle aged under 30 months). Japan has the more restrictive 20 months and under standard. World health standards suggest beef from cattle under 30 months is safe because the majority of cases don't appear until after 30 months of age (though Japan had cases down to 20 - 22 months of age).

"With these limitations our foreign buyers have already been prepared for more cases in the U.S.. This is not a 2003 situation. There will not be any new bans because of these limitations. Exports may dip temporarily but not in a meaningful way."

DENNIS SMITH, AN ANALYST WITH ARCHER FINANCIAL:

"The key is what the export customers' reaction is to all of this. My feeling is there won't be a big reaction and if they do they'll go with an age restriction like the Japanese do.

"Japan tightened import regulations on imports of U.S. beef after the first case in 2003 and currently only allows imports of beef from cattle aged 20 months or younger.

"The restriction, along with import curbs from other countries, caused U.S. beef exports to plunge, but sales have gradually recovered over the years."

SHAWN MCCAMBRIDGE, GRAINS ANALYST FOR JEFFERIES BACHE:

"The concern is that importing nations might ban imports from the affected area. Meat exports have been very brisk, so anything like this is bearish for meats and grains too, especially corn and meal. In the past, they've banned imports so it now depends on what our overseas customers do."

(Editing by Marguerita Choy and Jim Marshall)

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