Wednesday, March 15, 2006

"Mad Cow" in Alabama: The Market Yawns

Stories of the third case of so-called “mad cow disease” (also known as BSE, or bovine spongiform encephalopothy) emerging in Alabama have apparently generated yawns of disinterest from participants in markets for fed cattle and beef retailers. Though fed cattle markets (including futures) have softened (and in the case of some futures contracts, prices have declined significantly), the mad cow case did not have the same dramatic impact that the first one in the U.S. had.

In part, this is due to the scientific reality. None of these animals entered the food chain. The cow in Alabama was old, and possibly ingested feedstuffs that are now prohibited (though even this proves to be an unproven theory about the cause of this disease). It was killed by a veterinarian and buried on the farm. There was no risk to the food supply as a result. And people may now believe this, which is good. Sometimes fears arise in us which cause us to do things we later regret or dismiss as a silly overreaction (does anyone see an analogy with Dubai?).

Meanwhile, back in Japan, which has closed its markets to us based on fears about mad cow (or more likely based on protectionist trade practices), a website I often consult about cattle, the Cattle Report, reports that Japan has now reported its 23rd case of BSE.
The website can be found here: http://www.agcenter.com/cattlereport.asp
See what I mean about protectionist trade practices?

Best regards.
EAM

2 comments:

Ernie Goss said...

One question Ed:

Is it not virtually impossible to detect a case of BSE once it has entered the food chain? It makes sense to me that most if not all spotted cases will be those that have not entered the food chain. My concern is for those that went undetected.

Ed Morse said...

Rigorous testing at slaughtering plants applicable to animals exhibiting symptoms of BSE would presumably identify and remove any potential pathogens from the food supply. Enhanced precautions for brain and spinal tissues, thought to pose greater risks of transmission, also restrict possible entry into the food supply of pathogens from all animals.
Given that there have been three BSE cases in a total population of more than 100 million cattle in the U.S. (and no human cases traceable to beef) I would assess this risk at a low level. It is probably lower than the risk of being struck by lightning while you are celebrating your winning powerball lottery ticket. But then again, you are the statistics expert!