Sat, Dec 27, 2003 - Page 7 News List

US mad cow case tests consumer confidence

MEAT MARKET Investors fear consumers could reverse their beef-eating binge after the discovery of the disease as hamburger restaurants watched their stock prices drop


This week's discovery of mad cow disease in the US presents the biggest challenge to consumer confidence in the food supply since a crisis three years ago when biotech corn not approved for human consumption showed up in hundreds of supermarket products.

A cow slaughtered on Dec. 9 in a tiny town in Washington state has tested positive for mad cow disease, sending shock waves through the US$27 billion US cattle industry and shutting down American beef sales to major foreign buyers.

American ranchers, beef packers and food retailers are awaiting final lab results on tissue from the four-year-old Holstein dairy cow in coming days.

In the meantime federal investigators were scouring records to chart the life of the animal and others in its birth herd for evidence that they may have consumed contaminated feed.

Mad cow disease, or bovine spongiform encephalopathy (BSE), is a brain-wasting disease thought to be transmitted from animal feed containing bovine brains or spinal cord. The US bans the use of those materials in feed.

But some consumer groups argue that illegal feed might not be the only culprit, warning that as carcasses are processed, high-risk material could accidentally contaminate the beef.

The first known US case of mad cow disease has prompted those groups to call for tighter beef industry regulations.

Scientists believe people can contract a human variant of mad cow disease by eating beef products infected by BSE. An outbreak of mad cow disease in Europe over a decade ago, when few protections were in place, resulted in 137 human deaths so far.

US Agriculture Secretary Ann Veneman, in announcing the Washington state mad cow case on Tuesday, insisted American beef remained safe. She has noted a lone case of BSE in Canada last spring did not dampen beef consumption in North America.

But investors fear consumers could reverse a beef-eating binge fueled in part by popular high-protein diets.

In trading on Wednesday, fast-food hamburger restaurants like McDonald's, Burger King and Wendy's saw stock prices drop and cattle futures fell by the limit allowed by the exchange.

In 2000, vast amounts of taco shells and more than 300 other corn-based products were whisked off market shelves after a genetically modified corn variety, StarLink, was found in the food supply. The product, approved only for animal feed, dealt a severe blow to US-Japan food trade.

The coming days and weeks will test American consumers' response to the mad cow case.

Andy Hemmendinger, 45, who lives in a suburb of Washington, said he would now "probably wait a little bit" before buying beef in a restaurant, "just to see what they find."

He added that the beef he eats at home two or three times a week is usually organically grown and said he wanted to know more about the transmission of mad cow disease.

"You're always torn between over-reacting because one thing happens and being foolish for not finding out what you can and making a good decision," he said.

Trading partners immediately closed their borders.

Japan, South Korea and Mexico, the three top buyers of the US$3 billion worth of beef the US exports annually, quickly suspended American beef imports. China, a potentially huge market for US beef, followed on Thursday.

But the Bush administration and US industry want to move away from the long-term trade bans prompted by the EU epidemic, if countries that experience isolated cases of mad cow disease have strong programs in place to prevent the disease's spread.

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