Reaction to BSE case in California remains muted


Issue Date: May 2, 2012
By Ching Lee

Unlike the first U.S. discovery of bovine spongiform encephalopathy in 2003 that triggered numerous trade bans of American beef, last week's announcement of the nation's fourth BSE case—and the first one found in California—resulted in relatively minor market setbacks.

"It appears at this time there's very minimal impact on the beef industry for the short term," said Kevin Kester, a Monterey County rancher and president of the California Cattlemen's Association. "It appears our international trading partners understand that U.S. beef is safe, and so there's no indication of market interruptions of our U.S. beef products across the globe."

The nation's top four export markets for beef—Canada, Mexico, Japan and South Korea, which account for 65 percent of total U.S. beef exports—all said they intended to continue importing American beef. Only one country—Indonesia, a relatively small market—suspended U.S. beef shipments.

Joe Schuele, a spokesman for the U.S. Meat Export Federation, said even before the BSE announcement, Indonesia had been tightening its market this year, as part of an initiative to bolster its domestic beef production.

"So they've been making it very difficult not only for the United States but also New Zealand and Australia to export beef into Indonesia," he said. "It's still disappointing, because we don't want any of the markets to overreact, but this is one of numerous recent events with Indonesia that has made that market difficult to deal with."

Two South Korean retailers did pull U.S. beef products from their store shelves, but one had resumed sales.

Live cattle futures markets also initially took a dive, but rebounded partially after the U.S. Department of Agriculture announced that the affected dairy cow was actually destined for a rendering facility in the Central Valley, never intended for human consumption and at no time presented a risk to the food supply or human health.

Tests also confirmed that the animal was positive for "atypical" BSE, a very rare form of the disease not generally associated with an animal consuming infected feed, USDA officials said.

"Evidence shows that our systems and safeguards to prevent BSE are working, as are similar actions taken by countries around the world," USDA Chief Veterinary Officer John Clifford said.

Schuele said such assurances from government officials had helped to thwart negative market impacts.

"They've done a really outstanding job reaching out to trading partners," he said. "And we have people on the ground in those markets, and they've done a lot of outreach to both government officials and people in private industry that are our customers."

Kester said while he was still waiting to see the full extent of American consumers' reaction to the BSE news, he was "hopeful that any impacts will be very short term."

Annette Kassis, spokeswoman for the California Beef Council, said her office had not heard any backlash from consumers and had been posting information about BSE on Facebook and Twitter to allay any public concerns.

"I think the biggest misperception that I'm trying to correct is that people think the BSE agent can be in the meat, and it cannot," she said. "The BSE agents never get into the muscle meat and are never in the steak, the roast, the hamburger."

Government officials had been good about telling the public that milk does not transmit BSE, said Rachel Kaldor, executive director of the Dairy Institute of California. She noted that the BSE announcement had had no negative impact on milk sales.

"I think the communication has been pretty clear and concise and unambiguous from all of our regulatory agencies that the food supply is absolutely safe," she said.

Since the United States had not had a case of BSE since 2006, Schuele said there was initially "a lot of nervousness" about how U.S. trading partners would respond to the news, because "everybody remembers the nightmare scenario that unfolded in 2003 with regard to exports." After the first discovery of BSE in December that year, overseas sales of U.S. beef plummeted $3 billion.

But Schuele noted the trade impact had been much less with more recent cases of BSE. U.S. beef exports actually rose following the last two incidents—in 2005 and 2006—both of which involved atypical cases of BSE. Recent BSE cases elsewhere in the world also did not have much trade impact, as trading countries recognize the effectiveness of the enhanced protections that have been implemented, he said.

"The business climate worldwide with regard to BSE has come a long way in the last decade," Schuele said.

Kassis also pointed out that there was much less known about BSE back in 2003, and it was before new regulatory measures were put in place. This time around, government officials and agricultural organizations were able to respond more quickly with getting information out to consumers and the media.

"We're able to say, 'Here's how these safeguards have operated, and the system works.' That's a biggie right there," she said.

Japan, the third-largest export market for U.S. beef, already limits beef imports to cattle that are 20 months of age or younger as a precaution against BSE, because the disease typically shows up in older animals.

The Japanese government has said it may change that rule to accept cattle up to 30 months of age, more in line with international standards. The new BSE case brought speculation about whether Japan would delay its relaxation of the rule.

Kester said he expected that Japanese government officials "will continue with their internal working of the new rules."

"Their government has let us know that nothing will change," he said.

USDA officials said last week the cow found to have the disease in California was more than 10 years old and had been sent to the rendering plant from a Tulare County dairy.

(Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.