Ranchers brace for world reaction to BSE discovery

Loyalton rancher Rick Roberti feeds his beef cattle on a cold winter morning. Roberti and other ranchers are wondering just how far the market will fall for beef.

By Christine Souza

Just as one of the most successful years experienced by this nation's beef producers in a decade was drawing to a close, the discovery of the disease bovine spongiform encephalopathy in a Washington state dairy cow has sent shockwaves reverberating around the world, launching cattle prices on an ominous downward spiral with no "quick fix" in sight.

The full extent of the severity of the impact on California's $1.35 billion beef sector cannot be measured.

"It is a little early to tell what the buyers' reaction will be because traditionally there is little activity at the auction markets between Christmas and the first of the year," said Loyalton rancher Rick Roberti, Plumas-Sierra County Farm Bureau director and vice president of the Plumas-Sierra County Cattlemen's Association. "Auctions will start after the first of the year and then we will see how this plays out. The industry knows that it is going to be bad, we are just wondering how bad."

U.S. Department of Agriculture officials confirmed the incidence of BSE, or "mad cow disease," on Dec. 25 after samples were taken from the animal, a non-ambulatory dairy cow at a farm in Washington state. The samples were taken as a part of the agency's standard testing protocols for BSE.

Officials with USDA and the California Department of Food and Agriculture repeatedly communicated to the public that consumers in the United States and across the globe should be very confident that the U.S. beef supply is safe.

"Safeguards have been in place for many years just in case we ever had this day where we found the first case of BSE in this country. Because of these safeguards, the consumer should feel very confident that the likelihood of an outbreak of this disease is very remote. All of the materials known to contain the infectious agent are totally kept out of the food supply and the public should have total confidence in the safety of the food supply here in the United States," said Richard Breitmeyer, California state veterinarian. "While it is a very unfortunate find and will be most significant in the loss of our export markets to certain countries, it is not a rapidly moving disease by any means."

Roberti, who operates a 5,000-acre cattle ranch with his two brothers and parents in Loyalton, said he is concerned about what will happen to the price California producers will earn now that BSE has been discovered in the United States.

"The day that the BSE find was announced, cows sold for 15 cents a pound less and some buyers quit buying altogether," Roberti said.

Chicago Mercantile Exchange Inc., the largest futures exchange in the nation, announced adjustments in its daily price limits in its December live cattle futures contracts in response to market activity following the BSE discovery. In addition, more than two-dozen countries have banned U.S. beef because of the current BSE case.

"In terms of marketing beef, we now have a list of countries, from Argentina to Vietnam, who have said they will no longer accept beef from the United States. We are losing the opportunity to sell our product. Not only are there concerns within the United States, but abroad," said Bruce Blodgett, California Farm Bureau Federation director of livestock and natural resources.

What the United States is facing as it relates to BSE and global trade, Blodgett said, is really about emotion rather than science.

"We have to meet with those countries individually and get the markets reopened," Blodgett said. "We have to let those countries know that we have bolstered safeguards that are in place and that we have a safe and wholesome food supply. But that takes explanation; that takes time."

After the case of BSE was confirmed, a U.S. trade delegation traveled to Japan to discuss the reopening of beef sales. Japan, the largest importer of U.S. beef, spends about $1 billion annually on beef imports. After meeting with the U.S. delegation, Japanese officials refused to lift the ban.

The U.S. beef business estimates it has lost about 90 percent of its export market due to the bans.

"We hope that this is a short-term problem rather than a long-term problem and we are working every day to see what is needed to get the borders reopened," Blodgett said. "USDA does have a good surveillance system in place, but we should always be looking to see what additional steps we can take to show that our products in the U.S. are the safest and the best in the world."

Rancher Casey Stone of Yolo Land & Cattle expressed concern about the coming year for California's beef producers.

"I think there will be some short-term detriment to the industry, but the question is, what is going to happen with our trading partners and how soon they are going to bounce back and re-open those markets?" Stone said. "If it is proven that this beef is from Canada, that is a plus for American cattle producers and shows that our beef tracking program is certainly doing what it needs to do."

USDA's traceback investigation indicates that the affected cow was imported from Canada in 2001. USDA also announced that the infected cow was born four months before the U.S. and Canada began prohibiting the use of brain and spinal cord tissue in cattle feed. That tissue is believed to be the the primary means by which the ailment is transmitted.