New BSE Case Likely to Have Little Impact on Cattle Prices, Exports

American beef consumption expected to remain stable. Markets previously closed unlikely to reopen, but those countries accepting U.S. beef aren't likely to refuse future shipments.

Published on: Mar 15, 2006

Confirmation of a third case of bovine spongiform encephalopathy disease in the United States should have minimal effect on cattle prices and beef exports, says Chris Hurt, a Purdue University agricultural economist. 

USDA announced Monday that a 10-year-old cow in Alabama tested positive for BSE.

American consumption of United States beef is expected to remain stable, Hurt says. Export markets previously closed to United States beef shipments won't reopen with this third case of BSE but those countries accepting American beef aren't likely to refuse future shipments, either, he adds.

"There are two concerns in U.S. cattle markets," Hurt says. "First, there's the concern that we would lose beef exports. At this point, our largest buyers of our beef are not buying from us, particularly Japan. Japan is not buying our beef because of BSE shipment problems that we had in January, when we shipped them some beef that was not handled in a proper manner. We aren't shipping beef to South Korea, as well."

Hurt goes on to explain that we are shipping beef to Canada and Mexico, and but he doesn't think this BSE case will have an impact on those markets. "In general, we think this new case will delay somewhat our getting together with Asian countries, particularly Japan and South Korea, but we don't believe it is going to have any measurable impact in terms of the volume of exports or the price of cattle."

Hurt warns that it is entirely possible that over the next year or so that the U.S. could find another animal or two that has had this disease. Since BSE testing began in the U.S. nearly two years ago tests have been administered to hundreds of thousands of cows.

"I think it's important to keep this disease in perspective," Hurt says. "We started the testing program in June 2004. Since that time we've processed almost 50 million animals in the United States and found three that have had BSE. So it is a very, very, very extremely low incidence in our herd."