Mad Cow and The Economy

Contaminated foods have a negative impact on the economy of a country. In the following blogs I will explain how Mad Cow disease has negatively impacted the United States economy by using previous examples from the United States, as well as Great Britain. Tainted food will affect the economy by: lowering product prices, decreasing production, decreasing consumer trust, and hindering global trade opportunities. 

What is it?

Mad Cow disease, also known as bovine spongiform encephalopathy (BSE), is a fatal neurodegenerative disease that affects cattle. This disease damages the nervous system, which consists of the brain and spinal cord. Typically adult cattle are affected the m(ost, but there have been cases where BSE has been found in younger cattle. BSE can be transmitted to humans through the consumption of meat. During the slaughtering process if meat, in anyway, comes into contact with a contaminated brain or spinal cord the disease is transmitted. If meat has become tainted with BSE it is nearly impossible to get rid of the virus. Even cooking the meat at high temperatures cannot kill the prions responsible. This is exactly why Mad Cow disease is so fatal.

Photo Credit: http://en.wikipedia.org/wiki/Bovine_spongiform_encephalopathy

Link: http://www.ag.ndsu.edu/pubs/ansci/beef/as1206w.htm

"Bovine Spongiform Encephalopathy (BSE; Mad Cow Disease)." Bovine Spongiform Encephalopathy (BSE; Mad Cow Disease). Web. 09 May 2012. <http://www.ag.ndsu.edu/pubs/ansci/beef/as1206w.htm>.

Recent Case

Mad Cow cases have rarely been seen in the Untied States. However, on April 24^th, 2012, a new case of BSE was brought to the public’s attention. The USDA had discovered that a dairy cow found near Hanford, California and had been diagnosed with Mad Cow disease. The cow was brought to a facility, near Fresco, CA, that takes dead livestock and tested positive for BSE. This cow was only the fourth reported case of Mad Cow disease in US history. 

Photo Credit: http://us.city.com/timthumb/thumb.php?src=http://api.yellowbrix.com/story_images/DEFAULT/20120425/orig_29796426-a6e9-465e-a7bb-8b89c1677f05.jpg&w=400



Link: http://www.youtube.com/watch?v=eloDKqZ4TA4

"Mad Cow Disease Found in California." YouTube. YouTube, 24 Apr. 2012. Web. 09 May 2012. <http://www.youtube.com/watch?v=VgB9sg5dy8w>.

The USDA

The USDA, United States Department of Agriculture, is a federal department that is meant to distribute knowledge about agriculture. The USDA ensures the safety of food and educates consumers on nutrition and products. In this recent case of Mad Cow disease, the USDA reviewed the cow’s records to check if the virus may have made its way into the food chain. They ensure that in no way, shape, or form, did this cow enter the markets, so consumers have nothing to worry about. However after releasing this claim, the USDA tracked down one of the BSE cow’s offspring that they are now testing. If the young calf does not pass a brain graph it will test positive for Mad Cow disease. The USDA had also acquired knowledge that the BSE cow gave birth to a stillborn calf. They remain unsure of how the body was disposed.

Photo Credit: http://chuvachienes.com/wp-content/uploads/2012/04/matson_mad_cow.gif
Link: http://www.usda.gov/wps/portal/usda/usdahome

"U.S. Department of Agriculture." U.S. Department of Agriculture. Web. 09 May 2012. <http://www.usda.gov/wps/portal/usda/usdahome>.

South Korea Reacts

Although the USDA is meant to ensure food safety, some consumer and buyers are not convinced. South Korea is the fourth largest importer of US beef and veal. In 2011, South Korea purchased 107,000 tons of beef. The price totaled $563 million dollars. After South Korea received news of the recent BSE outbreak buyers panicked. The second and third highest grossing supermarket chains halted the sales of US beef products. The sudden stop in sales at these supermarkets caused consumers to worry about previous beef purchased. South Korea has recently sent an inspection team to the US to check the safety of American meats after the news of Mad Cow in California.

Photo Credit: http://www.guardian.co.uk/science/2012/apr/25/mad-cow-disease-us-mutation
Link: http://www.suntimes.com/business/12123746-420/mad-cow-case-prompts-korean-stores-to-halt-sale-of-us-beef.html

"Mad Cow Case Prompts Korean Stores to Halt Sale of U.S. Beef." - Chicago Sun-Times. Web. 09 May 2012. <http://www.suntimes.com/business/12123746-420/mad-cow-case-prompts-korean-stores-to-halt-sale-of-us-beef.html>.

Not the First

Some might find it over dramatic for South Korea to suddenly halt sales of US beef but, they have logical reasoning behind it. This recent case of Mad Cow is not the first seen in the United States. In 2003 the first case of BSE appeared in the United States. 12 countries including: South Korea, Japan, Mexico, and Canada banned or restricted sales of US beef and cattle products. This tremendously impacted the US because South Korea, Japan, Mexico and Canada totaled 90% of all US beef and veal exports. Losing these countries meant losing billions of dollars in profit. In 2006, two more cases of BSE were discovered in the United States. First, a cow born in Texas, whose body was later incinerated 7 months after tests were run.  Then months later a third cow found in Alabama tested positive for BSE. The USDA stated that these cows had not made their way into the animal or food chain, so Americans had nothing to worry about. Cases such as these dramatically impact consumer trust.

Photo Credit: http://assets.mediaspanonline.com/prod/7980493/AK_042512_BSE_N-America_w500.jpg
Link: http://articles.cnn.com/2003-12-23/us/mad.cow_1_mad-cow-disease-fatal-brain-wasting-disease-bse?_s=PM:US

"First Apparent U.S. Case of Mad Cow Disease Discovered." CNN. 24 Dec. 2003. Web. 09 May 2012. <http://articles.cnn.com/2003-12-23/us/mad.cow_1_mad-cow-disease-fatal-brain-wasting-disease-bse?_s=PM:US>.

US World Trade Market

In early 2003, the United States was the world’s third largest exporter of beef. The US gathered nearly 18% of the world beef and veal market. However after the case of BSE was found in 2003, the US only claimed 3% of the world beef and veal market, dropping 15%. Today the United States still has not regained all of its previous market, claiming only 14% of the world trade of beef and veal. This is because some countries to this day still ban beef imports from the United States. Due to the 2003 case of BSE, shipments of beef dropped more than 80%, severely damaging trade. In 2004, Canada and Mexico resumed imports with the US. Finally, in 2008, South Korea resumed imports, although most were still very hesitant to purchase products. Now, South Korea places restrictions on which cattle they purchase from the United States, only buying cows less than 30 months of age. We can only imagine how long South Korea will halt sales of US beef this time around.

After the case of Mad Cow disease in 2003, the estimated US beef industry losses due to the loss of beef or beef by-product exports in 2004 totaled $3.2-$4.7 billion dollars.

Photo Credit: http://sites.duke.edu/soc142-beef/political-determinants/
Link: http://www.ers.usda.gov/news/BSECoverage.htm


"U.S. Beef and Cattle Industry: Background Statistics and Information." Background Statistics: U.S. Beef and Cattle Industry. Web. 09 May 2012. <http://www.ers.usda.gov/news/BSECoverage.htm>
"Mad Cow Disease Found in California." YouTube. YouTube, 24 Apr. 2012. Web. 09 May 2012. <http://www.youtube.com/watch?v=VgB9sg5dy8w>.

Great Britain and BSE

The United States had seen the effects Mad Cow disease had on the economy o Great Britain which likely prepared the United States for all cases seen in the states. BSE in Great Britain was an awful experience. The first cause of Mad Cow appeared in the mid 1980’s. By 1993 over 1,000 cases of BSE were being reported every week! By this time there were nearly 160,000 infected cows in the country, which was around 50% of the dairy cattle. The situation only worsened once people began eating the infected meat.

Photo Credit: http://www.scotland.gov.uk/Resource/Img/35596/0012954.gif
Link: http://uk.news.yahoo.com/factbox-mad-cow-creutzfeldt-jakob-disease-233227490.html

"EFFECT ON ECONOMY." ThinkQuest. Oracle Foundation. Web. 09 May 2012. <http://library.thinkquest.org/03oct/01272/id32.htm>.

The Scare

Now that people were eating the contaminated meat there was a new scare. It was called Creutzfeldt-Jakob disease (vCJD). This disease was found in those who had consumed infected meats. It affected humans the same way that BSE affected cattle; it was a degenerative disease that harmed the nervous system. The continent of Europe went into a panic. Less people began consuming beef. This loss of consumption dropped sales 30%.Farmers were not able to sell their beef products which lead to a 40% drop in beef production. Over 1.3 million cattle had to be killed in Great Britain alone. The beef industries crashed and more than 45,000 jobs were lost. In total, vCJD caused 167 deaths.

Photo Credit: http://www.eurosurveillance.org/images/dynamic/ew/v07n02/030109-vCJD.gif

Link: http://www.accessexcellence.org/WN/NM/madcow96.php

"MAD COW DISEASE The BSE Epidemic in Great Britain." MAD COW DISEASE: THE BSE EPIDEMIC IN GREATBRITAIN. Web. 09 May 2012. <http://www.accessexcellence.org/WN/NM/madcow96.php>.

Japan Bans

In 1996, after cases of Mad Cow disease appeared in Great Britain, Japan stopped importing animal feed from the country. This might sound familiar, in 2001, Japan banned beef and processed beef imports from 18 countries world wide. An interesting fact, Japan was the first country outside of Europe to report a case of a cow infected with the BSE virus.

Photo Credit: http://www.kearneyhub.com/news/local/article_2d0b3a56-8fa6-11e1-ba7a-0019bb2963f4.html
Link: http://library.thinkquest.org/03oct/01272/id32.htm
"EFFECT ON ECONOMY." ThinkQuest. Oracle Foundation. Web. 09 May 2012. <http://library.thinkquest.org/03oct/01272/id32.htm>.

The Statistics

Here are a few statistics provided by the USDA’s Economic Research Service:

U.S. beef exports (commercial carcass weight and value):
    2002: 2.447 billion pounds, $2.629 billion
    2003: 2.518 billion pounds, $3.186 billion
    2004: 460 million pounds,   $631 million
    2005: 697 million pounds,   $1.031 billion
    2006: 1.132 billion pounds, $1.617 billion
    2007: 1.434 billion pounds, $2.187 billion 
    2008: 1.996 billion pounds, $3.014 billion 
    2009: 1.935 billion pounds, $2.909 billion
    2010: 2.300 billion pounds, $3.839 billion
    2011: 2.788 billion pounds, $5.042 billion

The sudden appearance of Mad Cow disease may have affected the dramatic price drop from 2003 to 2004.

U.S. beef production (commercial carcass weight):
    2002: 27.09 billion pounds 
    2003: 26.24 billion pounds  
    2004: 24.55 billion pounds
    2005: 24.68 billion pounds
    2006: 26.15 billion pounds
    2007: 26.42 billion pounds 
    2008: 26.56 billion pounds 
    2009: 26.07 billion pounds
    2010: 26.41 billion pounds 
    2011: 26.29 billion pounds

After the appearance of Mad Cow disease in 2003, production decreases.

U.S. beef exports as percent of production: 
    2002: 9.0 percent
    2003: 9.6 percent
    2004: 1.9 percent
    2005: 2.8 percent
    2006: 4.4 percent
    2007: 5.4 percent
    2008: 7.1 percent 
    2009: 7.4 percent 
    2010: 8.7 percent 
    2011: 10.6 percent

Finally, we can see the impact Mad Cow disease had on exports, from 2003 to 2004, dropping nearly 8%. 

Link: http://www.ers.usda.gov/news/BSECoverage.htm
"U.S. Beef and Cattle Industry: Background Statistics and Information." Background Statistics: U.S. Beef and Cattle Industry. Web. 09 May 2012. <http://www.ers.usda.gov/news/BSECoverage.htm>