Discovery could fetter domestic beef sales

The possible discovery of mad cow disease in Washington state could dampen sales just as the beef industry is enjoying some of the highest prices on record and a 10 percent increase in demand since 1998.
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“All cattle people have lived in dread of this, and if it does to American cattle prices what it did to Canadian cattle prices, producers are going to go broke,” says Mike Goldwasser, a producer from southwest Virginia.
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A case of mad cow disease was discovered in Canada in May. The United States has banned live cattle imports from Canada since then, though some beef products are allowed.
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While the discovery of bovine spongiform encephal-opathy is bad for beef — including growing export markets — it could lift prices of pork and other meats if consumers seek alternatives.

“The lack of information is what is going to drive (beef) prices in the near term,” says Harry Baumes, managing director of agricultural services at Global Insight.
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The cattle industry is the largest segment of U.S. agriculture, with about 800,000 producers. In 2003, U.S. cash receipts from livestock and livestock products are expected to hit $98.3 billion, nearly half the forecast $202 billion in farm cash receipts, says analysis firm Cattle-Fax.
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A fall in prices could hurt agriculture-dependent states, particularly in the West and Southwest, that had been reaping the benefits of an improved farm economy, including a runup in beef prices. Beef retail prices in November posted the highest one-month rise in 25 years, according to federal data. Prices have fallen in recent weeks.
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Prices have been fueled by the low-carbohydrate, high-protein Atkins diet and drought-reduced supply.