News report-Mad cow could cost cattlemen billions

[bumpus]

December 27, 2003
Mad cow could cost cattlemen billions

2001 projections called for 300,000 cows to be slaughtered to stop disease's spread


By The Associated Press


WASHINGTON — No American official has estimated yet the financial fallout from the first U.S. case of mad cow disease, but the Bush administration told Congress in 2001 that the beef industry could lose $15 billion.

Food-safety officials had earlier projected that as many as 300,000 cows could be destroyed if the disease spread as it did in Britain, a prospect diminished by safeguards implemented in response to the British experience with bovine spongiform encephalopathy, or BSE.

William D. Hueston, a former Agriculture Department official who directs the Center for Animal Health and Food Safety at the University of Minnesota, said Friday he wouldn’t be surprised if up to another two dozen infected cows are found in the United States.



Gregg Doud, chief economist for the Denver-based National Cattlemen’s Beef Association, said Friday that U.S. producers stand to lose at least $6 billion from export losses and falling prices.

“We’ve lost roughly 90 percent of our export market just in the last three days,” he said.

However, Doud said the notion that as many as 300,000 cattle might have to be destroyed is unrealistic since there were far more cases of the disease in Britain and the government hid it from the public a long time.

“That’s what created the crisis in public confidence,” he said. “This situation can’t be compared to anything that occurred in the U.K.”

Exports represent about $3.8 billion of the $40 billion-a-year beef industry in the United States, which also is the largest beef-consuming nation.

Keith Collins, the Agriculture Department’s chief economist, said the price declines now in store for producers will not likely go below what they were a year ago.

In March 2001, Bernard Schwetz, then the acting principal deputy commissioner of the Food and Drug Administration, briefed the House Appropriations agriculture subcommittee, drawing on what happened in the United Kingdom.

Britain’s first-year economic losses were put at between $1.07 billion and $1.4 billion, according to a report by Congress’ General Accounting Office in 2002.

[Darren]

There's no doubt folks are going to get hurt. I think most in this country will keep on eating beef, but the investors will always react. You yell fire and everyone in the crowd wants to be the first one out the door. The panic serves no one. I'm hoping the USDA is able to quickly define the extent of the problem.

My concern is that the one cow and her calves are only the tip of the iceberg since the inspection process in this country is not sufficient to catch all incidences.

[bumpus]

Originally Posted by Darren

There's no doubt folks are going to get hurt. I think most in this country will keep on eating beef, but the investors will always react. You yell fire and everyone in the crowd wants to be the first one out the door. The panic serves no one. I'm hoping the USDA is able to quickly define the extent of the problem.

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The cattle business, like any other livestock business is a large gamble every day, 24/7 365 days a year.

It takes a little while before profits will grow, but profits can fall and you can go broke in one second. Maybe even owe others money because of it.
Some owners went broke as soon as the report came out, with no way out.

Real business investors know when to buy and sell, they know business.
They now and understand the odds.
They are selling now before they loose it all.

You can live in a small apartment in a large city and own a thousand head of cattle and have no farm and make money, or loose money.

People with knowledge of the odds and know good business do it every day.
They will sell now as prices and stocks go down, wait till they believe it has hit bottom and buy cheap. Then they the will sit back and watch their investments grow as the value goes back up and it will.

You have to know when to buy them, know how to hold them, and know when to sell them to make money.

So many People did not listen to the warning signs of the other stock, and 401k crashes, and they lost millions including their life savings and retirement money, never to be made back again.

If you think buying cattle is a good investment right now go out and buy some next month, (because they will be very cheap) and see how good your profits will be.

The odds are against you making profit right now.

[Ken Scharabok]

If the consumer doesn't stop buying beef I don't think it will be that bad. About 33 million cattle are slaughtered in the U.S. today each year, so it would be about a 10% one-time blip in the market. Unlike Canada, which exported about 70% of their beef production, the U.S. exports only about 10%.

The people who will get hurt the worse are those who have cattle on feed and the future players. For most U.S. small producers it came at about the best possible time of the year as most are either calving now or will later in the Spring. If they can hold cull cows, there have a window before their calves are sold. If they put up enough hay next summer, they might even cut the bull calves, winter them over and take them to market as heavy feeders or even directly as light slaughter cattle.

When the stock market crashed the only people really hurt where those who day traded, paniced and sold out immediately or had heavy margin accounts they couldn't cover. If they just held on to what they had it would have likely gone up well in future value.

Ken Scharabok