January 13, 2005

 

 

U.S. Cattle Prices Rise as Canadian Import Plan Delays

 

Cattle prices in Chicago rose to a 13 - month high on speculation that the U.S. will withdraw a plan to resume imports of beef and live cattle from Canada because of a new case of mad cow disease.

 

Canada, which supplied 5 percent of the cattle slaughtered in the U.S. in 2002, today disclosed a third case of the disease since May 2003. The U.S. said last week it plans to resume Canadian imports after a 19-month ban that reduced supplies available to beef producers such as Tyson Foods Inc.

 

Cattle futures for February delivery rose 1.325 cents, or 1.5 percent, to 91.875 cents a pound on the Chicago Mercantile Exchange, the highest closing price for a most-active contract since December 3, 2003. A futures contract is an agreement to buy or sell a commodity at a specified price and date.

 

The Canadian case of mad cow disease, known as bovine spongiform encephalopathy, or BSE, was in an Alberta beef cow born in March 1998, the Canadian Food Inspection Agency said. The infected animal was born after the U.S. and Canada banned cattle feed containing ground-up parts of other ruminants, which is how scientists say the disease is spread.

 

Confirmation that BSE has infected an animal born after the feed ban, the primary method used by the U.S. and Canada to prevent the disease, may spur calls from consumer groups for additional steps to keep the meat supply safe.

 

Under World Health Organization guidelines, Canada could find as many as 11 additional BSE cases and still be considered a "minimal-risk region'' for mad cow disease.

 

The USDA had no immediate comment on the latest BSE discovery. The only confirmed U.S. case was found in December 2003 in Washington state, in a cow traced to Canada.

 

However, U.S. ranchers said not enough has been done to ensure the animals are free of mad cow disease.

 

Reducing Cattle Supply

 

Supplies of slaughter-ready animals were reduced in the U.S. in May 2003 when a case of mad cow disease was found in Alberta and the Agriculture Department banned shipments of cattle from Canada. Canada shipped about 1.7 million cattle across the border in 2002, the department said.

 

Tyson Foods and other U.S. meat processors want the U.S. to lift the cattle ban. Springdale, Arkansas-based Tyson said last week it is reducing beef production because tight supplies of cattle have eroded profit. The ban also created a glut that has cost Canada's cattle industry C$5 billion ($4.2 billion), the Bank of Montreal said in November.

 

The latest infection in Alberta was identified through the Canadian government's surveillance program for BSE, the Food Inspection Agency said. No tissue from the infected animal reached the human food chain, it said.

 

Officials said they are trying to locate up to 120 animals that were born on the same farm and within a year of the infected animal.

 

The Agriculture Department on December 29 said it would allow Canada to resume shipments of live cattle under 30 months of age and ship beef from cattle of any age as of March 7.