February 2, 2004

 

 

US Meat and Bone Meal Industry Crippled In Mad Cow Aftermath
 

Export demand for US meat and bone meal was crippled with prices falling 50 to 70 percent since the announcement of the mad cow disease case in the United States, feed industry sources said.

 

Prices for meat and bone meal, a protein additive used in livestock feed, have fallen from around $270 a ton in the U.S. Midwest in mid-December, before mad cow disease was found in a Washington state dairy cow, to below $100 this week, according to dealers and U.S. Department of Agriculture market reports.

 

"That's a pretty dramatic drop. It is reflective of the fact that we are not able to export any of our meat and bone meal, so we're having to absorb that," said Tom Cook, president of the National Renderers Association.

 

Meat and bone meal is made from the ground-up carcasses of cattle, hogs and other livestock animals. Processed at rendering plants into a powder, it is used as a source of protein in livestock feed and pet food, and as fertilizer.

 

The material is associated with mad cow disease because scientists believe the illness spreads in cattle through feed made with bone meal or other products derived from sick cows.

 

For that reason, U.S. regulators banned bovine-based meat and bone meal from cattle feed in 1997. However, the material is still allowed in hog and poultry feed and in pet food.

 

This week the U.S. Food and Drug Administration stiffened its 1997 ban, adding blood, poultry waste and restaurant "plate waste" to the list of items forbidden in cattle feed.

 

As a result, prices for blood meal, used in feed rations for calves, have also plunged.

 

"We've seen it in the last three or four days drop from about $550 to $600 a ton down to $300 and lower," said Richard Erickson of the Labudde Group, a feed ingredient company in Grafton, Wisconsin.

 

The FDA left its meat and bone meal rules unchanged. Ingredient dealers said it did not appear that domestic users were shunning meat and bone meal after the U.S. mad cow case.

 

In fact, those who can still use meat and bone meal in feed rations have been snapping up bargains.

 

"You've got hog operations and poultry operations that are actually starting to increase their usage, with the price as cheap as it is. But so far, it's not making up for the lack of the export movement," said Steve Westfall, a merchant with St. Louis-based Diversified Ingredients.

 

Erickson said meat and bone meal prices appeared to have stabilized this week after the FDA issued its new rules.

 

"We'll probably see that price start to come back up a little bit, but not a lot until exports are opened up again," Erickson said.

 

The United States produced about 2 million tonnes of meat and bone meal in 2002, exporting about 28 percent. Before the U.S. mad cow discovery, the United States was exporting about 10 percent of its annual beef production.