November 25, 2004

 

 

US Cattle Prices Rise as Animal Cleared of Mad Cow Disease

 

Cattle prices in Chicago rose to a 16- week high after the US found no evidence of mad cow disease from an animal suspected of having the ailment. This is the third false alarm since the first case was reported in December.

 

The test results may help the government's bid to revive $3.8 billion in annual US beef exports, which collapsed 11 months ago. The US Department of Agriculture said yesterday a more reliable test than the initial screening found the sample negative for bovine spongiform encephalopathy, or BSE.

 

"The confidence of the public in the integrity of the beef supply will be confirmed,'' said Donald Selkin, director of research for New York-based Joseph Stevens & Co., which holds cattle futures. "It's starting to become like the little boy who cried wolf, and USDA should only announce positive test results.''

 

Cattle for February delivery rose 2.1 cents, or 2.4 percent, to 89.95 cents a pound on the Chicago Mercantile Exchange, the highest for a most-active contract since July 28. A futures contract is an agreement to buy or sell a commodity at a specified price and date.

 

Shares of Tyson Foods Inc., the biggest US beef producer and exporter, gained 52 cents, or 3.2 percent, to $16.63 at 2:58 p.m. in New York Stock Exchange composite trading. McDonald's Corp., the world's largest restaurant chain, rose 19 cents, or 0.6 percent, to $30.29.

 

Food Supply Is Safe
 

"All the hamburger and steak restaurants are up today,'' Selkin said. "Our food supply is very safe.''

 

The US reported its only confirmed case of mad cow disease on Dec. 23, sending cattle prices down as much as 20 percent over six weeks. The 7-year-old dairy cow was later found to have been born in Canada. Cattle futures are down less than 3 percent from a year ago.

 

Average cash cattle prices rose 4 cents to 85 cents a pound, the biggest gain in 10 months, the USDA said. Cash prices are down 13 percent over the past year during which prices reached a record high and export demand fell 85 percent from January through September.

 

Twice in June screening tests indicated the presence of mad cow disease in tissue samples from separate animals. The screenings were shown to be "false positives'' by more conclusive tests conducted at the National Veterinary Sciences Laboratory in Ames, Iowa.

 

"It's good to be honest with the public as often as possible,'' said Deb Pulford, meat department manager for Dean's Country Market, which has stores in Perham and New York Mills, Minnesota. "But there are some people who were frequent buyers of beef who are now buying less beef because of uncertainty about these tests.''

 

Sales this year are about the same as last year, Pulford said.

 

The screening tests are made by Hercules, California-based Bio-Rad Laboratories Inc. Bio-Rad's shares fell $2.94, or 5.1 percent, to $55 on the American Stock Exchange.

 

US beef exports plunged late last year after bans by more than 40 nations. The livestock industry has since rebounded as domestic beef demand climbed and trading partners agreed to resume some purchases, as Mexico did in March and Japan did last month.

 

The government is trying to determine if mad cow disease has spread in the US, using an 18-month screening program. More than 250,000 cattle are being tested out of a high-risk population of around 450,000 animals. Another 20,000 healthy animals are also being screened. Since the program began in June, 121,165 screening tests have been performed, according to the USDA.

 

The US is the world's largest beef producer. Its meatpackers slaughtered 35.5 million head of cattle last year, producing 26.339 billion pounds of beef, government figures show.