December 29, 2003


Japan May Lift Ban On US Beef if Proven Mad Cow is From Canada


Japan may lift its ban on beef imports from the United States after evidence suggested that the infected cow in Washington may have originated from Canada.


Japan, the biggest buyer of U.S. beef, and more than 20 other countries suspended imports of the meat last week after the U.S. said tests on a Holstein dairy cow slaughtered on Dec. 9 confirmed that the animal had the brain-wasting disease, the first time the illness had been detected in the U.S.


A trade team led by David Hegwood, a special adviser to U.S. Agriculture Secretary Ann Veneman, was dispatched to Japan to help preserve sales that accounted for 32 percent of U.S. beef exports in 2002. The loss of Japan, which buys $1.4 billion in U.S. beef, is significant, the U.S. Department of Agriculture Chief Economist Keith Collins said.


"The ban on U.S. beef will make beef in Japan very expensive'' and isn't in Japan's economic interest, Hurt said from West Lafayette, Indiana. "I would expect importing countries to wait a few days or weeks, allowing time to check all the leads in this case, and then resume exports.''


Tokyo Meeting


The U.S. trade team is to meet with Japanese officials on Sunday in Tokyo, Ron DeHaven, the USDA's chief veterinarian, told reporters in Washington, D.C. Japan has one of the world's strictest testing programs for mad cow after infected animals were found in its own herds two years ago.


"Japan is at the extreme end of caution when it comes to this disease,'' said Dean Cliver, a food safety professor at the University of California at Davis who served on a U.S. government advisory panel on mad cow. "I would say the U.S. is somewhere in the middle.''


The USDA, which has no national tracking system for livestock, said on Saturday that an ear tag found on the dead animal at the facility where it was slaughtered in Washington state indicated the cow came to the U.S. in 2001 as part of a herd of 74 dairy animals from Alberta.


Prior to the discovery, Hurt estimated that it would take at least six months of testing to convince importers of U.S. beef that the BSE was confined to one animal. Japan has banned imports of the meat from Canada for more than seven months after a single case was discovered in that country.


Science or Perception


"It's not just science, it's perception,'' Hurt said. "Canada has been working for seven months to try and show its disease was confined to one cow.''


During a six-month ban, the U.S. cattle industry, the world's biggest exporter of beef and related products, could expect to lose $2 billion to $3 billion, Hurt said.


The slide in U.S. cattle futures that began Wednesday may be halted today by the news that the animal that tested positive for mad cow may have come from Canada, analysts said. Futures fell 1.5 cents a pound on Wednesday and 3 cents a pound on Friday to 86.175 cents a pound. The declines were the maximum allowed under Chicago Mercantile Exchange rules.


Seoul After Tokyo


Hegwood, who helped negotiate a resumption of U.S. beef exports to Japan in May, when both U.S. and Canadian supplies were banned, is expected to fly to Seoul later this week after meeting with Japanese officials.


Japan agreed to allow U.S. beef into the country after the U.S. promised that no meat products sent to Japan would contain Canadian beef and that U.S. exporters would make that affirmation on meat labels. With that agreement in hand, the U.S. in August agreed to the resumption of some Canadian beef imports.


The team's immediate goal is to encourage Asian countries to allow the importation of 44,000 metric tons of chilled and frozen beef that already was being shipped to them in container vessels before the ban was imposed. The beef in transit is worth $135 million, he said.


Reliance on U.S. Beef


"Japan relies on our beef a lot more than it did on Canada's,'' said Chuck Levitt, a livestock analyst at Alaron Trading Co. in Chicago, who said that half of Japanese beef consumption comes from imports. "It cannot afford to drag its feet too long.''


Japan also buys much of its premium corn-fed beef from the U.S., which is fattier and thus has more flavor than range-fed beef from Australia or Brazil, Levitt said.


"It would be hard to replace our beef with anyone's,'' he said. "Grass-fed is much leaner, not much marbling, people love the taste of fat, that's why the Japanese pay a lot for that kind of beef.''

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