Mad Cow: the Costs of Trying to Keep Costs Down

“The US is one of two major beef-exporting countries with no comprehensive traceability system,” said Erin Borror, an economist at the US Meat Export Federation, which had commissioned a study to assess the implications of traceability for international markets. The other country, by the way, is India. The issue was Bovine Spongiform Encephalopathy, or BSE, more descriptively called Mad Cow Disease. Humans can contract it by eating contaminated beef. And the disease is always fatal.

BSE was the scourge of the 90s, particularly in the UK, but also in France and elsewhere. In 1992, the peak year, 37,311 cases were identified. It triggered drastic changes in the beef industry and ultimately led to comprehensive traceability programs among major exporters: Argentina, Australia, Brazil, Canada, New Zealand, and Uruguay all have them, and use them as a strategic advantage. Top import markets, such as the EU, Japan, and South Korea, also have them. But not the US. Which “places the US at risk if an animal-disease outbreak occurs in this country, or if import customers impose traceability requirements,” Borror said. That was last November.

On April 18, a truckload of cows that had died arrived at a transfer facility in Hanford, CA, on their way to a rendering plant where they would be turned into bath soap or whatever, rather than pink slime and other delectable products for human consumption. Samples were taken from a dairy cow in that batch under the USDA’s BSE surveillance system that tests annually about 40,000 high-risk cows—they have to be over 30 months old and dead.

Amazingly, none of the 30 millions cows slaughtered every year for human consumption are tested for BSE. Not only does the USDA refuse to test them, it also inexplicably prohibits companies from testing them—a handicap for exporters.

The samples were forwarded to the food safety lab at the University of California, Davis. On April 19, after the results indicated that the cow could have BSE, the samples were sent to a USDA lab in Iowa for additional tests. On April 24, the world finally learned that the US had its fourth mad cow.

Federal and state government PR machines went into overdrive. It was “atypical” BSE, result of a natural mutation, rather than the calamitous “classical” BSE associated with infected feed—which would put every cow in that herd at risk. But the USDA wasn’t sure, actually, and would send samples to labs in the UK and Canada for further testing. And of course, it never presented “a risk to the food supply or human health,” the USDA confirmed. And it remained “confident in the health of the national herd and the safety of beef and dairy products.”

Problem solved. No testing of cows destined for human consumption. No comprehensive traceability program. It saves money. But at least, the US bans the primary source of BSE: feed made from ruminants. Um, a cow can be turned into feed for chickens or pigs, and they can end up in feed for cows, which “could allow for the spread of mad cow disease,” the Consumers Union warned.

When the first BSE case in the US was discovered in December 2003, Japan, one of the largest markets for US beef, immediately blocked allimports of US beef. December 2005, under intense pressure, Japan reopened its market, but with a slew of safeguards, including a requirement that cows must be no older than 20 months (the age it considered BSE free). When an exporter violated a rule a month later by shipping a forbidden vertebral column, Japan closed its market to all US beef for seven months. When a US packer couldn’t document that the intestines in a shipment were from cattle no older than 20 months, the packer was banned for over a year. Beef jerky and other processed beef products are still banned.

Japan had 29 BSE cows by October 2006. But now all Japanese beef can be traced from the store to the calf, thanks to a comprehensive traceability program. Japan also tests every cow older than 20 months that is slaughtered for human consumption. If a cow is found to be infected, all cows in the herd can be immediately identified, and the meat can be traced to grocery stores around the country.

The laborious negotiations to get Japan to change its 20-month requirement to the internationally accepted 30-month limit—a big issue for US beef exporters—had been near a successful conclusion when the BSE announcement poured cold water on it.

South Korea, the fourth largest market for US beef, also banned beef imports from the US in 2003—along with China and some other countries. When Korea finally lifted the ban in 2008, street protests erupted that went on for months as people feared for their health. And now Home Plus and Lotte Mart, the second and third largest supermarket chains, pulled their US beef off the shelves to calm their worried customers. The Ministry of Food, Agriculture, Forestry and Fisheries said it would take emergency measures, including a possible halt to customs clearance—a euphemism for blocking imports from the US.

And Indonesia just banned imports from the US “until the US can assure us that its beef industry is free of any mad-cow disease,” said Vice Agriculture Minister Rusman Heriawan. “It could be one month or one year; it depends entirely on the US.” And so the litany of bad news for US beef exporters has commenced, once again.

In 2011, US beef exports amounted to $5.42 billion. Losing access to some of those markets along with a BSE-inspired drop in domestic demand would be tough for the industry. But that’s the cost of trying to cut costs by eschewing comprehensive traceability and large-scale testing. It’s astounding that the industry and government can’t trace 30 million cows in a high-tech manner though they’re eagerly tracing the minutest aspects of our behavior, movements, actions, and communications. And there are over 330 million of us.

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