Caledonia Argus

Local reaction: News about mad cow disease affects cattle prices

Posted: 12/30/03

By David Heiller
Argus News Editor

Houston County farmers are likely to feel the effects of bovine spongiform encephalopathy (BSE) in their billfolds and bank accounts

John Petersen, the livestock manager of the National Farmers Organization (NFO) Marketing Center in Caledonia, said that cattle prices have plummeted locally as news spread about a case of BSE (also known as mad cow disease) that was discovered in Washington state on December 23.

ìThe market has already gone down a good 10-30 percent or more just in the last two days, probably more in places,î he said on December 26.

The NFO marketing center helps farmers sell their cattle in advance, then has them shipped from a collection spot in Caledonia. ìWeíre going to have cattle Sunday that are probably $30 to $40 per hundred weight over the market value,î Peterson said.

Prices for live cattle had varied in recent months from 95 cents to $1.18 per pound, depending on the grade, Petersen said. On December 26 it was at 70 cents per pound live.

That number is not stable, he said, and it wonít be going up soon.

Farmers may be able to delay selling some animals until the market improves. But that isnít easy to do in many cases, because farms canít hang onto an animal that is ready to sell without the quality of the meat decreasing.

ìWe could go from a record profit year to a record loss year in no time,î Petersen said. He noted that the market has been fluctuating a lot in recent months, but he said there is now no reason for prices to come back up.

ìHow far it can go down, who knows?î he said. He remembers when hog prices went from 70 cents a pound to 8 and 9 cents a pound.

The only good aspect of the BSE situation in Petersenís opinion is that it happened the day before Christmas when not a lot of cattle were on hand. If news had broken a day earlier, it would have been a disaster, he said.

Government help will be a key in any recovery effort, as it has been in Canada, Petersen said, yet there is concern about who will set the prices and what those prices will be.

Farmers would be better off disposing of downed cows (cows that cannot walk), Petersen said. ìBut it has to be 100 percent nationwide,î he said, and that is unlikely to happen. ìThereís a lot of meat coming from those [downed] cows.î

Peterson said BSE shouldnít affect the food issue at all.

As for other countries not accepting U.S. beef, Petersen said that wouldnít be a problem if the U.S. did the same thing in return. But he admitted that is unlikely given the independent nature of your average farmer.

ìWe donít raise enough beef for ourselves,î he said.

Unfair media coverage?

The chances of a person getting ill from BSE, or mad cow disease as it is commonly known, are about as likely as winning the lottery, Chuck Schulte, owner of Green Power Equipment, believes.

He feels it is unfair to show images of a Holstein cow staggering and quivering on television, because it feeds peopleís fears.

The effects of that negative publicity could hurt farmers, Schulte said. ìIf it affects the livelihood of farmers, itís going to affect small town America,î he said. ìItís not so much how the farmers react, but how the consumers react.î

Jim Jennings, a local livestock dealer, said on December 26 that there is a lot of uncertainty right now for people who raise livestock.

ìRight now personally I donít know whatís going to happen. I donít think anybody really knows right now.î

He said the news could affect the corn market and milk prices too. ìPeople got to be concerned about it,î he said.

He hopes the publicís initial panic is an over-reaction, but admitted that itís a scary situation.

The Argus asked Vernon Fruechte, a Caledonia cattle producer, to comment on the situation. He responded by recalling a fact he heard when Britain was dealing with its BSE problems, that the human variant of BSE, variant Creutzfeldt-Jakob, occurred at the same rate per 1,000 people in vegetarians as it did in meat eaters.

ìI donít think thereíll be a panic,î he said. ìThe news media has a lot of hype about the whole thing.î

Humans can contract variant Creutzfeldt-Jakob disease by eating meat that contains tissue from the brain or spinal cords of infected animals. BSE has not been found in beef muscle or dairy products.

Affects all of agriculture

Veterinarian Mike McCormick of Caledonia Veterinary Service said BSE is not an issue in the Caledonia area. But he was quick to add that rational or not, dropping prices will have a big impact. ìBecause it affects both the dairy farmers and the beef farmers,î he said. ìThe dairy farmers depend on selling the cull cows and male calves for income.î

Restoring consumer confidence, especially with the foreign market, will be critical, McCormick said. Dairy, hog, and corn prices could be affected.

ìThereís quite a psychological effect and a ripple effect,î McCormick said. ìIt may not be rational, but itís there and we donít know how long itís going to last. It might be months or years.î

He feels the USDA is working hard to get to the bottom of the BSE case. ìI think thereís going to be full court press to straighten this out as fast as they can.î

He noted that the USDAís surveillance program for testing downer cows worked in this case. He also predicted that such testing would be stepped up to restore consumer confidence.

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