Around lunchtime on Tuesday, rumors of Bovine Sponsiform Encephalopathy findings in California sent the cattle market into a tail spin. By 1:30, live cattle were down the limit at $3/cwt. By the close of trading, and on confimration of BSE, the April live cattle futures settled at $117.125 cwt., a loss for the day of $2.675/cwt. Feeder cattle futures were also down.
The cattle market has been on a strong course prior to today's news. And tomorrow's trade should be interesting, but will depend greatly on export market reaction to the news.
"The fact the BSE case was in a dairy cow and there's no health risk may allow for some relief buying Wednesday," says Pro Farmer's Brian Grete. "But the response from U.S. trading partners and consumers holds the key to the longer-term price impact."
According to the U.S. Meat Export Federation, this latest finding will not have any impact on the United States’ "controlled risk" BSE classification through the World Organization for Animal Health (OIE) and should not affect access for U.S. beef products in international markets.
"The most important message is that U.S. beef is safe," says Philip Seng, U.S. Meat Export Federation (USMEF) president and CEO. "We are already reaching out to our trade contacts around the world to reassure them that this finding is an indication that the system to safeguard the wholesomeness and safety of U.S. beef is working. The U.S. Government is providing this same information through its channels to all of our trading partners."
Read more USDA's statement on BSE here.
In addition, the cattle industry reponded to the BSE confirmation with this statement from the National Cattlemen's Beef Association's Cattle Health and Well-being Committee Chairman Tom Talbot:
"USDA confirmed this afternoon a positive test result as part of its targeted surveillance program to test cattle for BSE. USDA has confirmed this dairy animal was discovered at a rendering facility and was never presented for human consumption and poses zero risk to human health. The bottom line remains the same – all U.S. beef is safe.
"America’s cattle producers’ top priority is raising healthy cattle. As such, the U.S. beef community has collaborated with and worked with animal health experts and government to put in place multiple interlocking safeguards over the past two decades to prevent BSE from taking hold in the United States. This effort was recognized in May 2007 when the World Organization for Animal Health (OIE), the leading international body for animal health, formally classified the United States as a controlled risk country for BSE. The controlled risk classification recognizes that U.S. regulatory controls are effective and that U.S fresh beef and beef products from cattle of all ages are safe and can be safely traded due to our interlocking safeguards.
"USDA’s ongoing BSE surveillance program tests approximately 40,000 high-risk cattle annually, bringing the total of tested animals to more than 1 million since the program began. BSE is fast approaching eradication worldwide. According to USDA, there were only 29 cases of BSE worldwide in 2011, which is a 99 percent reduction since the peak in 1992 of more than 37,300 cases.
"We commend USDA and animal health experts for effectively identifying and eliminating the potential risks associated with BSE."