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Bloomberg News
– Tuesday – May 22, 2007 – 4:19 p.m. EDT
U.S., Canada Designated
`Controlled-Risk' for BSE (Update 4)
By Alan Bjerga and Daniel J. Goldstein
May 22 (Bloomberg) -- The U.S. and Canada have
been classified ``controlled-risk'' nations for mad-cow disease by the World
Organization for Animal Health, a designation that may help
revive beef exports that plummeted after outbreaks in 2003.
The Paris-based organization voted to give the two countries its
second-best safety rating for mad-cow disease risk, officials said. The
designation means measures taken to control the ailment are effective and that
U.S. beef from cattle of any age can be safely traded, U.S. Agriculture
Secretary Mike Johanns said.
The discovery of mad-cow disease in the U.S. led to the collapse of U.S.
beef exports valued at $3.8 billion and contributed to a string of six straight
losses in the beef business of Tyson Foods Inc., the world's biggest producer of
the meat. U.S. beef exports are still running at only about half the volume of
2003, according to government statistics.
``I
hope it is the start of the final chapter of what I would describe as one of the
ultimate trade distortions without science I've ever seen,'' Johanns told
reporters today in Washington.
The U.S., which slaughters about 35 million head of cattle a year, has had
three case of mad-cow disease, or bovine spongiform encephalopathy, since
December 2003, one of which was in an animal born in Canada and sent to the U.S.
in September 2001.
Feed Ban
Canada has had 10 cases since May 2003. Six of the infected animals were
born after a 1997 ban on using feed that contains ground-up cattle parts --
which scientists say is how the disease is spread among livestock -- raising
questions about Canada's enforcement of the ban.
The U.S. enacted a similar ban in 1997. In 2003, both countries required
the removal at slaughter of the brain, spinal cord and parts of the intestine,
which are thought to contain the
agent that causes BSE. The disease has never been found in muscle cuts of meat.
The improved rating by the World Organization, known as the OIE, may
persuade Japan, South Korea, China and other countries to accept U.S. beef
products and cuts of meat they have rejected since December 2003, Johanns said
during a break in trade meetings with Chinese officials in Washington.
China still refuses to accept U.S. beef from cows 30 months or older.
Johanns wouldn't speculate on whether the new OIE designation would affect beef
trade with China, South Korea or Japan.
Age Restrictions
The three Asian nations last year agreed to resume imports with limitations
on the age of the animals from which the beef is cut. U.S. trade officials are
now trying to persuade them to do away with age restrictions.
Japan
accepts only also boneless cuts of beef from animals 20 months and younger while
South Korea only allows cuts from animals 30 months and younger. Before 2004,
Japan was the biggest overseas buyer of U.S. beef, while South Korea was
number-three.
``I've always hesitated to give a timeline'' as to when markets may reopen,
Johanns said. ``I hope it's a situation where they respond very quickly.''
American Meat Institute President J. Patrick Boyle said he hopes the ruling will
``give our trading partners full confidence'' in U.S. beef exports.
``There is no doubt U.S. cattle are healthy and U.S. beef is safe,'' Boyle said
in a statement. The Washington-based AMI represents Tyson, Cargill and other big
meatpackers.
USDA Criticized
The Ranchers-Cattlemen Action Legal Fund-United Stockgrowers of America,
which sued the USDA in 2005 to halt imports of Canadian cattle, said the
department should have pushed harder for the OIE's top rating of ``negligible''
risk.
``The rest of the world knows that Canada has an inherently higher risk for
BSE than the United States, so the U.S. has basically sold itself short,'' Bill
Bullard, the chief executive
officer of the Billings, Montana-based group, said in a statement.
Overseas shipments of U.S. beef fell to 434 million pounds in 2004 from a record
2.5 billion pounds in 2003. Exports will climb to 1.52 billion pounds in 2008,
up 18 percent from an estimated 1.28 billion for this year, the USDA said May
11.
Canadian cattle and beef exports dropped to C$1.9 billion ($1.6 billion) in
2004, from C$3.9 billion in 2002, according to Statistics Canada.
The
National Cattlemen's Beef Association said 18 countries still ban U.S. beef
while an additional 86 have partial restrictions.
`Extremely Patient'
``We have been extremely patient and these continued embargoes must be
lifted,'' Gregg Doud, the association's chief economist, said in a statement.
The
OIE noted that the U.S. and Canada are not free of mad cow disease, making them
ineligible for the ``negligible'' risk designation. The body offers three
ratings for mad-cow risk, the lowest being ``undetermined.''
Canada confirmed its most recent BSE case on May 2, four months after the U.S.
said it planned to lift most of the remaining import restrictions on beef and
cattle from its northern neighbor. The U.S. said cattle from Canada pose
``minimal risk'' for spreading mad-cow disease.
Cattle futures for August delivery fell 0.825 cent, or 0.9 percent, to
92.575 cents a pound today on the Chicago Mercantile Exchange. The price is up
20 percent from a year ago.
--With reporting by Alexandre Deslongchamps in Ottawa. Editor: Enoch
To contact the reporters on this story: Daniel J. Goldstein in Washington at
+1-202-624-1863 or
dgoldstein1@bloomberg.net;
Alan
Bjerga in Washington at +1-202-624-1857 or
abjerga@bloomberg.net.
To contact the editor responsible for this story:
Steve Stroth at +1-312-443-5931 or
sstroth@bloomberg.net.
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