040324 Beef Production Down After Mad Cow Case

March 10, 2004

Washington - Projections of U.S. beef production for the year are down following the discovery of the nation's first case of mad cow disease, while bird flu is reducing U.S. poultry exports, the Agriculture Department said.

The nation will produce about 25.3 billion pounds of beef this year, the department said. The March projection is 204 million pounds below the February estimate of the year's beef production.

"The pace of slaughter, especially cow slaughter, in the first quarter has been slower," the department said.

The department had removed some cattle from the human food supply after it announced in December that America's first case of bovine spongiform encephalopathy, or BSE, had been found in a Holstein in Washington state. The banned animals, known as "downers," which cannot stand at slaughter, are considered to have a higher risk of the brain-wasting disease. Their meat commonly had been processed into hamburger, as was the case with the infected Holstein in Washington state, slaughtered Dec. 9.

The one case of mad cow forced a recall that totaled 38,000 pounds of ground beef because the cow's meat had been mixed with the meat of other cattle. People who eat meat with the protein that causes mad cow disease can contract a similar rare but fatal disease, variant Creutzfeldt-Jakob disease.

The department also said that winter weather cut into beef production. Cattle typically do not gain as well in the cold because they have to use more of the energy they get from their food to keep up body temperatures.

Although the beef production estimate had fallen, USDA said demand for beef was firm, helping to support prices, predicted to remain in the range of $74 to $79 per 100 pounds of meat.

Avian influenza, meanwhile, is cutting into the export of broiler chickens, because of bans imposed on U.S. exports by about 35 other countries, the department said. The March projection is for exports of almost 5.3 billion pounds, down 320 million pounds from the February estimate.

Based on previous experience with bird flu, the department expected the impact on exports to diminish as nations that refuse poultry from the United States would scale back to ban only exports from regions with bird flu. The disease has been found in flocks in Texas, Pennsylvania, Maryland and Delaware.

The department projected little change in broiler chicken prices, at 69 to 73 cents a pound, a one-cent increase.

The department raised its pork production estimate by 174 million pounds, to 20.1 billion pounds, based on larger-than-expected first quarter slaughter.

The department said imports from Canada slackened in the first quarter, but it forecast that the pace will pick up in the second quarter. The U.S. hog industry complains that Canadian subsidies allow Canadian producers to dump hogs into the United States illegally at below-market prices. The National Pork Producers Association has filed a petition calling on the federal government to impose tariffs on the imports. The department projected hog prices of 39 to 41 cents per 100 pounds, a one-cent increase.


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