040402 USDA Mad Cow Rules Cost Industry $150M

April 7, 2004

Washington - The U.S. government's plans to make beef safe from mad cow disease could cost the industry up to $150 million a year, the Agriculture Department said on Wednesday and indicated it was open to amending the proposed rules.

After finding the first and only U.S. case of mad cow disease in December, the USDA issued a series of interim rules to further protect food from the brain-wasting disease.

Industry, consumer advocates and other interested parties were invited to comment on the rules before USDA finalizes them later this year. On Wednesday the USDA extended the comment period to May 7 from April 12.

"We will review the public comments ... and make a decision as to if the rules can stand or if we ought to modify these rules," said Matt Baun, spokesman for USDA's Food Safety and Inspection Service.

Baun said the comment period had been extended to give parties time to consider the economic impact of the rules.

Among the rules imposed in January to prevent the spread of bovine spongiform encephalopathy, or BSE, was a ban on the use of so-called downer cattle in food. These are animals either too sick or too injured to walk.

The USDA also issued stricter measures to ensure tissue from the nervous system, like the spinal cord, do not contaminate meat produced by hydraulic pressure equipment, also known as advanced meat recovery systems.

In a report published on Wednesday, the USDA estimated these two regulations would cost the industry up to $150 million annually.

The costs will "not significantly impact" U.S. retail beef prices, since the prohibited meat represents a very small fraction of total production, the USDA said.

"Price impacts are expected to be limited to beef by-products and variety meats which constitute a small share of domestic beef consumption," USDA said.

The USDA estimated about 213 million pounds of beef will be affected by the rules annually. Total U.S. beef output this year was pegged at 25.28 billion pounds.

Out of the 35 million cattle slaughtered annually, about 200,000 of those are downers.

Most of the prohibited beef will be used for non-food purposes, like animal feed, the USDA said.


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