Market Context for BSE

The U.S. cattle and beef markets continue to be impacted by the December 2003 and June 2005 announcements of confirmed positive tests for bovine spongiform encephalopathy (BSE, or "mad cow" disease) in the United States. Discovery of the disease in the United States has focused attention on beef and cattle markets and on U.S. government actions. These cases have also underscored the importance of reliable information and analysis. USDA is providing updates on related developments, including enhanced testing, measures taken by the government to prevent the spread of BSE, and information on technical aspects. ERS monitors and analyzes cattle markets, the beef industry, food safety, and trade, providing background information and research for perspective on recent events.

ERS Market Information and Analysis

• Beef and cattle industry background data on production, prices, and trade are assembled on a single web page for use by journalists and others looking for perspective on the markets.
  
  
• The monthly newsletter Livestock, Dairy, and Poultry Outlook contains current market situation and outlook for the cattle industry. The January 2004 issue covers the market impact of the discovery of BSE in the United States. The June-August 2003 issues include analyses accounting for the discovery of BSE in Canada.
  
  
• Cattle Briefing Room covers conditions and events that influence supply, demand, trade, and prices in domestic and global cattle and beef markets.

• Animal Production and Marketing Issues Briefing Room: Animal Care and Food Safety provides information on animal health as it relates to food safety and meat production.

• Briefing rooms on hogs, poultry and eggs, and dairy provide information on animal proteins competing with beef.

Other Topical Resources

Each contains a compilation of analyses by ERS economists on the topic, and provides links to reports, articles, monographs, and data:

Policy, Economics, and Food Safety

• Food Safety
  

Global Markets

• European Union
• Japan
• NAFTA, Canada, and Mexico
• South Korea

Recent ERS Reports on Related Issues

• An Economic Chronology of Bovine Spongiform Encephalopathy in North America examines the economic issues and impacts associated with the cases of bovine spongiform encephalopathy (BSE, or mad-cow disease) in Canada and the United States.

• Economic Impacts of Feed-Related Regulatory Responses to Bovine Spongiform Encephalopathy demonstrates that the economic effects of policy amendments responding to animal and poultry disease outbreaks can be greater and longer lasting than the immediate effect of the disease outbreak alone.

• Food Traceability: One Ingredient in a Safe and Efficient Food Supply describes the results of an investigation into the amount, type, and adequacy of traceability systems in the United States, focusing on the cattle/beef, fresh produce, and grain sectors. The investigation finds that these systems vary across industries as firms balance the private costs and benefits to determine the efficient level of traceability. For the full report, see Traceability in the U.S. Food Supply: Economic Theory and Industry Studies.
  
  
• Country-of-Origin Labeling: Theory and Observation examines the economic rationale behind the various claims about the effect of country-of-origin labeling and indicates that mandatory country-of-origin labeling would likely generate more costs than benefits. Voluntary country-of-origin labeling is an option, but food suppliers have generally discounted the U.S. label as a quality attribute that can attract sufficient consumer interest.
  
  
• Savvy Buyers Spur Food Safety Innovations in Meat Processing finds that the market incentives that motivate private firms to invest in food safety innovation seem to be fairly weak. Results from an ERS survey of U.S. meat and poultry slaughter and processing plants and two case studies of innovation in the U.S. beef industry reveal development of a number of mechanisms to overcome that weakness and to stimulate investment in food safety innovation. For the full report, see Food Safety Innovation in the United States: Evidence from the Meat Industry.
  
  
• International Trade and Food Safety: Economic Theory and Case Studies examines the relationships between food safety and international trade and analyzes examples from the meat and poultry, produce, food and animal feed crop, and seafood sectors.
  
  
• Food Safety and Trade: Regulation, Risks, and Reconciliation provides context for navigating differences in food safety regulations and standards among countries while maintaining food safety and trade volumes.
  
  
• Differences in Demand Help Shape Meat Trade looks at demand for meat across countries and identifies consumer preferences that influence which meat cuts are traded and where. These preferences, rather than production competitiveness, seem to influence meat trade. A longer report, Structure of the Global Markets for Meat, provides further information.
  
  
• Interstate Livestock Movements data product provides a current national picture of interstate movements of cattle, hogs, and sheep. A better understanding of livestock shipping patterns helps in characterizing the livestock sectors, estimating the economic effects of major disease outbreak, and assessing marketing issues.
  
  
• Weighing Incentives for Food Safety in Meat and Poultry examines market mechanisms such as increased product branding and stricter requirements by large buyers. These, measures, along with Federal regulations requiring preventative controls and bacterial testing, are addressing food safety issues.

• Traceability for Food Marketing and Food Safety: What's the Next Step? (pdf) examines how food suppliers and government each have several motives to document the flow of food and food products through production and distribution channels—and to differentiate foods by characteristics and source.
  

• Dissecting the Challenges of Mad Cow and Foot-and-Mouth Disease (pdf) summarizes differences and similarities between "mad cow" disease and foot-and-mouth disease and presents some of the estimated economic impacts and implications. Simultaneous presence of the two diseases in the U.K. caused confusion among consumers worldwide about these diseases and their interrelationships.