New BSE Cases Will Further Delay Beef Trade

In the latest case, the animal was 50 months old. That fact is somewhat significant, since it means the cow was born well after cattle-feeding rules were changed in 1997. This change was made specifically to combat the disease, which is believed to be passed on when a cow eats certain parts of another cow that was infected with the disease. Prior to that, it was common practice to feed the bone meal from ruminant animals to other ruminants. It is believed the Canadian beef herd has been affected more than the U.S. herd because Canada imported and fed more ruminant bone meal from the United Kingdom in the early 1990s, when the disease was prevalent there.

Both the United States and Canada have pointed to these new feed rules, which ban the feeding of bone or tissue from ruminants to other ruminants, as evidence that the BSE “outbreak” in North America is under control. Most of the cows discovered to have BSE were born prior to the ban, and although we may never know exactly how the animals contracted the disease, the most likely scenario is that they ate feed that was produced before the change in feed rules that contained infected material.

There have now been a couple of cases, though, of BSE in animals born well after the change in feed rules. The likely explanation is that a feed manufacturer failed to follow the new rules. Both countries have imposed stricter rules to reduce the likelihood of further problems with infected feed. Of course, it is possible that we do not know as much as we think about how the disease is propagated in the first place, and that the animals were infected in some other way. However, given the small number of cases found, that does not seem very likely at this point.

Although the post-1997 feed rules have not been 100% effective, all of the animals found to have BSE have at least been over 30 months of age. This is significant in terms of BSE policy, because both the United States and Canada have argued that even if an animal eats feed infected with BSE material, the incubation period of the disease is so long that the animal will not actually contract BSE until it is at least 30 months old. Since the majority of cattle are slaughtered prior to this age, the countries argue that there is no reason to suspect that most of the beef produced could come from BSE-infected cows.

The age of 30 months has become a bit of a magic number in reopening beef trade, at least between the United States and Canada. Although the United States initially banned imports of all beef and live cattle from Canada after the first BSE case, trade was resumed over time: first, for beef from animals under 30 months of age; and later for live cattle, provided the cattle were under 30 months old and were to be slaughtered before they reached that age.

The recent discoveries of two BSE cases come at an inconvenient time for the Canadian beef industry, and for the U.S. Department of Agriculture, since the USDA recently proposed rules that would reopen the U.S. border to beef from animals over 30 months old at slaughter, and to live animals over 30 months of age. The further relaxing of trade rules is based largely on the level of confidence in both countries that the stricter rules for feed manufacturers have eliminated the transmission of the disease. The recent case may call that assumption into question.

The recent BSE discoveries certainly will not boost efforts to get Japan and South Korea to drop their bans on beef from the United States and Canada. These two countries were the largest overseas markets for beef prior to 2003. After years of contentious negotiations, both countries reopened their markets to U.S. beef for a short period, albeit with severe restrictions. They only allowed boneless cuts from animals under 21 months of age. Since the United States did not have a way to provide proof of age that was acceptable to Japan, the rules really did not even allow beef from any animal under 21 months.

That trade regime lasted about a month, until Japan received a shipment of beef that contained some bone material. The incident demonstrates the difficulty of maintaining a system of drastically different rules for different customers, since it appeared to be an honest and isolated mistake. Since then, it has been “back to the drawing board” with both countries. Some progress has been made toward a limited reopening of the beef trade, but the amount of beef allowed would be a very small proportion of total U.S. beef production. The countries still will not import beef from Canada, which poses a further challenge to potential U.S. beef exporters, since they must guarantee that none of the beef that is shipped came from Canadian cattle, regardless of the age.

So, after three years, the only progress that has been made is the hope of an agreement to export a tiny amount of U.S. beef and no Canadian beef. The United States and Canada may not want to admit this, but it seems clear that the only way to achieve a meaningful level of beef trade with South Korea and Japan is to agree to a system of 100% BSE testing of cattle for slaughter with the intent of exporting the beef to Japan. Ultimately, it may prove cheaper and easier to test all slaughtered cattle in order to avoid the costs associated with maintaining a segregated slaughter and distribution system.