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Last Updated: Wednesday, 21 May, 2003, 12:27 GMT 13:27 UK
Mad cow case scares beef trade
By Theo Leggett
BBC World Service business reporter

Cattle grazing in Alberta
Canada found its first case of BSE in 10 years
Canada's multi-billion-dollar beef industry is on the verge of a full-blown crisis after a case of BSE, or mad cow disease, was found in a single cow in the western province of Alberta.

BSE has been linked to Creutzfeldt-Jakob Disease (CJD), a disease that causes paralysis and death in humans.

The United States, the biggest importer of Canadian beef, immediately suspended all shipments of cattle, beef and animal feed from Canada as an investigation got underway.

Japan and South Korea, the third and fourth largest markets for Canada's beef exports, followed suit.

Cattle country

South Korea has even extended the ban to Canadian dairy products.

Whenever we have a case of BSE... it's an issue for cattle production throughout the world
Bo Reagan, National Cattlemen's Beef Association
Meanwhile, Australia - which imports only breeding cattle from Canada - said it was banning further imports.

Canadian agriculture minister Lyle Vanclief called a nationally televised news conference to reassure the public that the sick cow had been sent to a rendering plant and had not entered the food chain.

Alberta is Canada's main cattle province, with almost 40% of the industry.

Nervous markets

Last year, Canada exported 1.7 million head of live cattle and 373,000 tonnes of beef, worth $2.5bn, to the US.

You're seeing the trickle-down not only in the cattle market but even in the stock market
Adam Packard, commodities broker

That trade is now threatened, and there are worries that people who are concerned about BSE will simply stop eating beef.

Consequently, shares in restaurant chains such as McDonald's, Outback Steakhouse and Ruby Tuesday fell on Tuesday.

Traders dealing in cattle contracts at the Chicago Mercantile Exchange have also been nervous since the news broke.

But according to Adam Packard of brokers A Packard Trading, their fears may be exaggerated.

"You're seeing the trickle-down not only in the cattle market but even in the stock market... I think that's overdone."

"I think we're going to see the market come back up on those restaurant stocks, as long as everything is confirmed it's just one cow."

Canada supplies less than 5% of McDonald's operating income, said JP Morgan restaurant industry analyst John Ivankoe.

He thinks it faces only minor problems unless public unease about eating beef widens.

'Full co-operation'

Although only one case of BSE has so far been detected in Canada, the US and other countries are taking no chances.

McDonalds restaurant
Restaurant stocks slipped on fears the public will avoid beef

An outbreak of the disease swept through herds in Britain in the early 1990s, devastating the country's beef industry and causing untold damage to the rural economy.

"Whenever we have a case of BSE, I don't care what country you're in, it's an issue for cattle production throughout the world," said Bo Reagan, a spokesman for the US-based National Cattlemen's Beef Association.

A team from the US Department of Agriculture is on its way to Alberta "to dig in and really find out all we can", he said.

He said that there was "a lot of co-operation between the US government and the Canadian government on figuring out the best way to address this issue".

If no more cases of BSE are found, then the embargo could be lifted sooner rather than later.

The BBC's Richard Forrest
"Test samples were sent to Britain, where scientists confirmed the cow did have BSE"

Canada reports mad cow case
20 May 03  |  Americas
Canada lifts Brazilian beef ban
23 Feb 01  |  Americas
Canada tackles 'mad elk disease'
26 Dec 00  |  Americas
BSE cases 'underestimated'
09 Oct 02  |  Science/Nature
Europe's BSE crisis
16 Feb 01  |  Europe
BSE linked to further CJD cases
28 Nov 02  |  Health

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