USDA: Under-30-Mo Cattle Should Satisfy Japan BSE Fears

WASHINGTON (Dow Jones)--U.S. Department of Agriculture Secretary Mike Johanns said Thursday that U.S. cattle younger than 30 months old should be good enough for safe beef trade with Japan, rejecting some of Japan's mad-cow concerns.

Currently, the U.S. has offered a special mad-cow disease testing concession to Japan, agreeing to ship U.S. beef only from cattle younger than 21 months old if Japan lifts its ban.

However, Johanns said he is hoping to raise the age restriction.

"The science is very, very clear that in animals under 30 months you just don't have a (mad-cow disease) problem," Johanns said in response to a question about whether he would push for Japan to open its market to U.S. beef from cattle younger than 30 months.

"The science is very, very clear here that this is a very safe product, so obviously we hope to continue to open up the marketplace," he said.

Earlier this month the U.S. government sent a document to Japan's Food Safety Commission urging "Japan to move even further toward harmonization with international practice by raising the minimum age limit for (bovine spongiform encephalopathy) testing" to younger than 30 months old.

Such a shift, U.S. industry analysts agree, would allow the U.S. to ship more beef to Japan when the country eventually eases its ban on U.S. beef.

Johanns said Thursday that the USDA "feels very strongly that science is on our side."

U.S. and Japanese negotiators released what they called "a framework agreement" in October 2004 to lift the Japanese ban on U.S. beef so long as it came from cattle younger than 21 months old.

But that was a special concession the U.S. made only for Japan. The USDA is agreeing to certify that beef shipments to other importing countries will come from cattle younger than 30 months old.

Taiwan recently agreed to lift its ban on U.S. beef from cattle younger than 30 months of age, and USDA is negotiating to get South Korea to do the same.

However, Japan has alleged that it detected mad-cow disease in two cows younger than 30 months old.

The U.S., in the document sent to Japan's Food Safety Commission this month, questioned Japanese science that showed the two cows - 21 and 23 months old -contracted mad-cow disease.

"It is important to point out ... that the international scientific community has not confirmed these findings," the U.S. said in the document and urged Japan to share its scientific data on the cows.

-By Bill Tomson; Dow Jones Newswires; 202-646-0088; bill.tomson@dowjones.com

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Active vaccine prevents mice from developing prion disease

13 May 2005

NYU School of Medicine scientists have created the first active vaccine that can significantly delay and possibly prevent the onset of a brain disease in mice that is similar to mad cow disease. The new findings, published online this week in the journal Neuroscience, could provide a platform for the development of a vaccine to prevent a group of fatal brain diseases caused by unusual infectious particles called prions.

Although no cure for these diseases -- which include scrapie, mad cow disease, and chronic wasting disease -- is on the horizon, many research groups in both the United States and Europe are working on prion vaccines. But the NYU study is important because it breaks new ground in demonstrating that active immunization can protect a significant percentage of animals from developing symptoms of prion disease, explains Thomas Wisniewski, M.D., Professor of Neurology, Pathology, and Psychiatry, and the lead author of the study.

The vaccines that provide active immunization are made, in part, from proteins found on disease-causing organisms. In response to these proteins, the animal's immune system produces antibodies that will destroy them any time they appear in the body. Most vaccines in use today provide such active immunization. The prion vaccine developed at NYU would most likely first be used to protect livestock, since most prion infections occur in animals and are thought to be transmitted orally, explains Dr. Wisniewski.

The version of prion disease that affects humans usually occurs spontaneously, and only rarely as a result of eating contaminated meat. "The potential use for a prion vaccine in humans is still theoretical," says Dr. Wisniewski. "But if, for example, there is ever a more significant outbreak of chronic wasting disease and if this disease were found to be transmissible to humans, then we would need a vaccine like this to protect people in hunting areas."

Currently, an outbreak of chronic wasting disease is occurring in some Western states, and the disease's geographic range is expanding. Two cases in wild deer have recently been reported for the first time in New York State, according to the New York State Department of Environmental Conservation.

First mucosal prion vaccine The NYU study is also the first to use a mucosal prion vaccine, given by mouth rather than through the skin, which localizes the initial immune response to the gut and mainly stimulates an antibody response, says Dr. Wisniewski. "By giving our vaccine orally, we're stimulating an immune response mainly in the digestive tract," he explains. "Thus, harmful prions in contaminated food will be destroyed in the gut and will not reach other organs in the body."

Because the research was conducted in normal mice, the NYU researchers say it will be easier to apply in animals in the wild, which are at risk for developing prion disease. Prion disease is contracted when an animal eats the body parts of other animals contaminated with prions. What makes these infectious particles unusual is that they are proteins that have the same amino acid composition as equivalent proteins occurring naturally in the body. But the prions turn deadly by changing shape.

These "misfolded" proteins tend to aggregate in toxic, cell-killing clumps. As an infection takes hold, prion proteins invade brain tissue and force normal proteins to adopt their configuration. In time, the diseased animal develops dementia, loses control of its limbs, and eventually dies. There are no treatments for prion-related diseases, and prions can easily infect the body because they do not elicit any immune response.

To create a vaccine that could rally the immune system of mice, the NYU researchers designed a vaccine in which scrapie prions were attached to a genetically modified strain of Salmonella. This bacterium is also used in several animal vaccines and in human vaccines for cholera and typhoid fever. Among mice vaccinated prior to prion exposure, approximately 30% remained alive and symptom-free for 500 days, according to the study.

By comparison, mice that didn't receive the vaccine survived only an average of 185 days, and all were dead by 300 days. The NYU scientists are in the process of redesigning the vaccine for deer and cattle. After choosing the appropriate bacteria for each vaccine, they must genetically modify it to carry the prion protein. "These technical issues are not major hurdles," says Dr. Wisniewski. "Developing a marketable vaccine for livestock is something that is very achievable."

The authors of the new study are: Fernando Goñi, Elin Knudsen, Henrieta Scholtzova, Joanna Pankiewicz, Einar M. Sigurdsson, and Thomas Wisniewski of the NYU School of Medicine; Fernanda Schreiber and Jose Alejandro Chabalgoity of the University of Uruguay; Richard Carp and Harry C. Meeker of the New York State Institute for Basic Research in Developmental Disabilities, New York City; David R. Brown of the University of Bath, United Kingdom; and Man-Sun Sy of Case Western Reserve University School of Medicine, Cleveland, Ohio.

Contact: Pamela Mcdonnellpamela.mcdonnell@nyumc.org212-404-3555New York University Medical Center and School of Medicinehttp://www.med.nyu.edu

This article has been provided in accordance with Title 17 U.S.C. Section 107. This material is provided without profit for research and educational purposes. Prior to republication of this material in its entirety we recommend contacting the source for appropriate permissions. Alternatively, publication of an abstract with a link to the originating source page to see the full text is generally allowed.

Cattle MMP: Perceived Benefits Of Border Closure Outdistanced By Economic Shortfalls

Seasonality stormed the market in late-March. Purchasing competition was fierce at month’s end among packers which helped to drive prices higher. It derived from the need to prevent inventory stock-outs and ensure fulfillment of seasonally increasing retail beef orders. A win for feeders as it generated an additional $5-7 in the northern dressed market with sales occurring at $152-3. Southern feeders proved reluctant traders; agreements were delayed until Friday at $92-3 – off several dollars from the previous day’s trade in the north but still several dollars better than the previous week. April’s first week of business subsequently saw both sides biding time. That wait-and-see mentality postponed trade for both regions until Friday. The outcome proved disappointing for cattle feeders as prices were well below asking prices earlier in the week ($95). The market settled largely at $90.

Despite lower prices last week, March was friendly to the market and, as mentioned, stems directly from seasonally improved wholesale demand. The light-Choice cutout began March by reversing a downward slide of nearly $7.50 during the last half of February. And along the way the light-Choice cutout also established new highs for 2005, much of which has been driven by surging middle meat prices. Mid-March’s Choice box price neared $157 with the past several weeks seeing values wavering between $152-5. The surge in demand has also inflated the Choice-Select spread to over $10 versus a $2-3 differential at the beginning of March.

Even with improved beef interest packers seemingly can’t catch a break. March’s ending week saw both stronger live values and softening boxed beef prices; as such, packers found themselves on the wrong side of the margin equation from both the buy and the sell. Packers managed to return the favor last week; feedyards were pinned down while the wholesale market found some renewed support. Even still it wasn’t enough to bail out the packer – the week’s operating margin still proved negative. That’s an ongoing burden: my estimates place average packer margin losses for the year at $28/head. That fact has played upon the beef complex; most notably, federally inspected slaughter for March averaged 26,000 head fewer per week than 2004.

Feeder cattle prices continue to be nothing short of phenomenal! Yearling prices began January well above last year’s level. Moreover, following a contra-seasonal pattern similar to 2003 and 2004, feeders have worked even higher as the year has progressed with sizeable advancement during the past five weeks. Meanwhile, March’s fed market averaged nearly $92. That surge has allowed feedyards some reprieve from negative closeouts; for the time being closeouts are generally breakeven-or-better. Comparatively, last month’s market of $87-8 placed closeouts at $50-60/head in the hole. Improved profitability has subsequently been allocated to the swap and supporting the feeder market. Looking forward, though, expensive replacements could create a period of prolonged negative breakevens, especially if the fed market disappoints as we transition into summer.

The late-spring / early-summer period is always critical for the market; May and June often dictate market tone for the ensuing months. The feeding sector’s ability to work through relatively large supplies of calf feds and subsequent questions of currentness regularly weigh on market psychology during this time of year. 2005 is no different. However, this year also possesses several other factors of critical importance – the heart of which surrounds consumer behavior. The unanswerable question at this point: how will rising fuel prices affect purchasing behavior during beef’s peak demand season? Moreover, the long-term outlook relative to rising oil prices, discretionary income and consumer attitudes is also concerning. The Gallup News Service (March 29) explains:

…there has been a sharp increase in the percentage of investors who feel today’s higher energy prices are likely to be permanent. In March, more than three in four investors say they believe that the rise in gas prices is a permanent change and not just a temporary fluctuation – up from 56% in May 2004. This change in perspective suggests that many consumers may begin adjusting their buying preferences, as well as their overall spending, with an eye toward a long-term decrease in the level of their disposable income.

That scenario does not bode well for beef demand. From a supply perspective it also hampers efforts to minimize production costs.

That being said, market uncertainty is amplified by current litigation surrounding Canadian trade. And until the issue is resolved and trade normality is reestablished, opportunity costs will continue to mount for the U.S. beef complex. Perceived benefits of border closure are largely outdistanced by industry-wide economic shortfalls. Over the short run, trade barriers may benefit the commercial cow/calf sector; over the long run, though, absence of international trade proves to be detrimental for the industry. Clearly, the past several years have proven to be very profitable for those who run commercial cows and ongoing border closure helps to extend that event. However, that strategy is not sustainable and self-defeating. The remainder of the industry, much of which includes “U.S. cattle producers”, finds itself challenged by the current business environment (see MMP: 12/10/04). Moreover, the current week-to-week operating environment makes long-term business plans difficult to facilitate - financial pro formas are impossible to develop with any confidence.

Given those realities, R-CALF’s injunction limiting Canadian trade is troubling. The organization’s leadership touts itself as representing “thousands of U.S. cattle producers on domestic and international trade and marketing issues [while being] dedicated to ensuring the continued profitability and viability of the U.S. cattle industry.” An effort to limit trade, though, relinquishes their commitment to common good. Hence, the mission statement is disingenuous: single-segment, geographically-centric, scientifically-unfounded policy directly opposes the stated priority of supporting the viability of the industry as a whole.

Economic freedom is a critical foundation of prosperity. Voluntary exchange and the absence of unsubstantiated restrictions enable all participants to be better off. With reference to international trade, authors Gwartney, Lawson and Clark explain (The Independent Review, Spring, 2005):

In our modern world of high technology and low costs for communication and transportation, freedom of exchange across national boundaries is a key ingredient of economic freedom…Of course, exchange is a positive-sum activity: both trading partners gain, and the pursuit of the gain provides the motivation for the exchange. Thus, freedom to trade internationally also contributes substantially to our modern living standards.

The irony is that R-CALF’s current stance on foreign trade is inherently conflicted. The association opposes forward contracts and inter-segment marketing agreements preferring for its members to maintain status quo - doing business within an adversarial and fragmented operating environment. Yet their current litigation increases uncertainty and delays onset of reduced market volatility (MMP: Jan ‘05). Maintaining trade disruption and prolonging the heightened level of operating risk will serve to only accelerate movement away from segmentation in favor of increased synchronization within the industry (MMP: Feb ’05).

R-CALF, and its cohort OCM (Organization for competitive Markets), remain tediously focused on packer-producer inequity and desire to fold that concern into every issue. That mantra, though, is tired and inept. R-CALF and OCM, to maintain relevance, would be well served to broaden their perspective while becoming more objective relative to shifts in commerce. The food retailing business has undergone tremendous transformation causing change throughout the entire beef complex; much of which includes increased synchronization and consolidation at all levels. That’s not unique. March’s Harvard Business Review cogently illustrates that reality, present in many industries including food production, is inevitable and requires adaptive, competitive strategies.

You’ve heard the term oligopoly – a market with a small number of sellers. An oligopsony may be less familiar – that’s a market with few buyers…But what happens when a company is in both an oligopoly and an oligopsony? It’s an increasingly common situation [in all industries], and one for which [author Steve Hannaford has] coined the term oligonomy…The most notorious oligonomy player is Wal-Mart. Economists have traditionally focused on the power of oligopolies to set high prices, whether through collusion or silent agreement. Most [mergers and acquisitions] of the past decade have aimed at building oligonomies, which are well protected from the extremes of business cycles since they can adjust costs as well as prices…As industries from steel to hotels to toys concentrate further, most businesses will at some point feel the hot breath of an oligonomy on their necks. How they deal with that threat will determine whether they survive.

The industry remains distracted by the dark cloud of R-CALF’s injunction. And meanwhile, the U.S. beef industry’s competitive advantage is increasingly threatened by foreign infrastructure investments (Canada and Australia), competing protein sources (pork and chicken) and the current economic environment (inflationary pressures and rising interest rates). Continuation of gains realized over the past decade mandates the beef industry maintain customer focus with ensuing energy dedicated to creativity, market growth and alignment of industry-wide incentives. Protectionism undermines that endeavor. Fear of transition and/or competition cannot serve as an excuse for, nor rationalize, narrow-minded, incremental thinking which proves regressive.

Economic impact of BSE still playing out, says economist

By Sandi Alswager Karstens
University of Nebraska IANR

5/25/2005, 2:07 PM CDT
Closed border may mean less money in the long run

LINCOLN, Neb. -- Two years after the North American beef industry was rocked by BSE's arrival, the economic impact continues to play out, University of Nebraska-Lincoln specialists say.

The discovery of bovine spongiform encephalopathy in a cow in Canada in May 2003 led the US to shut down imports of Canadian cattle. Seven months later, a BSE case was discovered in Washington state, which led to a loss of most US beef export markets.

Different sectors of the US beef industry have been affected very differently by the discoveries of mad cow disease. US meatpackers that rely on Canadian imports to meet their processing capacity have been hard hit. A Kansas State University estimate is that 5,000 American meatpackerslost their jobs in the last two years as Canadian imports dried up.

Some US cow-calf producers may see Canada's woes as helping their situation. In the short term, that may be so, but the long-term outlook is less certain, said Dillon Feuz, UNL agriculture marketing specialist at the Panhandle Research and Extension Center at Scottsbluff.

The bottom line, Feuz said, is that all sectors in the beef industry are best served by a robust, open trade environment. From 1998 to 2002, the last full year before BSE was discovered on this continent, open trade benefitted the U.S. economy significantly, as the nation annually imported $3.7 billion in cattle, beef and byproducts and exported $5.1 billion.

That's a $1.4 billion annual trade balance in the black.

"This added value from international trade likely increased the value of commercially slaughtered cattle slightly more than $40 per head, or more than about $3 per hundredweight," Feuz said. "If fed cattle were worth $40more as a result of trade, then a 550 pound steer was likely worth about $7 more per hundredweight as a result of international trade from 1998-2002."

That $1.4 billion overall annual trade surplus from US beef trade was divided among various sectors of the industry.

"To suggest that none of that $1.4 billion trade surplus found its way back to cow-calf producers in the form of higher calf prices would be incorrect," Feuz said.

If US packers continue to contend with reduced international trade, they likely would look to regain some margin by trying to buy fed cattle cheaper, he added. And if feedlots received a lower price for fed cattle and were less profitable, they would be less aggressive in bidding for calves to enter the feedlot, he said.

"While it is tempting to try and close some borders to imports of cattle and beef, and receive a short-term economic gain, if in the long term that results in less total trade in beef and beef byproducts, I believe that would result in less dollars for cow-calf producers," he said.

"Trade does not occur in isolation. It is not likely that the US can close borders to imports of cattle and beef and still expect to be able to export beef and beef byproducts."

In addition, the US has been importing Canadian boxed beef since three months after the initial discovery of BSE in Canada, said Darrell Mark, UNL livestock marketing specialist in the Institute of Agriculture and Natural Resources.

Mark pointed out that the North American beef industry appears to be structurally changing by shifting processing outside of the US, which in the long run could put US producers at a disadvantage.

"With live cattle imports from Canada banned, imports of boxed beef have increased," he said. Canadian beef imports in 2004 were up 11 percent from the 1998-2002 average.

"And, it appears imports are increasing rapidly in 2005," he said. March beef imports were up 19 percent from the 1998-2002 average.

From 1998-2002, the US imported an average of 1.25 million head of live cattle a year from Canada, Mark said.

"The US plant capacity is built on 1.25 million head of imports from Canada," he said. "If this source of slaughter cattle is permanently reduced in the US, it will likely mean less processing lines or fewer plants. That would be particularly true for those that rely more heavily onCanadian cattle (those closest to the border)."

The impact on US processors could be permanent, as Canadianslaughter increased 12 percent in 2004 from the 1998-2002 average and capacity continues to be expanded.
In the long run, Mark said this can reduce US slaughter capacity and increase costs for cattle feeders.

"This will eventually bid into feeder cattle prices, and the cow-calf producer would see lower prices," he said.

Economics aside, lifting the ban on live Canadian beef imports would not increase the risk for introducing BSE to US cattle, said David Smith, UNL dairy/beef veterinarian.

"Few if any BSE-infected cattle will be imported from Canada because the disease is so rare," he said. "Even if infected cattle were imported, there is nearly no opportunity for BSE to spread into the US cattle herd because the disease is not transmitted directly from animal to animal.

"Infected cattle arriving from Canada would be young and unlikely to have developed infective tissue, and the US has taken actions that prevent cattle from being exposed to infective proteins," he said.

This article has been provided in accordance with Title 17 U.S.C. Section 107. This material is provided without profit for research and educational purposes. Prior to republication of this material in its entirety we recommend contacting the source for appropriate permissions. Alternatively, publication of an abstract with a link to the originating source page to see the full text is generally allowed.

Time is ripe to resume imports of U.S. beef

The Yomiuri Shimbun

Now that Washington's measures against mad cow disease have come close to meeting the conditions set by Japan for the resumption of beef imports from the United States, the Food Safety Commission should swiftly reach a conclusion on the issue.

The Agriculture, Forestry and Fisheries Ministry and the Health, Labor and Welfare Ministry asked the independent commission on Tuesday to discuss whether the country should maintain its import ban. To enable Japan to reopen its market to U.S. beef, it is essential the panel determine that U.S. beef is as safe as Japanese beef. A group of experts on the commission will shortly begin examining the case.

The import ban has been in place for 1-1/2 years following the discovery in December 2003 of the first U.S. case of mad cow disease, also known by its scientific name of bovine spongiform encephalopathy (BSE).

The United States has strongly called for an early resumption of beef shipments to Japan on a number of grounds, including that the BSE-infected cattle had been imported from Canada. Japan has refused to comply with Washington's request because the United States does not blanket test slaughtered cattle for BSE.

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Relaxation of testing

Earlier this month, the Food Safety Commission recommended Japan's BSE testing system for slaughtered cattle of all ages be revised to exclude those slaughtered at 20 months of age or younger. The panel based its recommendation on the fact the youngest cattle found infected with BSE in Japan was 21-months-old.

The commission was originally expected to take only two or three months to make its recommendations, but the process took more than six months. The delay can be attributed to the experts group only meeting on average once every three weeks and requests for substantial volumes of documents by some members of the panel.

The commission should refrain from repeating the unjustified delay in its discussions on the matter. The experts group should aim to conclude its debate as early as possible by holding comprehensive and intensive discussions as required.

With a change to Japan's testing system, it will become much easier to resume imports of U.S. beef.

Officials in Japan and the United States share a view that it is sufficient to check the quality of meat to verify the safety of cattle slaughtered at 20 months or younger that may not have been tested for BSE.

To meet Japan's safety requirements, the United States has promised to remove the brain, spinal cord and any other specified risk materials from cattle slaughtered for export to Japan.

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International shift

Given these facts, the agenda before the Food Safety Commission experts group have effectively been resolved in inter-governmental negotiations and other bilateral discussions.
The World Organization for Animal Health (OIE), which sets international safety standards for livestock, is likely to make a decision within the week to allow the trade of boneless beef without restriction.

Although the OIE's decisions are not binding on signatory countries, they can serve as criteria for settling trade disputes at the World Trade Organization. In other words, Japan's policy of permitting imports of beef depending on the age of cattle could become the focus of a WTO dispute if a trade complaint was filed against Japan.

Japanese officials involved in the beef issue should decide taking such an international move into consideration when deciding their policy.

Vaccine may prevent mad cow disease

Excerpt...

New York, NY, May. 13 (UPI) -- U.S. scientists said studies in mice indicate a vaccine they developed may stave off mad cow disease and similar disorders.

Approximately 30 percent of mice that received the vaccine remained alive for 500 days after exposure to a mad cow-like disease, researchers from the New York University School of Medicine reported in the journal Neuroscience. In contrast, all of the mice that were not vaccinated were dead by 300 days after exposure to the disease.

This category of diseases includes mad cow, scrapie in sheep, chronic wasting disease in deer and elk and Creutzfeldt Jakob disease in people. All are incurable and fatal. Scientists think they are caused by an abnormal protein called a prion.

...for complete article, please visit The Washington Times.