K-State: BSE has cost industry billions in lost exports

The single case of bovine spongiform encephalopathy discovered in Washington state in late 2003 cost the beef industry $3.2 to $4.7 billion in 2004, according to a study conducted by Kansas State University's Research and Extension department.

According to the study, the U.S. immediately lost 82 percent of its export market, more than half of that from two markets, Japan and South Korea.

The study also concluded that if the U.S. had begun testing all cattle meant for export for BSE, and had that allowed the industry to reopen key markets, the net gain for the industry, even at reduced levels of export, would have been $750 million.

"According to the research, if voluntary testing of 25 percent of U.S. slaughter cattle allowed the industry to regain access to the Japanese and South Korean markets, and the U.S. was able to ship just one-half the quantity shipped during 2003, the potential return to the beef industry would have been $750 million," said Kansas Secretary of Agriculture Adrian Polansky.

Regulations imposed by USDA in the wake of the BSE case cost the industry about $200 million, the study, called The Economic Impact of BSE on the U.S. Beef Industry , estimated. The authors polled seven packers representing about 60 percent of the slaughter industry to compile the data for the estimate. The costs varied widely firm to firm, but the main costs involved the inability to process non-ambulatory cattle, the need to segregate cattle by age, and the cost of removing specified risk materials during the slaughter process. To offset the costs, packers were paying less for cattle over 30 months of age, about $10 per hundredweight. K-State estimated that the cost of not being able to process otherwise healthy downer cattle was about $63 million.