Will there be economic ripple effects of BSE throughout U.S. agriculture and what will they be?
A. The discovery of this one BSE case in the United States will affect the livestock industry, but not necesarily other agricultural sectors. The major effect will be on the meat-processing plants, because they will have to change and/or eliminate some of the industrial processes. For example, air-injection stunning has just been prohibited, as well as the selling of the small intestine. The biggest first-round impact is lower cattle prices and lower farm income for cattle producers. The prices prior to the BSE event were very high and this has brought thme back into the normal range. There will be some short-term impacts related to the increased availability of beef in the U.S. domestic market and the lower price of beef to producers. The lower price of beef will mean less consumption of other meats in the next few months. Over the next year, the lower price of cattle will cause some adjustments to cattle culling rates and herd build up. It may also reduce the demand for cattle feed.
