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Market reacts to inconclusive BSE announcement

Despite efforts by the U.S. Department of Agriculture (USDA) and other industry organizations to reassure the public of safety in the nation’s beef supply, markets dipped slightly yesterday with the announcement of an inconclusive test result for bovine spongiform encephalopathy (BSE).

In yesterday’s announcement, Animal and Plant Health Inspection Service (APHIS) spokeswoman Andrea Morgan reported that a rapid screening test produced an inconclusive result; however, the sample was being sent to the National Veterinary Services Laboratory (NVSL) for confirmatory testing, with results expected within four to seven days. Morgan disclosed few details about the inconclusive case, but stated that the animal did not enter the food or feed supply.

The finding follows two earlier inconclusive cases reported this summer, both with negative final results. However, the test result is a first since USDA announced in early August that it would require two rapid tests before announcing an inconclusive result. With two inconclusive results found, the case has caused slight alarm within the public sector — and in the markets.

Live-cattle futures at the Chicago Mercantile Exchange (CME) closed sharply lower Thursday. The December contract dropped to $84.60 per hundredweight (cwt.) by midmorning, but improved to $84.95 per cwt. by midday. Hamburger chains, meat-packaging and meat-processing stocks also fell on Wall Street.

In a teleconference Thursday, Morgan said she would not expect the finding to affect beef trade negotiations with countries such as Japan because of the response that was being taken and measures that have already been taken.

Terry Stokes, National Cattlemen’s Beef Association (NCBA) chief executive officer (CEO), said yesterday a degree of uncertainty in the marketplace is expected, as seen in previous inconclusive reports. However, Stokes said he doesn’t expect trade to be affected if the case proves to be positive for BSE.

"As we look at the impact of this inconclusive on exports, we do not expect any impact on the understanding with Japan or our negotiations with other countries," he said. "…we can ensure our consumers domestically and internationally that U.S. beef is the safest in the world. Since the case in December, we’ve taken additional steps to strengthen our food safety program, including the removal of material that could potentially carry BSE, which we call specified risk materials (SRMs), and USDA has also banned from the food supply any cattle that would appear to be high-risk. We would fully expect that with Mexico, Japan and Taiwan, and other trading partners, that based upon the science that we have in place and the interventions that we have implemented that clearly we would continue trade in the international market."

by Crystal Albers, API assistant editor

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