Mad Cow: the Costs of Trying to Keep Costs Down

Wolf Richter's picture

Wolf Richter

“The US is one of two major beef-exporting countries with no comprehensive traceability system,” said Erin Borror, an economist at the US Meat Export Federation, which had commissioned a study to assess the implications of traceability for international markets. The other country, by the way, is India. The issue was Bovine Spongiform Encephalopathy, or BSE, more descriptively called Mad Cow Disease. Humans can contract it by eating contaminated beef. And the disease is always fatal.

BSE was the scourge of the 90s, particularly in the UK, but also in France and elsewhere. In 1992, the peak year, 37,311 cases were identified. It triggered drastic changes in the beef industry and ultimately led to comprehensive traceability programs among major exporters: Argentina, Australia, Brazil, Canada, New Zealand, and Uruguay all have them, and use them as a strategic advantage. Top import markets, such as the EU, Japan, and South Korea, also have them. But not the US. Which “places the US at risk if an animal-disease outbreak occurs in this country, or if import customers impose traceability requirements,” Borror said. That was last November.

On April 18, a truckload of cows that had died arrived at a transfer facility in Hanford, CA, on their way to a rendering plant where they would be turned into bath soap or whatever, rather than pink slime and other delectable products for human consumption. Samples were taken from a dairy cow in that batch under the USDA’s BSE surveillance system that tests annually about 40,000 high-risk cows—they have to be over 30 months old and dead.

Amazingly, none of the 30 millions cows slaughtered every year for human consumption are tested for BSE. Not only does the USDA refuse to test them, it also inexplicably prohibits companies from testing them—a handicap for exporters.

The samples were forwarded to the food safety lab at the University of California, Davis. On April 19, after the results indicated that the cow could have BSE, the samples were sent to a USDA lab in Iowa for additional tests. On April 24, the world finally learned that the US had its fourth mad cow.

Federal and state government PR machines went into overdrive. It was "atypical” BSE, result of a natural mutation, rather than the calamitous “classical” BSE associated with infected feed—which would put every cow in that herd at risk. But the USDA wasn’t sure, actually, and would send samples to labs in the UK and Canada for further testing. And of course, it never presented “a risk to the food supply or human health,” the USDA confirmed. And it remained “confident in the health of the national herd and the safety of beef and dairy products.”

Problem solved. No testing of cows destined for human consumption. No comprehensive traceability program. It saves money. But at least, the US bans the primary source of BSE: feed made from ruminants. Um, a cow can be turned into feed for chickens or pigs, and they can end up in feed for cows, which “could allow for the spread of mad cow disease,” the Consumers Union warned.

When the first BSE case in the US was discovered in December 2003, Japan, one of the largest markets for US beef, immediately blocked allimports of US beef. December 2005, under intense pressure, Japan reopened its market, but with a slew of safeguards, including a requirement that cows must be no older than 20 months (the age it considered BSE free). When an exporter violated a rule a month later by shipping a forbidden vertebral column, Japan closed its market to all US beef for seven months. When a US packer couldn’t document that the intestines in a shipment were from cattle no older than 20 months, the packer was banned for over a year. Beef jerky and other processed beef products are still banned. For how public health is intertwined with protectionism in the insular society of Japan, and for the impact that cracking open the Japanese market has had, read.... The Real Reason for Deflation in Japan.

Japan had 29 BSE cows by October 2006. But now all Japanese beef can be traced from the store to the calf, thanks to a comprehensive traceability program. Japan also tests every cow older than 20 months that is slaughtered for human consumption. If a cow is found to be infected, all cows in the herd can be immediately identified, and the meat can be traced to grocery stores around the country.

The laborious negotiations to get Japan to change its 20-month requirement to the internationally accepted 30-month limit—a big issue for US beef exporters—had been near a successful conclusion when the BSE announcement poured cold water on it.

South Korea, the fourth largest market for US beef, also banned beef imports from the US in 2003—along with China and some other countries. When Korea finally lifted the ban in 2008, street protests erupted that went on for months as people feared for their health. And now Home Plus and Lotte Mart, the second and third largest supermarket chains, pulled their US beef off the shelves to calm their worried customers. The Ministry of Food, Agriculture, Forestry and Fisheries said it would take emergency measures, including a possible halt to customs clearance—a euphemism for blocking imports from the US.

And Indonesia just banned imports from the US "until the US can assure us that its beef industry is free of any mad-cow disease,” said Vice Agriculture Minister Rusman Heriawan. “It could be one month or one year; it depends entirely on the US." And so the litany of bad news for US beef exporters has commenced, once again.

In 2011, US beef exports amounted to $5.42 billion. Losing access to some of those markets along with a BSE-inspired drop in domestic demand would be tough for the industry. But that's the cost of trying to cut costs by eschewing comprehensive traceability and large-scale testing. It's astounding that the industry and government can't trace 30 million cows in a high-tech manner though they’re eagerly tracing the minutest aspects of our behavior, movements, actions, and communications. And there are over 300 million of us. Read.... Big Brother Everywhere.

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JeffB's picture

Bummer. I had started on a very low carb diet several months ago after reading Gary Taubes' book, "Why We Get Fat: and what to do about it".  I was quite happy when the pounds started melting away while I was eating until I felt full.

But it requires substituting mostly fat for the carbohydrates, and includes a lot of meat and fish.

I had thought BSE was no longer an issue, or at least a very improbable one.

Well, someone had posted some links on an earlier article on here about self-sufficiency that I might have to give some more consideration. Our neighborhood covenants prohibit raising fowl, but rabbits might be able to hop through that loophole. I'm not sure if Easter Eggs are as healthy as chicken eggs, though.

Some Tips and Tricks on Raising Meat Rabbits

A Primer on Backyard Meat Rabbit Raising Practices

Raising Rabbits... The Site with Detailed Information and How-To's

raising rabbits - helpful suggestions for beginners

The Rabbit - Husbandry, Health and Production

But then again, I think Krugman said that readers of Zero Hedge already exhibit the symptoms of spongy brains. But what does he know? He can't even get the economics right and that's his specialty.


Whoa Dammit's picture

Most of the "all is well" studies on BSE were conducted using mice. It's not clear if mice are surseptable to the disease.

From the EU Food Safety Committee:

"The experimental evidence so far of bovine milk being safe with regard to BSE risk has been questioned because these experiments were carried out on mice; it was considered 1 that these tests may have underestimated any possible risk because of the species barrier from cows to mice. It is noted that milk had the potential to transmit prion diseases like BSE because it contains a significant component of leucocytes."

"UK law states that milk derived from BSE affected cattle or cattle suspected to have BSE shall not be sold, supplied or used for human or animal consumption, with the exception that it may be fed to the cow's own calf."

rlouis's picture

Because of the effective ban on testing here, I changed my habits years ago and seldom eat beef products; maybe 4-5 times per year.   

DeadFred's picture

I have a friend who destroyed her career trying to make a cellular model for mad cow disease. After years of effort trying to 'infect' healthy cells from infected cells she had to give up and leave research. Mad cow is an unusual case and the normal rules don't apply. The whole prion-based disease model is poorly understood and there is real debate that it is even valid. Don't trust any of the data or information given out by the authorities on mad cow disease because no one knows what is really going on. We could either be worried about nothing or else woefully underprotected, anyone's guess. The understanding of this condition makes the data on global warming look flawless.

adr's picture

Ban cattle futures trading and the problem will fix itself.

Son of Loki's picture

I thought all that radiation showering down on Cali from Fapan's Fuki meltdown would have killed any Mad Cali Cows by now.

Guess not.

Reptil's picture

hah when hiding from the IRS; diguise yourself as a (mad) cow.



Joebloinvestor's picture

Wait till Obamcare hits overload with BSE infected people, but then he won't be in office then.


The US will ignore this just like it did AIDS.

pods's picture

You might want to revisit that whole AIDS thing.


Donnie Duvanie's picture

Ship the cows by airline - that'll get them inspected. BTW, I've been eating "mad cow" infected  meat for years, and have experienced absolutely no brain damage.

donsluck's picture

Two cows in a field.

Cow 1 - "so what do you think about this mad cow disease?"

Cow 2 - "what do I care? I'm a helicopter!"

hedgeless_horseman's picture



Thanks for the article on this problem.  The solution my family has implemented is simple.  We keep a Milking Shorthorn on our pasture that we AI each year.  She provides us with healthy, inexpensive, and safe beef, milk, butter, cream, yogurt, and cheese.

Kids are smart.  After reading articles like this they absolutely want to help raise beef, and brag to their friends about it. 

donsluck's picture

Dear hedgy, please explain how a living cow can provide beef. What is "AI"?

hardcleareye's picture

AI Artificial Insemination... it means you don't have to deal with a bull in your field, (I will refrain from making male sexist comments..).....  and the beef comes from slaughtering the offspring.

falak pema's picture

what a pity a male sexist comment by a woman is always welcome. 

Ghordius's picture

oh, oh, animal husbandry! something even I can explain! ok, first you have the heifer, check. then you phone for the bull. then you, depending from the bull's temperament, either bind the heifer or the bull, then you put some soft music on...

the rest you should know, it's roughly the same as what the taxman does to you every year...

Ghordius's picture

+1 you are lucky

I knew once a girl that was waiting for a genetically modified cow small and cold-resistent enough to be kept in the fridge, next to the salad.

hedgeless_horseman's picture



Steak au poivre, potatoes roasted with rosemary, homemade bread and butter, and garden salad.

Lucky, indeed.

And before you ask, Ghordius, the wine is French.  Some intermediaries are more necessary than others.

dogbreath's picture

why would you eat bread with that

falak pema's picture

the key is the poivre sauce...and the wine to go with it.

Ghordius's picture

ok, ok, you win - and now I'm hungry... blast me, even the bread looks German-style wholegrain, dense, moist, nutricious and delicious. thanks the Deity I'm mostly vegetarian nowadays, a steak has the same impact on me as some drugs...

davood's picture

The history of "mad cow disease" or BSE in the UK is very enlightening and unknown to most people.

Under the "free market" guidance of that "Iron Bitch," contaminated cattle, i.e., those that were found to have the "mad cow disease," were rendered into hamburger meat and given to the local school children.

Guess what happened next? A lot of these kids came down with CJW!

See my comments on another ZH article about the real and manufactured cause of BSE, MCD, CJW, nvCJD, MS, CFS, etc., etc., etc.:

Bansters-in-my- feces's picture

I seen the words "Mad Cow" and I thought the article was on Janet Napoiltano.