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Mad Cow Case May Hit Firms, Cattle Trade
Reuters` ^ | December 23, 2003

Posted on 12/23/2003 5:30:21 PM PST by sarcasm

CHICAGO (Reuters) - The first case of mad cow disease in the United States, revealed Tuesday, will likely have a devastating impact on U.S. cattle prices and could pummel the shares of companies like meat packer Tyson Foods Inc.and hamburger chain McDonald's Corp. (MCD.N), industry analysts said on Tuesday.

``It is a big deal. Consumers cut back on consumption and countries, for safety reasons, embargo beef from the affected country,'' said Joe Kropf, livestock analyst with Kansas City-based Kropf and Love Consulting.

U.S. Agriculture Secretary Ann Veneman confirmed a Holstein in Washington state has tested positive for mad cow, or bovine spongiform encephalopathy (BSE). Final tests will be done by a British laboratory and could take up to five days.

If confirmed the case could drastically reverse the fortunes of the U.S. cattle industry, which is having its most profitable year in history. Livestock analysts said the single U.S. case could drive cattle prices sharply lower for days at the Chicago Mercantile Exchange, where futures contracts establish prices for U.S. cattle.

For hamburger chains the concern is whether consumers will cut back on eating beef. A consumer backlash hurt McDonald's sales in both Europe and Japan after they reported mad cow cases in recent years.

In after-market trading, McDonald's shares fell as low as $24.20 from a close of $25.28 on the New York Stock Exchange. The stock later recovered to $24.34 on Instinet.

Other restaurant shares at risk include McDonald's rival Wendy's International Inc. (WEN.N) and steak chains such as Outback Steakhouse Inc. (OSI.N) and Lone Star Steakhouse & Saloon Inc. (STAR.0), analysts said.

Oak Brook, Illinois-based McDonald's, the largest fast-food company, said that it has no links to the meat plant that processed the sickened animal.

The United States exports about 10 percent of its beef, and the loss of any foreign markets would create a glut in U.S. meat supplies.

``I assume Japan will turn off our exports immediately, as will Korea, as will basically the rest of the world,'' said Jim Robb, director of the Denver-based Livestock Marketing Information Center.

Canada's beef industry was severely damaged earlier this year when imports of its beef were banned by the United States after a case of mad cow was discovered in Alberta.

Scientists suspect that humans eating some meat or other material from infected animals could contract a similar form of the disease, known as variant Creutzfeldt-Jakob disease (vCJD). The disease has killed about 130 people over the years, mostly in Europe.

``It's huge, huge,'' said Midwest Research analyst Christine McCracken, of the mad cow case. ``It's going to have a mixed impact on Smithfield and Tyson -- both of which are relatively large beef processors. But they have very large alternative protein businesses that are likely to benefit.''

Tyson Foods of Springdale, Arkansas is the nation's largest meat company with huge beef and pork operations, and Smithfield Foods Inc. (SFD.N) of Smithfield, Virginia is the nation's largest pork producer and fifth-largest beef producer.


TOPICS: Business/Economy; News/Current Events; US: Washington
KEYWORDS: annveneman; madcow; usda
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1 posted on 12/23/2003 5:30:21 PM PST by sarcasm
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To: sarcasm
Somebody got jealous of Adkins Diet Success. (hey, it's my consipiracy theory - and I'm sticking by it)
2 posted on 12/23/2003 5:31:27 PM PST by PokeyJoe (Help your democRAT brothers. Vote for Sharpton in the democRAT primary of your state.)
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To: PokeyJoe
we should move farming offshore its cheaper and cows are not as mad
3 posted on 12/23/2003 5:33:14 PM PST by Flavius
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To: sarcasm
Nearly 4 bucks a lb for ground beef, let the industry eat cake. Never seen a mad turkey or chicken.
4 posted on 12/23/2003 5:35:20 PM PST by cynicom
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To: sarcasm
Terrorism.
5 posted on 12/23/2003 5:37:26 PM PST by Salvey
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To: PokeyJoe
Somebody got jealous of Adkins Diet Success.

Now, maybe I can afford a steak.

6 posted on 12/23/2003 5:39:31 PM PST by Mike Darancette (Proud member - Neoconservative Power Vortex)
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To: sarcasm
Wow this is bad news but I'm still cooking that huge prime rib for Christmas dinner!
7 posted on 12/23/2003 5:40:00 PM PST by MontanaBeth (absolute power, corrupts absolutely)
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To: cynicom
Good. Lower prices. Beef prices are off the wall, and I have 3 dogs to feed.
8 posted on 12/23/2003 5:41:07 PM PST by At _War_With_Liberals
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To: At _War_With_Liberals
What kind of dogs?
9 posted on 12/23/2003 5:47:25 PM PST by CasearianDaoist
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To: sarcasm
The disease has killed about 130 people over the years, mostly in Europe. "It's huge, huge..."

From today's news - The cold spell has killed more than 2,500 people across England and Wales in the past week, experts today revealed.

I'll take my chances with the beef...

10 posted on 12/23/2003 5:49:34 PM PST by Libloather (DemocRATs - the biggest hate group going...)
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To: Endeavor
ping
11 posted on 12/23/2003 5:52:27 PM PST by Iowa Granny
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To: sarcasm
If the idiot corporations would feed cows grass instead of cow brains, this problem wouldn't exist.
12 posted on 12/23/2003 5:53:26 PM PST by aimhigh
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To: cynicom
We've cut way back on our beef consumption due to the outrageous prices. If the prices drop significantly, we will buy more. One possible BSE case does not scare me. BTW, Japan has already banned US beef imports. WE should find a Japanese export of similar value to throw a ban on.
13 posted on 12/23/2003 5:53:50 PM PST by Trust but Verify (Will work for W)
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To: aimhigh
Nothing like jumping to conclusions. On what do you base this statement?
14 posted on 12/23/2003 5:55:09 PM PST by Trust but Verify (Will work for W)
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To: Trust but Verify
We have, too. But prices of pork and chicken are going to spike, as well.

Spam, anyone? It isn't really meat - it's some sort of jellied petroleum product.

15 posted on 12/23/2003 5:56:22 PM PST by Pete'sWife (Dirt is for racing... asphalt is for getting there.)
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To: sarcasm; farmfriend
ping
16 posted on 12/23/2003 6:00:58 PM PST by Willie Green (Go Pat Go!!!)
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To: CasearianDaoist
2 mutts from a shelter and 1 from a junkyard. Nothing fancy!

A black lab mix, a yellow lab mix, and an unknown.
17 posted on 12/23/2003 6:02:09 PM PST by At _War_With_Liberals
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To: Pete'sWife
Its having a ripple effect......


18 posted on 12/23/2003 6:06:15 PM PST by Rebelbase
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To: sarcasm
I would not want to be in the Live Cattle pit tommorow...or Friday... and maybe Monday too.
19 posted on 12/23/2003 6:10:25 PM PST by Free Vulcan
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To: Free Vulcan
I would not want to be in the Live Cattle pit tommorow...or Friday... and maybe Monday too.

They will be slaughtered.

20 posted on 12/23/2003 6:12:50 PM PST by torstars
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