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Cattle prices firm despite mad cow scare

Fewer cattle made it to auction in Washington state  Monday, but the prices they drew made cattlemen smile for the first time since word broke that mad cow disease had been detected in the state.
/ Source: The Associated Press

Fewer cattle made it to the auction block at the Toppenish Livestock Commission, but the prices they drew made cattlemen smile for the first time since word broke that mad cow disease had been detected in the state.

Only about 100 cows were sold Monday, with the market high 61 cents a pound for a 1,850-pound cow. That was only 2 cents down from a 63-cents-per-pound high for slaughter cows in late December, said John Top, co-owner of the Yakima Valley-based auction.

"I loved it. I was tickled. I could have used another couple hundred head of cattle at these prices," he said. "Demand is good, short supply, prices are high. Simple economics."

The first Monday sale of the year usually features between 200 and 300 Holstein cows for beef slaughter. They are typically aging cows that are no longer producing milk or younger cows that have been unable to calve.

The auction, one of the region's largest, particularly draws cattle from farmers in Washington's Columbia Basin and Yakima Valley, where the nation's first case of mad cow disease was discovered in a Holstein cow from a dairy farm in nearby Mabton.

More than 30 countries banned imports of U.S. beef after the Dec. 23 announcement. But the half-dozen buyers for packing companies who were on hand for the auction praised the prices -- even if they didn't buy.

"I thought the cattle sold very well -- more than I wanted to pay," said Darin Clagg of Stratford, Calif., a packer buyer.

Clagg said he usually would buy about 300 head of cattle at the auction each week. He bought nothing Monday, expecting prices to fall.

The high prices reflect consumer confidence in beef products, he said. But he also said that confidence will have to remain steady to ease fears among those in the industry.

"Everyone's nervous now, of course, buying Washington cattle," Clagg said. "I didn't necessarily want to get our names out there plastered that we were buying these cows if there's not a profit to be made."

Nervousness was also felt in Texas, where business at a livestock auction in Tulia was down about 70 percent from a normal Monday because few producers wanted to be the first to sell their stock since the mad cow scare.

Rather than buying, many who attended came to see what the prices were like.

"It's hurt the pocketbook," auction manager Mark Hargrave. "The cattle industry has lost a lot of money."

A 615-pound steer brought the highest price at $89.50 per 100 pounds -- about $10 less per 100 pounds than what it would have sold for during the last Tulia auction on Dec. 22, the day before the Washington state mad cow case surfaced.

"It wasn't near as bad as everybody thought it would be," Hargrave said of the prices. "Everyone was encouraged. It was lower but it wasn't a wreck."

Typically, there are about 3,000 cattle at the Tulia auction, one of the two largest in the Panhandle region, Hargrave said.

About 800 were up for sale Monday. David Doshier, a cattle producer from nearby Vega, said cattle raisers are left with two prospects: sell their animals or feed them. And feeding them has become costly due to an extended drought in the region.

"Producers are having to make some tough decisions right now," he said.

Texas is the nation's largest beef producing state with about 15.5 million head of cattle and about 151,000 cattle operations.

Cattle production brings about $16 billion annually to the state's economy, agriculture officials said.

Mad cow disease, or bovine spongiform encephalopathy, eats holes in the brains of cattle. The disease is a threat because humans can develop a brain-wasting illness that is a variant of the disease.

In Washington, Top said the relatively high prices that cattle fetched at his auction proved consumers aren't afraid of American beef, a feeling echoed by Texas cattlemen.

"I think people are realizing this issue with BSE is really rare, real low risk," Top said. "The meat is leaving the counters in the stores, and these packers need the meat to fill the shelves."