The loss of export markets for U.S. beef following last month's discovery of the first case of mad cow disease in the United States will significantly lower cattle prices in 2004, the U.S. Department of Agriculture said Monday.
U.S. cattle prices were forecast in the range of $72 to $78 per hundredweight, down from last month's government estimate of $84 to $91 per hundredweight for this year.
Cheaper prices are already being reflected in the meat sections at supermarkets. Last week, Chicago supermarkets were advertising boneless round tip roasts for $1.99 a pound, a savings of $3.00 per pound. Retailers were also promoting beef in Washington, DC, with "buy one get one free" roasts.
In early Chicago Mercantile Exchange trading, live cattle futures contracts for February delivery were at 76.250 cents per pound and April at 75.6 cents.
In its monthly crop report, USDA said U.S. beef exports would fall 90 percent this year after virtually all foreign countries except Canada banned U.S. beef due to mad cow fears.
A Holstein slaughtered on Dec. 9 in Washington state was found to have bovine spongiform encephalopathy, a brain-wasting disease that ravaged UK cattle herds in the 1990s.
About 140 people, mostly in Europe, were killed by a human variant of mad cow associated with eating meat from diseased bovines.
Since the Dec. 23 announcement of the Washington state case, investigators have found the animal was born in Canada, and U.S. officials have said they are hopeful this will be an isolated case.
U.S. agriculture industry officials speculated Monday that the Food and Drug Administration could soon tighten regulations on animal feed, which is suspected of spreading mad cow disease when contaminated with ruminant remains.
USDA noted in its crop production report that domestic demand for beef remained firm since the announcement.
The export forecast was far different, however, since most major beef importing countries have refused to say when they might resume trade.
U.S. beef exports in 2004 are now forecast to be just 220 million pounds, down from last month's forecast of 2.6 billion pounds. Production remains unchanged at 25.5 billion pounds, USDA said.
Japan, the largest foreign buyer of American beef, has sent experts to Washington state to review mad cow safeguards. Mexican officials will be in Washington, DC, later this week on a similar mission. Mexico is the second-largest foreign buyer of U.S. beef.