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US in Tune with World BSE Standards - Analyst Blog

The American health watchdog - U.S. Department of Agriculture (USDA) - has decided to follow the same guidelines for mad cow diseases as that used internationally for importing beef.

This initiation was triggered following a letter from the US senators urging to frame a rule related to Bovine Spongiform Encephalopathy ( BSE ), commonly known as "Mad Cow Disease."

The compliance of the mad cow disease standards with the international standards are expected to increase exports of beef from US. Mexico, which has been a major market for beef could not be tapped fully by the US as they do not allow imports of American cattle older than 30 months. As a result of this restriction, U.S. beef producers are estimated to lose some $100 million annually.

If the standards are made uniform, important overseas trading markets that have remained out of bounds till now are expected to be more open to cattle that are imported from US.

USDA plans to modify its standards in tune with those used by the Paris-based World Organization for Animal Health.

Mad Cow Disease or Bovine Spongiform Encephalopathy made its first appearance in British dairy herds in 1986. It is a transmissible disease, and spreads throughout a human or animal's brain. It causes a loss of physical coordination and mobility in the infected animal and eventually results in death.

The Consumers Union of America, who publishes Consumer Reports, has consistently been dissatisfied by USDA's mad cow surveillance program. They are of the opinion that the watchdog is undermining the seriousness of the problem.

Exports of beef from US fell 84% since 2003 after the first case of BSE was found in December 2003. According to International Trade Commission, beef companies like Tyson Foods Inc. ( TSN ) and Cargill Inc have suffered losses worth $2.5 billion to $3.1 billion year on year from 2004 to end of 2007.

Decline in America's beef consumption due to increasing vegetarian trend among the majority of the population dragged the nations' beef industry down. According to USDA, during 2011, the Americans consumed 13% lesser beef than it used to 10 years ago,. Moreover, it predicts consumption to decline during 2012.

Adding to the woes, the U.S. first lady's keep fit campaign 'Let's Move,' which has been launched nearly two years back for protecting children against obesity, is causing worry for some food giants. The campaign suggests the inclusion of more vegetables and fruits and less of meat and fats in US school meals. The processed meat producers are among the worried lot, as this definitely means lesser consumption of their products.

Currently Tyson holds a Zacks #3 Rank which implies a short term Hold rating.

TYSON FOODS A ( TSN ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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