How Now Mad Cow?

For Texas cattle ranchers, "What's for dinner?" is a touchy question

Yet the Consumer Federation of America's Carol Tucker Foreman, a former USDA official, says Veneman's moves were too general. In particular, she criticized the USDA for not providing any details on the structure, timing and enforcement of a uniform national animal tracking system. Foreman points to the difficulty the USDA has faced tracking down the 80 cattle that made their way to the United States along with the infected heifer. (Only 28 have been accounted for.) Then on February 4, a group of international scientists assembled by the USDA concluded that other cases of mad cow disease are likely to pop up here in the future, which could stiffen foreign bans on U.S. beef exports and sorely test appetites. Though Mexico partially lifted its ban on U.S. beef in early March, Japan insists it won't resume U.S. beef imports unless every animal is tested for mad cow.

"The problem with this disease is there are still a lot of unknowns," says Michael Hanson, a researcher at Consumers Union, a group that has been critical of the beef industry. "So we're not willing to say beef is unsafe. That would be foolish to say that. But we do say there is a risk out there. Given the scientific uncertainty, we don't know the size of the risk."

So far the risk largely has been met with indifference from consumers. According to a poll released by Rutgers University's Food Policy Institute in January, 68 percent of those who had heard of the mad cow discovery in Washington State said their confidence in the nation's beef supply remained unchanged. Astoundingly, 8 percent said their confidence in beef actually increased after the discovery. Murphy believes that uptick may be attributable to the media coverage of the USDA's response, which highlighted the protective measures already in place. Statistics from the U.S. Department of Labor show that while the seasonally adjusted retail price of beef edged up for most of 2003 with a 6.2 percent spike in November, it dipped 1.8 percent in January and another 1.6 percent in February, though this most likely was caused by the loss of a $3.8 billion beef export market rather than a nervous slackening in demand.

"Mad cow was the best thing that ever happened," because it eased prices, says Samir Dhurandhar, executive chef at Nick & Sam's steak house. Gene Street, chairman of Dallas-based Consolidated Restaurant Operations, says his III Forks Steak House posted its best night ever this past Valentine's Day, raking in more than $125,000 in one-day sales.

"Our business has gone crazy," says Mark Hoegh, marketing director for Gary Yamamoto Custom Beef in Mabank. "We can source-verify our cattle. We can tell you who the grandfather was. We can tell you what pasture in Texas that carcass would have been born in, if it had ever had a snotty nose." Yamamoto exclusively raises the beef that is in short supply: prime and Kobe beef, the hyper-marbleized meat that fetches $55 for a pound of tenderloin.

Kate Lowery-Monteilh, a spokeswoman for Whole Foods Markets, says the grocery chain has seen its beef sales pick up since the mad cow discovery, but she attributes the rise to Whole Foods' natural beef program, which permits meat from only cattle slaughtered under 24 months of age (mad cow has a long incubation period and primarily strikes older animals) and fed a strict vegetarian diet without hormones or antibiotics. "Is the uptick in sales attributable just to mad cow?" she asks. "It's hard to say, because there are a lot of people out there seeking the high-protein options with the whole low-carb diet craze...Over the past year we've had record sales in our meat department."

But the mad cow incident doubtless has invigorated the niche market for special products. Richard Sechrist, chief executive officer of Homestead Healthy Foods, a cattle and chicken producer in Fredericksburg and the first certified organic ranch in Texas, says his sales have surged 300 percent since late December.

"Our business since that happened is up 33 percent. Prices have come down substantially," says Richard Chamberlain of Chamberlain's Steak and Chop House. "Demand for beef has remained high. But particularly the demand for high-end steak houses has gone up, because life's too short to eat cheap beef."


Short aptly describes the beef supply, at least until recently. The biggest squeeze in the past 12 months has pinched the narrow sliver that encompasses the highest grades, those craved by restaurants and specialty markets. One reason for this is the steady upward swing in demand over the past few years. While down sharply from a 20-year high of 94 pounds per capita in 1976, beef consumption hit 67.6 pounds in 2002, up 5 percent from its 30-year trough of 64.4 pounds in 1993. Consumption sagged in 2003 to 1993 levels, but Texas A&M University economist Ernie Davis says that's because demand, up 5 percent in 2003, far outstripped supplies. The USDA projects beef consumption will rise to 2002 levels this year.

At the same time consumption has been creeping upward, ranchers have been progressively liquidating the U.S. cattle herd, primarily because of the persistent drought that has afflicted much of the West and Southwest over the past few years. The cattle population at the end of last year was 94.9 million head, down 8.3 percent from a 10-year high of 103.5 million head in 1996. Texas has by far the largest cattle population of the 50 states with 13.9 million head, well above Kansas, the second-most populous cattle state with 6.65 million head.

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