UNIVERSITY PARK, Pa. -- Despite the discovery of a cow with bovine spongiform encephalopathy (BSE) -- also known as "mad cow disease" -- on a dairy farm in the state of Washington, most Americans are still eating beef, according to an economist in Penn State's College of Agricultural Sciences.

"The good news is that consumers have not backed away from eating beef," says Lou Moore, professor of agricultural economics. "American consumers don't seem to be much bothered by it. The fact that this case was traced back to Canada is good news for us. I think because BSE was discovered in Canada last summer, the public is somewhat sensitized to the news."

The price of finished beef cattle, which was hovering around 95 cents a pound just before Christmas, has dropped by an average of about 20 cents, or nearly 20 percent, since the news of the Washington state BSE case broke. But it has recovered a few cents in the past week even as the government announced that 45 bull calves, including a calf descended from the cow diagnosed with BSE, were destroyed.

Strong evidence indicates that BSE has been transmitted to humans primarily in the United Kingdom, causing a fatal variant form of Creutzfeldt-Jakob disease (vCJD). In the United Kingdom, where over 1 million cattle may have been infected with BSE, a substantial species barrier appears to protect humans from widespread illness. As of Dec. 1, 2003, a total of 153 vCJD cases had been reported worldwide; of these, 143 cases had occurred in the United Kingdom. Scientists say the risk to human health from BSE in the United States is extremely low.

"Some of this frightening, negative publicity may abate and the price may recover somewhat," says Moore. "Cattle futures were up slightly last week. But it is so hard to measure the reaction. The run up we had in the beef price last fall was steep, and the price was going to fall anyway. Even without BSE, the cattle market was going to start slacking off by spring. Cattle futures for June delivery are currently only four cents per pound less than they were on Dec. 23, 20 days before the announcement about the infected animal. Cattle prices are seldom stable for any length of time, but now, every time that beef prices fall, it will be blamed on BSE."

Still, Moore concedes, the impact of the BSE scare will be significant even if domestic beef prices recover quickly -- and he's not predicting that -- because of the disruption in exports. "A full 10 percent of our country's beef production is exported, so the industry will be able to recover quickly only if exports resume soon," he says. "But if we lose the export market for any length of time, losses for the Pennsylvania industry will increase sharply." EDITORS: Contact Lou Moore at 814-865-0460 or by e-mail at hlm4@psu.edu.

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