CME: USDA Confirms BSE Case

US - USDA confirmed another incidence of bovine spongiform encephalopathy (BSE) in dairy cow in the United States during a press conference this afternoon. The mature cow from central California was detected in a pre-rendering inspection. USDA describes the case as atypical because the cow most likely did not contract the disease by consuming infected feed, writes Mary Ledman, Sara Dorland, Sarina Sharp and Karen Endres on 24 April 2012.
calendar icon 25 April 2012
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The first incidence of BSE in a dairy cow was confirmed on Dec. 24, 2003. The Canadian-born mature cow was found in Washington. On the heels of USDA’s announcement in 2003, Class III futures closed 16¢ to 25¢ lower in the front three months. Today’s Class III market impact was muted. In fact, Class III futures settled higher and continued to trade in positive territory post USDA’s announcement.

Live cattle futures did not bode so well. CME live cattle futures closed limit down $3.00/ cwt. APR through DEC 2012 (see chart). Another fallout from the 2003 BSE case was the temporary closure of the Mexican border to US dairy imports. Exports of NDM to Mexico fell from over 10.0 million lbs. per month in the fourth quarter of 2003 to less than 2.5 million lbs. in January 2004.

NDM exports to Mexico rebounded by March 2004, totaling 23.4 million lbs. USDA indicated it has begun to notify trade partners of the discovery. USDA’s Chief veterinary officer said that there should be no adverse impact on US beef exports.

“This detection in no way affects the United States’ BSE status as determined by the OIE,” he stressed. “The US has in place all of the elements of a system that OIE has determined ensured that beef and beef products are safe for human consumption: a mammalian feed ban, removal of specified risk materials, and vigorous surveillance.”

CME spot Cheddar cheese trading was active today as nine loads of cheese traded. The spot barrel market gave up yesterday’s 1.5¢ gain and closed at $1.455/lb. The block market traded as low as to $1.5150/lb. before trading three times at $1.5225/lb. Two trades occurred in the spot butter market that closed 1.25¢ lower at $1.40/lb. Class III futures closed in positive territory while butter and NDM futures were mostly lower.

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