Question: During early 2004 the U S beef industry faced a crisis

During early 2004, the U.S. beef industry faced a crisis. A slaughtered dairy cow in Washington State was infected with bovine spongiform encephalopathy, more commonly known as “mad cow disease.” Government regulators and consumer groups were alarmed because humans who eat contaminated beef may become ill with a fatal brain-wasting disease. The finding of mad cow disease caused domestic beef prices to drop considerably. It also triggered a potential loss of $3 billion in beef exports, as numerous countries immediately banned the import of U.S. beef. Mad cow disease destroyed the British beef industry during the 1990s, and industry groups wanted to avoid a similar fate in the United States.
The only known cause of mad cow disease was the ingestion of infected animal parts. For many years, cattle had routinely been fed by-products from the beef rendering industry. Before the 1990s, this practice was viewed as an economic and ecological success. Beef by-products from slaughter-houses, packing plants, butcher shops, and restaurants totaled approximately 44,000 tons per week in the United States. In the rendering process the remains were ground up and then cooked, which removed the water. The residue could be turned into fats, oils, or meat and bone meal. U.S. sales of meat and bone meal totaled approximately 3.2 billion tons per year. The rendering process provided beef by-product revenues, reduced the cost of protein in cattle feed, and avoided the need to dispose of the beef by-products.
Following an outbreak of mad cow disease in Britain, scientists determined the manner in which the disease spread. With this new information, regulators throughout the world banned the use of beef by-products in cattle feed. However, the 1997 U.S. ban did not prohibit the use of beef by-products in feed for other types of animals, such as poultry, pigs, and pets. The United States also allowed the use of by-products from other types of livestock to be used in cattle feed. During early 2004, U.S. regulators were not sure how the Washington cow had acquired mad cow disease. The disease had an incubation period of many years, and the infected cow was 6.5 years old. Further complicating the investigation, the cow was purchased from a Canadian herd during 2001.
Some consumer activists called for a complete ban on the use of mammal by-products in animal feed. Others called for expanded testing of cattle, which presently could be done only on dead animals. Industry groups argued that these measures were not economical because they would dramatically increase the cost of beef, while consumers demanded low beef prices.
Conduct research on the Internet to find articles or other information that discuss both the pros and cons of using beef by-products in animal feed. Answer the following questions:
A. What is likely to happen to U.S. beef by-products if they are not sold for use in animal feed?
B. Suppose the U.S. government bans the use of all types of animal by-products in livestock feed.
1. How would the ban most likely affect the cost of main products in the cattle industry? Explain.
2. How would the ban most likely affect the cost of main products in other livestock industries, such as pigs and chicken? Explain.
C. Besides the effects in part (B), describe the likely economic effects on the U.S. cattle industry if the use of beef by-products is banned for all types of animal feed.
D. What responsibilities do U.S. regulators have to various stakeholders in this issue? Consider the following types of stakeholders:
● U.S. cattle industry
● Other U.S. livestock industries, such as pigs and chicken
● Other U.S. food manufacturers
● Consumers of U.S. beef
E. Industry representatives argue that consumers of U.S. beef face no serious risk from mad cow disease. How valid is this argument?
F. In your opinion, should the United States ban the use of all types of animal by-products in livestock feed? What values did you use to reach your conclusion?

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  • CreatedJanuary 26, 2015
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