MAD COW SCARE: Local beef prices likely to drop due to disease

By WILL STEWART / Staff Reporter for the Southern Standard (McMinnville, Tenn.)

Henry Melton throws down grain for his black baldie cows. Melton, who raises cattle in the Lucky community, has sold as much as 100 head at one sale. (James Clark photo)

For a beef cattleman who began his herd not long before the U.S. outbreak of mad cow disease last month, Junior Medley is surprisingly optimistic.

“I don’t think anything big’s going to happen,” said Medley, who has a 90-head herd. “It might affect prices a little, maybe for about a month, but it will settle ? as long as they don’t find another one with it.”

Bovine Spongiform Encephalopathy (BSE), commonly called mad cow disease, was confirmed in a single cow in Washington state in late December. In response, more than 30 countries, which make up 90 percent of the U.S. beef export market, have banned U.S. beef. As a result, beef prices have plummeted between 15 to 20 cents a pound.

While no local beef markets have been held since the outbreak, local extension agent J. Dale Beaty said he expects similar price decreases when Warren County Livestock holds its feeder calf sales today.

“This is going to be the first taste of how calf buyers are going to react to this,” said Beaty. “About 90 percent of export customers said no to U.S. beef, so bingo, we’re going to have more beef on the market, which means McMinnville farmers can expect less when they go to sell.”

Higgins Livestock owner Jimmy Higgins said he is unsure at this point how much the mad cow outbreak will affect area beef farmers. He estimated, however, prices will decline 20 to 30 percent.

“And that’s going to hurt a lot of poor farmers, especially the ones who do beef as their whole livelihood,” Higgins said.

Henry Melton, who has raised cattle for 35 years in the Lucky community, has about 200 head of cattle on 500 acres. Melton says last year was one of his most profittable thanks to high prices, and he doesn’t like to hear about prices dropping.

“I don’t know what they’ll bring now. There’s no way for a man to know,” said Melton. “If it goes down 20 or 30 cents a pound, that pretty much eats away any of your profits.”

For all of the hype, Beaty said the outbreak will likely have no lasting effects locally. Beef prices will rebound, he predicted, when exports are opened back up and as consumer confidence is maintained. He mentioned such confidence-building measures as cattle tracking as a possible action that could be taken by the government.

But the most promising sign, he said, is beef sales have shown no decline. “That’s the best thing. It doesn’t seem to be closing the beef counter at Bi-Lo and that’s good,” he said. “We’ve got to eat.”

Medley, who also owns Medley’s Classic Diner, said he has seen no decline in beef consumption at his restaurant.

“Sales of beef are up, actually. We sold more beef today, hamburgers and steaks, than we’ve sold any day in the past two weeks. It’s not fallen off at all,” he said.