Order Code IB10127
CRS Issue Brief for Congress
Received through the CRS Web
Mad Cow Disease:
Agricultural Issues for Congress
Updated October 27, 2004
Geoffrey S. Becker
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Introduction
U.S. Case
Meat Recall
Cow’s Origin and Movements
BSE Safeguards Before the U.S. Case
Import Restrictions
Targeted Domestic Surveillance
Domestic Cattle “Feed Ban”
Assessments of the BSE Safeguards
Policy Changes After the U.S. BSE Case
USDA
FDA Rules
Joint FDA-USDA Rulemaking
Expanded Surveillance
Funding
Testing Issues
Publicizing Test Results
Testing Procedures
Private Testing
International Panel Report
U.S. Economic and Trade Implications
Japan
Industry Impacts
Canadian BSE Case
Investigation
USDA Actions to Readmit Canadian Beef
Congressional Response

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Mad Cow Disease: Agricultural Issues for Congress
SUMMARY
In December 2003 a Holstein dairy cow
foods and cosmetics it regulates and tightening
in Washington State tested positive for BSE
feed restrictions. On July 14, 2004, FDA
(bovine spongiform encephalopathy, or mad
published an interim final rule to prohibit
cow disease), the first case discovered in the
certain cattle-derived materials in agency-
United States and the second native case in
regulated products. Also on July 14, FDA
North America. The animal was born in April
joined USDA in publishing an advance notice
1997 in Canada, shortly before both countries
of proposed rulemaking seeking comment on
banned the practice of feeding most ruminant
possible additional preventive actions, includ-
material back to ruminants, including cattle
ing possibly tighter animal feed rules.
(BSE-contaminated feed is considered the
most likely cause of infection).
USDA in June 2004 began an expanded
surveillance program to test at least 220,000
Most countries banned U.S. beef after the
mostly higher-risk cattle for BSE over a 12-18
December discovery. Several have partially
month period. At the start, the Department’s
reopened. Japan and Korea, the number one
testing was criticized as statistically and proce-
and three U.S. markets, respectively, remained
durally flawed; USDA has vigorously defended
closed, although officials on October 23,
it even while making modifications. As of
2004, reported some progress toward resum-
October 25, more than 92,000 had been tested,
ing trade with Japan. USDA projects that
none positive for BSE.
total global exports in 2004 likely will reach
only 18% of their 2003 level of about 2.5
In May 2004, in response to a lawsuit,
billion pounds. However, strong domestic
USDA officials acknowledged they had erred
demand and tight cattle supplies have kept
administratively by permitting millions of
U.S. meat and cattle prices relatively high.
pounds of previously suspended Canadian beef
cuts to enter. A court agreement now limits
USDA and other experts contend that the
such imports to lower-risk products until ap-
risk to human health from one or a few U.S.
propriate rulemaking is completed.
BSE cases is minimal. Nonetheless, USDA
intensified efforts to improve BSE safeguards,
Various congressional committees have
including banning downer (nonambulatory)
been holding BSE hearings. BSE-related bills
cattle from human food; keeping from the
include legislation to ban downers for food
food supply additional higher-risk animal
(H.R. 2519, S. 1298), to prescribe mandatory
parts; accelerating work on a national animal
animal ID and/or meat traceability rules (H.R.
identification system for disease purposes; and
3546, H.R. 3787, H.R. 3822, H.R. 3961, H.R.
increasing funds for BSE-related activities.
4005, S. 1202, S. 2008, S. 2070), and to require
BSE tests on most cattle (H.R. 3705), as well
On January 26, 2004, the Food and Drug
as other bills (S. 2051, S. 2007, S. 2451, H.R.
Administration (FDA) announced that it
3714, H.R. 4001, H.R. 4121, H.R. 4576).
would strengthen its own BSE rules, banning
higher-risk bovine materials from the human

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MOST RECENT DEVELOPMENTS
On October 23, U.S. and Japanese negotiators jointly reported that progress had been
achieved toward resumption of some two-way beef trade between the two countries, although
most observers believe that actual U.S. exports to Japan are not likely to begin for at least
several months. The two sides still must negotiate additional details and undergo required
rulemaking processes in their respective countries.
Also still unsettled are efforts to further expand beef and other ruminant product imports
from (and exports to) Canada, and to reopen other key markets such as Korea. Meanwhile,
USDA reported on October 25 that more than 92,000 cattle had been tested for “mad cow”
under the special surveillance program launched in June, with no new U.S. cases found.
BACKGROUND AND ANALYSIS
Introduction
Bovine spongiform encephalopathy (BSE), widely known as mad cow disease, is a
degenerative, fatal disease affecting the nervous system in cattle. Worldwide, BSE has been
found in 187,000 animals, 183,000 of them in Great Britain, where it was first detected in
1986. (Most of the rest occurred elsewhere in Europe.) The predominant theory among
scientists is that a “proteinaceous infectious particle” or “prion,” for which no treatment or
preventive vaccine exists, causes BSE, which they believe is transmitted to other cattle
through feed containing BSE-infected protein by-products. BSE cannot be detected in
animals until symptoms (e.g., neurological abnormalities; inability to stand or walk) appear,
nor can it be confirmed until brain tissue is tested. Estimates of average incubation for BSE
symptoms in cattle range from two to eight years.
Until December 2003, tests had not found BSE in a U.S. herd. Nonetheless, scientific
uncertainty about its cause and transmission had spurred U.S. precautionary actions in recent
years aimed at confirming BSE’s continued absence and preventing imports of livestock or
animal products that could carry it. Other BSE-like animal diseases, collectively called
transmissible spongiform encephalopathies (TSEs), have long been present here. They
include scrapie in sheep and chronic wasting disease (CWD) in deer and elk.
A rare but fatal human disease, Creutzfeldt-Jakob disease (CJD), also is known to occur
in the United States, where it normally strikes about one in one million people yearly.
Following the British BSE outbreak, a new-variant CJD (vCJD) was identified and is
believed to be transmitted to humans mainly through consumption of cattle products
contaminated with the BSE agent. About 150 people have been diagnosed with vCJD since
1986, most of them in Great Britain. The human incubation period is approximately 13
years, according to the U.S. Food and Drug Administration (FDA).1
1 Except where noted, sources primarily are USDA daily briefings and backgrounders on BSE, which
are available through the USDA website at [http://www.usda.gov].
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U.S. Case
USDA announced on December 23, 2003, that brain samples taken from a Holstein
dairy cow in Washington State on December 9 had tested positive for BSE, the first such
U.S. case. While emphasizing that the risks to food safety and human health were minimal,
U.S. officials initiated standing BSE response plans including an extensive investigation that
eventually led to the percautionary killing of about 700 cattle and the testing for BSE of 250
of them. No other cases were found during this investigation, led by USDA’s Animal and
Plant Health Inspection Service (APHIS).
Meat Recall. USDA’s Food Safety and Inspection Service (FSIS), which inspects
most meat and poultry for human food, determined that the brain, spinal cord, and part of the
lower intestine of the BSE cow — tissues most likely to be infective — had been removed
at slaughter. It also announced “out of an abundance of caution” a voluntary recall of 10,410
pounds of raw beef from 20 animals slaughtered on the same day as the BSE cow at a Moses
Lake, Washington, facility. Officials, who in early February 2004 expanded the recall to
38,000 pounds, said some meat likely was consumed, but they attempted to reassure
consumers that the meat posed “zero risk” to human health.
Cow’s Origin and Movements. Officials traced the BSE cow to its birthplace in
an Alberta, Canada, herd in April 1997. It is believed to have entered the United States with
80 other dairy cattle from the same Alberta herd in September 2001; the cow reached a
4,000-head dairy herd in Mabton, Washington, in October 2001. The cow likely was
infected in Canada by eating contaminated feed before a 1997 ban on feeding most
mammalian proteins to cattle became effective, according to APHIS. The only other native
North American BSE case, discovered in Alberta in May 2003, was a Black Angus beef cow.
U.S. authorities announced on February 9, 2004, that their field investigation had located 28
of the 80 animals at eight different facilities, mostly in Washington. They had focused
particularly on the whereabouts of 25 in the herd that were born within one year before or
after the BSE-infected cow, “of special significance” because they are most likely to have
consumed feed from the same source. By the conclusion of the investigation, 14 of these
were located. Critics assert that if a U.S. animal identification (ID) system were in place,
USDA could have accounted for the disposition of most if not all 80 animals, and possibly
their products. Others counter that the likelihood of the others also being infected has always
been quite low.
BSE Safeguards Before the U.S. Case2
U.S. and beef industry officials had long contended that three so-called firewalls would
keep BSE from threatening domestic cattle and public health. These “firewalls” have been:
Import Restrictions. APHIS has an import ban on live ruminants (cows, sheep,
goats) from countries with known BSE cases (started in 1989); an import ban on ruminant
meat and meat products from BSE countries (since 1991); and a prohibition on importing
both ruminant and most ruminant products from all of Europe (since 1997). In late 2000,
2 For a more extensive discussion of U.S. BSE regulatory actions, see CRS Report RL32199, Bovine
Spongiform Encephalopathy (BSE, or “Mad Cow Disease”): Current and Proposed Safeguards.
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USDA prohibited imports of all rendered animal protein products regardless of species from
Europe out of concern that feed of nonruminant origin was potentially cross-contaminated
with the BSE agent. Under the FSIS foreign inspection program, no establishments in
countries where BSE has been found can ship beef to the United States. The exception now
is Canada, which USDA contends has a science-based approach to BSE safety.3
Targeted Domestic Surveillance. Among other duties, meat inspectors examine
every animal entering slaughter plants for human consumption. FSIS indicates it has not
permitted cattle showing suspicious neurological symptoms to be slaughtered for human
consumption.4 It has sent brain samples from such animals to an APHIS laboratory in Ames,
Iowa, as part of what USDA called a broader “targeted surveillance approach designed to test
the highest risk animals, including some but not all downer (nonambulatory) animals, those
that die on the farm, older ones, and animals exhibiting signs of neurological distress.”
The program had grown steadily from a few thousand animals tested annually in the
mid-1990s to about 20,000 cattle in each of FY2002 and FY2003, out of about 36 million
slaughtered each year. Critics argued that U.S. surveillance was inadequate to detect BSE,
and that it remains to be seen whether the positive cow from Washington State is an isolated
case. Some proposed that testing should approximate levels in Europe, where policy calls
for testing all cattle over 30 months old, or in Japan, which claims to test all cattle for
slaughter. USDA had argued that its program was testing many more animals than
recommended by the World Organization for Animal Health (or OIE, its French acronym)
and that because surveillance is targeted to test higher-risk animals, it could effectively detect
BSE if it is present in the bovine population at a level of one in one million adult animals.
USDA had intended to test 40,000 cattle in FY2004, but in June 2004 it began a greatly
expanded program (see “Expanded Surveillance” later in this report).
Domestic Cattle “Feed Ban”. FDA, which regulates animal feed ingredients,
banned most mammalian proteins from cattle feed on August 4, 1997. Exceptions have
existed for blood and blood products; gelatin; inspected, processed, and cooked meat
products for human consumption (such as restaurant plate waste); milk products; and
products containing pork and equine proteins only. Most mammalian proteins can still be
fed to other animals such as pigs, poultry, and pets. To ensure compliance, FDA
enforcement includes education, and inspections of the estimated 264 renderers (firms that
prepare animal parts not destined for human food), and of all known feed mills (as many as
9,240 or more, according to the agency).5 The “feed ban” is discussed later in this report.
3 The United States, Canada, and Mexico have been working through the OIE Animal Health (or
OIE, the French acronym) on new guidance for resuming trade with countries that have reported
BSE. See The OIE standards on BSE: a guide for understanding and proper implementation,
January 2004, at [http://www.oie.int/eng/press/en_040109.htm].
4 Source: USDA backgrounder on BSE, July 10, 2003. For more details see CRS Issue Brief
IB10082, Meat and Poultry Inspection Issues. The APHIS website on surveillance is at
[http://www.aphis.usda.gov/lpa/issues/bse/bse-surveillance.html].
5 See CVM and Ruminant Feed (BSE) Inspections at [http://www.fda.gov/cvm/index/bse/
RuminantFeedInspections.htm]. For background on the rendering industry also see CRS Report
RS21771, Animal Rendering: Economics and Policy.
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Assessments of the BSE Safeguards
Some had criticized the effectiveness of the 1997 feed ban. For example, a February
2002 GAO study (Mad Cow Disease: An Improvement in the Animal Feed Ban; GAO-02-
183) reported that 364 out of 10,576 firms inspected by FDA were still out of compliance.
FDA in July 2003 began to assert that industry compliance has been exceeding 99%.6
The GAO report also asserted that the FDA was using flawed data to track compliance,
and had no clear enforcement strategy for firms that were not obeying the ban. The 2002
GAO report states, “Federal actions do not sufficiently ensure that all BSE-infected animals
or products are kept out or that if BSE were found, it would be detected promptly and not
spread to other cattle through animal feed or enter the human food supply.” The report also
had criticized USDA’s failure to test the brains of cattle that die on farms (which
subsequently resulted in a change in the testing program) and questioned the adequacy of the
inspection procedures for imported meats.
On the other hand, a study issued in November 2001 by the Harvard Center for Risk
Analysis, based on a comprehensive three-year risk analysis, stated in part that “BSE is
extremely unlikely to become established in the United States.... Similarly there appears to
be no potential for an epidemic of BSE resulting from scrapie, chronic wasting disease, or
other cross-species transmission of similar diseases found in the U.S.... If the disease does
indeed occur spontaneously in cattle, as some have suggested, it would result in one to two
cases per year with little spread. Only a small amount of potentially dangerous tissues would
reach the human food supply and be available for possible human consumption.”
USDA in 2003 asked Harvard to reassess the risk after BSE was found in Canada.
Harvard responded that although “the possible introduction of BSE into the U.S. from
Canada cannot be dismissed,” the likelihood is very low, and U.S. protective measures by
now would have contained any possible spread. The Harvard study is based on a computer
simulation, which several critics indicate could be based upon arguable assumptions. The
study authors acknowledge that their model is “is not amenable to formal validation because
there are no controlled experiments in which the introduction and consequences of BSE
introduction to a country has been monitored and measured.” But the authors assert that they
tested the model’s predictions of an actual small BSE outbreak in Switzerland and found
them “reasonably close to empirical observations.”7
However, the Harvard reassessment also noted that a group of cattle imported into
Canada from the United Kingdom in 1993 included one that was found to have BSE. The
report observed that if additional animals in this group harbored BSE, were slaughtered and
rendered, infectivity may have been introduced into the Canadian and U.S. cattle feed
6 See [http://www.fda.gov/cvm/index/updates/bse72001.htm] and [http://www.gao.gov/].
7 Joshua Cohen and George M. Gray, Evaluation of the Potential Spread of BSE in Cattle and
Possible Human Exposure Following Introduction of Infectivity into the United States from Canada,
pp. 1-2 (undated 2003 report), Harvard Center for Risk Analysis, School of Public Health,
[http://www.aphis.usda.gov/lpa/issues/bse/harvard_10-3/text_wrefs.pdf]. The Harvard risk analysis
considered import as well as domestic practices in its assessment. Both the GAO and the Harvard
study did note that noncompliance with the feed ban could occur at many points in the feed chain.
Moreover, FDA does not actually test the feed for prohibited material.
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supplies before the 1997 feed ban was implemented in both countries. “If additional animals
were infected, they may have been exported to the U.S. as well.... [It] appears that any
related introduction of BSE into the U.S. from Canada would have been due to the import
of either infected animals or contaminated feed. Imports are a plausible source of
introduction of BSE into the U.S. from Canada because the American and Canadian beef
industries are closely linked. During the previous five years, the U.S. on average imported
over 1.2 million cattle and 185,000 tons of feed annually from Canada” (Harvard, 2003).
Policy Changes After the U.S. BSE Case
USDA. The U.S. BSE incident caused USDA officials to re-examine their existing
safeguards. On December 30, 2003, the Secretary of Agriculture announced the following
steps to strengthen the safeguards, most focusing on FSIS-regulated practices where cattle
are slaughtered and processed. The Secretary also asked an international panel to assess U.S.
actions, and she also announced that BSE surveillance would be expanded.
Downers. USDA has banned all nonambulatory cattle from slaughter establishments,
to ensure that they cannot be passed for human food use, though they still can go to rendering
plants for other uses, including nonhuman food. The number of such animals was estimated
by the Secretary to be 150,000-200,000 out of the 36 million U.S. cattle slaughtered yearly.
The downer ban has been among the most controversial changes for producers, who say they
are now experiencing large losses because they are no longer permitted to sell cattle unable
to walk for reasons unrelated to BSE (e.g., a broken leg). In response to concerns that a ban
will make it more difficult for veterinarians to find and test such animals for BSE, USDA
said it intends to work more closely with the industry to collect samples at rendering
facilities, on farms, and elsewhere. (Interim final rule, January 12, 2004, Federal Register.)
Specified Risk Material (SRM). USDA has declared as SRM (and thus unfit for
human food) the skull, brain, trigeminal ganglia, eyes, vertebral column, spinal cord, and
dorsal root ganglia of cattle over 30 months, and the small intestine of cattle of all ages.
(Tonsils already are considered inedible for human food.) An SRM declaration prohibits the
use of these cattle parts in the human food supply, and is consistent with a Canadian rule
issued after its BSE discovery. The rule requires cattle packers to develop and implement
procedures to remove and dispose of SRMs so that they cannot enter the food chain. (Interim
final rule, January 12, 2004, Federal Register.)
Advanced Meat Recovery (AMR). AMR mechanically removes muscle tissue from
bone, and the paste-like tissue can be labeled as “meat.” FSIS has had regulations to prohibit
such products to be labeled as “meat” if they contain spinal cord. A new rule expands that
prohibition to include additional nerve tissue. Also, AMR cannot be used for cattle 30
months and older. An FSIS sampling program found nervous system tissue in about one-
third of sampled AMR beef. (Interim final rule, January 12, 2004, Federal Register.)
“Test and Hold”. All product from a carcass being tested for BSE must be held until
FSIS confirms that the BSE test is negative. (Notice, January 12, 2004, Federal Register.)
Stunning. Another new rule bans air-injection stunning, to ensure that brain pieces
are not dislocated into carcass tissues during slaughter. USDA stated that this method was
now rarely used. (Interim final rule, January 12, 2004, Federal Register.)
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Animal Identification and Traceability. The Secretary also said on December 30,
2004, that USDA would “begin immediate implementation” of a national animal ID system.
A government-industry committee already had been working on the framework for a system,
and it had anticipated that states would have individual IDs in place for cattle for interstate
movement by July 2005. On April 27, 2004, USDA announced that the White House had
approved spending $18.8 million in Commodity Credit Corporation (CCC) funds for
implementation this year. The April 27 announcement also contained some information on
early implementation plans, which include studying existing animal ID projects and entering
into cooperative agreements with states to start voluntary ID. On August 5, 2004, USDA
announced the 29 states and tribal agencies that are receiving $11.64 million of the total, to
register premises, collect data, and test ID technologies. (See CRS Report RL32012, Animal
Identification and Meat Traceability.)
FDA Rules. On January 26, 2004, FDA said it would enhance its own BSE safeguards
for the food and cosmetic products it regulates. FDA said it intended to ban from human
products the same SRMs being newly prohibited in FSIS-regulated meats and to ban any
materials from downer or dead cattle. Also, it said it intended to ban from ruminant feed the
following materials: ruminant blood and blood products, poultry litter (which can contain
spilled feed that may contain ruminant material), and restaurant plate waste. Further, FDA
said it would require feed mills to segregate ruminant and non-ruminant feed production
lines/facilities if the mills use proteins prohibited in ruminant feeds. The agency promised
to step up its inspections of the mills and of renderers to ensure compliance.
Portions of the long-awaited rulemaking were published in the July 14, 2004, Federal
Register. One is an interim final rule to prohibit higher-risk material from the human foods,
dietary supplements, and medicines that it regulates. The materials are the same as those
banned under USDA rules: SRMs which are brain, skull, eyes, trigeminal ganglia, spinal
cord, vertebral column and related tissue, and dorsal root ganglia from animals over 30 and
tonsils and distal ileum of all cattle; mechanically separated beef; and material from
nonambulatory cattle. An accompanying proposed rule would require that affected food
manufacturers maintain records for two years to ensure compliance.
Joint FDA-USDA Rulemaking. Although it did not issue a concurrent rule to
tighten feed restrictions, FDA on July 14 did publish jointly with USDA an advanced notice
of proposed rulemaking (ANPR) asking for public input “on additional measures under
consideration to help prevent the spread of BSE.” Significantly, the FDA stated in the rule
that it “has reached a preliminary conclusion that it should propose to remove SRM’s from
all animal feed and is currently working on a proposal to accomplish this goal.” More
specifically, the ANPR says that these FDA options are under consideration, aimed at
controlling feed cross contamination risks:
! Removing SRMs from all animal feed, including pet food;
! Requiring dedicated equipment or facilities for handling and storing feed
and ingredients during manufacturing and transportation;
! Prohibiting the use of all mammalian and poultry protein in ruminant feed;
! Prohibiting materials from non-ambulatory disabled cattle and dead stock
from use in all animal feed.
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Regarding USDA policies, the ANPR sought comments on the FSIS regulatory
measures put in place in January 2004; on whether a country’s BSE status should be taken
into account when FSIS determines whether its meat inspection system is equivalent to U.S.
regulations; and on implementation of a national animal ID system, including if and how it
should move from voluntary to mandatory and which species should be covered.8
Reaction to the FDA portion on feed rules was mixed. Some industry groups believe
that enforcing the current feed restrictions is sufficient to prevent any spread of BSE, and that
further actions like removal of SRMs from all animal feed both are unnecessary and would
cost the industry many hundreds of millions of dollars in lost market revenues and waste
disposal expenses. Several consumer groups, however, complained that the ANPR simply
delayed the stronger actions they believe are needed to protect the feed supply — and
ultimately consumers — from BSE. Explaining delays to date, FDA officials noted that
shortly after their January 26 announcement, an international advisory panel recommended
a series of additional U.S. actions, which need to be fully considered (see “International
Panel Report” elsewhere in this issue brief).
Expanded Surveillance. On March 15, 2004, USDA announced it would greatly
expand testing in an attempt to reach, over a 12-18 month period, as many as it can of higher-
risk cattle, which it estimated to number 446,000. The expanded testing, which began in
June 2004, also was supposed to sample about 20,000 apparently healthy adult bulls and
cows, USDA said. By using newly approved rapid test kits, and by contracting with a
network of participating state veterinary laboratories to conduct them, in addition to using
its Ames, Iowa, diagnostic facility, officials estimate they can test at least 200,000 and
perhaps many more of the target population, they said. Samples are collected from slaughter
establishments, on farms, at rendering facilities, cattle marketing sites, and veterinary and
public health laboratories. Any rapid test that is not negative for BSE (“inconclusive” in
USDA parlance) is sent to the its national reference laboratory in Ames for confirmatory
testing, which takes longer but is considered more accurate. APHIS also began posting all
test results on its website.
Funding. The Administration’s FY2005 budget, released in early 2004, had requested
$60 million for USDA’s BSE-related activities. APHIS would receive most of the funds, or
$50 million. The $60 million request compares with BSE spending by USDA of about $32
million in FY2004, and about $13 million in FY2003.9 In addition, FDA would receive
approximately $30 million for BSE activities under the Administration’s FY2005 request
This would bring total BSE funding to approximately $90 million in FY2005.
The FY2005 USDA appropriation (H.R. 4766; H.Rept. 108-584) passed the full House
on July 13, 2004. The Senate version (S. 2803; S.Rept. 108-340) was reported by the
Appropriations Committee on September 14, 2004. Final Senate floor action has not yet
occurred; USDA operations currently are funded through November 20 under a continuing
resolution (P.L. 108-309). As the two versions now stand, the House-passed bill would
8 The FDA asked for comments within 30 days of publication and the USDA within 60 days. Both
agencies’ websites contain press releases, fact sheets, and the text of the documents.
9 Excluded from these estimates is an additional, one-time transfer of $70 million for an intensive
BSE testing program; see “Expanded Surveillance” in this report for details.
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appear to provide approximately $54 million for USDA’s BSE activities, and the pending
Senate bill would provide $54-$55 million. Both houses endorsed the Administration’s $30
million request for FDA’s BSE activities.
Testing Issues
Publicizing Test Results. In late June 2004, USDA had announced that preliminary
screening tests had shown “inconclusive” (i.e., possible positive) results for BSE in two
animals. They emphasized that neither animal, whose whereabouts they refused to identify,
had entered the food supply and that they posed no safety threat. Subsequent tests at the
Ames laboratory found that neither animal had BSE.
These were the first “inconclusive” results among the more than 92,000 cattle tested
(through late October) under the new program. Earlier, officials had warned the public that
the rapid screening tests might produce so-called false positives that later may prove to be
BSE negatives. Still, the department has come under intense criticism for both its test
sampling procedures and its reporting of results. For example, cattle markets were extremely
volatile during the several days it took to conduct more rigorous tests: the industry first
reacted negatively to USDA’s early reports of the two “false positives,” and prices then
seemed to rise and fall in response to rumors about the animals’ type, location, and status.
Officials defended their decision to make preliminary results known as quickly as
possible. It argued further that even if subsequent testing finds a U.S. cow to have BSE, the
various BSE safeguards now in place are protecting public health by assuring that no
infective materials reach consumers (or can spread to other animals). By early August
USDA had altered its announcement policy. Now, if the initial screening test is
“inconclusive,” the Department will screen two more samples from the same carcass, and
only make an announcement if one of the two samples also tests inconclusively, and
necessitates confirmation at the Ames laboratory.
Testing Procedures. BSE testing matters were the focus of a joint hearing held July
14, 2004, by the House Government Reform and Agriculture Committees. USDA’s
Inspector General (IG) testified on a draft OIG report which cites a number of limitations in
the Department’s expanded surveillance plan. For example, testing results may be unreliable
because the plan: is not truly random because participation is voluntary; assumes that BSE
is confined only to the high-risk cattle population while other studies show that healthy-
looking animals could have BSE; does not include a process for obtaining animals that die
on farms; cannot obtain a statistically appropriate geographical representation of the cattle
population; does not allow APHIS to find and test enough cattle in the high-risk population.
The final OIG report was issued in late August 2004 and generally parallels the preliminary
findings.
At the hearing and in press briefings, Secretary Veneman and other USDA officials
defended their testing, noting among other things that the OIG observations were based on
the plan before it was implemented and that many of the report’s recommendations are now
being addressed. APHIS is receiving a representative mix of samples from all locations,
reaching deeply into the higher-risk cattle population, and the statistical basis for the
sampling is sound, officials assert. They add that adjustments are being made as the result
of ongoing assessments of the program.
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After it was widely reported that USDA had failed to test a suspicious cow in Texas
in late April 2004, the Department announced revisions in its BSE sampling procedures.
(The cow was condemned so its meat never entered the food supply, USDA said.) USDA
stated that it was retraining inspectors, mandating that FSIS rather than APHIS personnel
collect brain samples, and requiring that all cattle condemned antemortem (before slaughter
for human food) be tested for BSE, not just those with suspicious symptoms. In a review of
the Texas case, OIG found that officials had erred — but did not engage in intentional
misconduct or knowingly provide misleading information — in failing to to test the
suspicious Texas cow. OIG reached similar conclusions about how the Department had
characterized the Washington BSE cow as nonambulatory in December 2003.
Private Testing. Several smaller firms (notably Creekstone Farms Premium Beef)
have expressed interest in testing all of their cattle for BSE — as the Japanese were
demanding. USDA has asserted that 100% testing is not scientifically based. USDA, which
claims authority to approve test methods and their uses under the Virus-Serum-Toxin Act,10
denied the Creekstone request. USDA and meat industry officials are concerned, among
other things, that consenting to 100% testing would undermine trade negotiations, be costly,
and misleadingly imply that BSE-tested meat is safer than untested meat.
International Panel Report
A panel of international BSE experts examined the government’s response to the U.S.
BSE discovery, and its findings were released on February 4, 2004.11 Although the infected
animal may be the only one from the 81-cow herd that survived to adulthood, and its birth
cohorts “do not represent significant risk,” the panel concluded, “it is probable that other
infected animals have been imported from Canada and possibly also from Europe. These
animals have not been detected and therefore infective material has likely been rendered, fed
to cattle, and amplified within the cattle population, so that cattle in the USA have also been
indigenously infected.” Endorsing the type of expanded testing program USDA later began
in June (see above), the panel had noted that “the BSE agent is circulating in North
America,” and the magnitude of the problem should be measured.
The panel concluded that USDA’s epidemiological investigation and the tracing and
recall of meat and byproducts had conformed to international standards insofar as possible.
However, it said that an “appropriate” national ID system was needed. The panel stated that
because downers are now being banned from the food supply, “it is imperative” for USDA
to ensure that dead and nonambulatory cattle are properly sampled and disposed of, which
likely will entail funding to help pay for the costs and supplemental measures to encourage
compliance. The panel also observed that the partial ruminant to ruminant feed ban now in
10 The text of the act is available online from the USDA/APHIS Center for Veterinary Biologics at
[http://www.aphis.usda.gov/vs/cvb/vsta.htm].
11 The panel, a subcommittee of the Secretary’s Foreign Animal and Poultry Disease Advisory
Committee, included two Swiss experts and one each from the United Kingdom, New Zealand, and
the United States, the latter Dr. Will Hueston, a veterinarian who is Director of the Center for
Animal Health & Food Safety at the University of Minnesota and a former APHIS official. The
Report on Measures Relating to Bovine Spongiform Encephalopathy (BSE) in the United States can
be viewed at [http://www.aphis.usda.gov/lpa/issues/bse/US_BSE_Report.pdf].
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place is “insufficient,” and that a complete ban on the feeding of all mammalian and poultry
byproducts to cows and other ruminants is justified
Reactions to the report were mixed. USDA officials conceded that there might be other
BSE cases found in North America but pointed out that the panel also had noted that
government agencies already are taking the most important steps necessary to protect
consumers. Some, including officials of the National Cattlemen’s Beef Association
(NCBA), argued that the panel had overstated the risks of BSE here and the steps needed to
prevent its spread, including the proposal to expand greatly the animal feed ban. NCBA and
other industry officials observed that the panel was heavily weighted with experts from
Europe, where BSE was far worse, and that some of its findings lacked a firm scientific
basis. Others, including some consumer advocates, asserted that the panel’s findings
underline their own concerns that the government has not done enough to keep BSE out of
North America.
U.S. Economic and Trade Implications
Cattle production is the largest single segment of U.S. agriculture (accounting for 20%
of U.S. farm sales annually). Exports of U.S. beef and other cattle products are viewed as
critical to long-term market growth. The value of beef and beef variety meat exports was
estimated at $3.9 billion in 2003 (or about 10% of farm value for cattle/calves). Four
countries bought approximately 90% of these exports: Japan ($1.394 billion), South Korea
($816 million), Mexico ($877 million), and Canada ($331 million).
Within days of the BSE announcement, most importing countries had halted some or
all U.S. beef and cattle imports. U.S. officials have worked to reassure foreign authorities
about the safety of U.S. beef. Of the major markets, both Mexico and Canada have been
reopening their borders to some U.S. beef and veal. Exports to Mexico resumed in March
2004 and had reached about 43% of year-earlier levels by August 2004. Exports to Canada
(January-August 2004) appeared to be approximately 14% of year-earlier levels. Japan and
Korea remain closed.
Japan. On October 23, 2004, U.S. and Japanese negotiators announced that they had
made progress in negotiations to resume two-way beef trade (even as Japan was reporting
a possible 15th BSE case there). According to a joint statement:
! The United States will establish, with Japanese concurrence, a marketing
program — a modified version of its Beef Export Verification (BEV)
Program — that would enable a resumption of some U.S. exports to Japan
for an interim period. BEV would certify that only beef products from cattle
of 20 months or younger are shipped. The animals’ age must be verified
through specified animal production records. However, within 45 days, a
study is to be completed to determine how USDA’s carcass grading system
could be used to verify age through examination of physiological
characteristics.
! In addition, the United States agreed to an expanded SRM definition, to
include — for cattle of all ages — the entire head except tongues and cheek
meat, tonsils, spinal cords; distal ilieum (two meters from connection to
caecum); and vertebral column (excluding the transverse processes of the
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thoracic and lumbar vertebrae, the wings of the sacrum and the vertebrae of
the tail). In other words, a firm apparently would have to remove these
materials from all cattle in order to sell beef to Japan. USDA’s current SRM
list is somewhat different and generally covers only cattle over 30 months
of age (see page 5).
! The two countries will evaluate this interim system by July 2005, based in
part on a scientific evaluation by international health experts, and modify it
if appropriate.
! The United States will permit Japanese beef and products into its market
following relevant domestic rule-making procedures. (Japan exported an
average of less than $1 million annually of Kobe or Wagyu specialty beef to
the United States through 2001, prior to a U.S. ban on their beef.)
Japanese authorities are considering a plan to scale back their BSE testing from all cattle
to only those over 20 months old. The change, as well as another to permit the U.S. beef
imports, is still subject to further review, rulemaking, and public hearings in Japan. The
United States also will conduct its own rulemaking before admitting Japanese beef. Because
numerous details must be negotiated before any agreement is final, and because rulemaking
procedures in both countries can be lengthy, most observers do not expect that U.S. beef will
be eligible for the Japanese market until well into 2005.
Moreover, U.S. industry may have difficulty satisfying the new Japanese requirements,
a number of industry observers believe. Although approximately 70% of the 35 million U.S.
cattle each year are believed by USDA to be 20 months of age or younger, verifiable age
records may only be available for anywhere from 10% to 25% of cattle, according to various
estimates. Age verification and the expanded SRM definition would create new compliance
costs for packers and their suppliers. “This leaves the U.S. beef industry in the unenviable
position of having to accept an agreement that may be economically unviable until Japan
relents on the age issues,” Cattle Buyers Weekly commented.12
“There are still questions in our mind about how and when the beef trade will resume,”
another industry analyst was quoted by Reuters. “Stopping short of testing every one of our
animals, all we did was acquiesce to every other demand they made,” another analyst told
Reuters, which reported that U.S. cattle futures prices actually dropped on the trading day
following the announcement.13 Nonetheless, NCBA, the American Meat Institute (AMI), and
the U.S. Meat Export Federation (USMEF) hailed the agreement as an important step
forward.
USDA has predicted that unless more markets reopen, beef and veal exports globally
will be 446 million pounds in 2004, or 17% of the 2003 level of 2.523 billion pounds, rising
only to 600 million pounds in 2005. In Japan, other countries, notably Australia, have filled
the U.S. lost market share of beef sales.
Industry Impacts. Domestic cattle and beef prices by late 2003 had reached record
highs due to a tight supply-demand situation. The immediate impact of the BSE case was
12 “Beef to Japan is Still Months Away,” Cattle Buyers Weekly Newsflash, October 25, 2004.
13 “Analysts Cautious on U.S.-Japan Beef Deal,”Reuters News, October 25, 2004.
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reflected in a drop in cash prices for Nebraska steers from $91 per 100 pounds (cwt.) to about
$75 per cwt. the following week. Cattle futures markets also dropped by allowable limits for
three consecutive days before closing at 15% below pre-BSE levels. Prices have recovered
substantially since January. A decline in U.S. cattle inventories due in part to widespread
drought conditions in cattle country, along with strong domestic demand for beef, kept farm
prices relatively high during the first part of 2004. (Cattle futures again dropped by
allowable limits in late June after two inconclusive BSE tests were reported, but prices again
recovered after confirmatory testing found the two inconclusives to be negative for BSE.)
In October 2004 USDA forecast average U.S. fed steer (i.e., slaughter-ready cattle)
prices at $85 per cwt. for all of 2004, compared with an earlier 2004 prediction of $72-$77;
this is close to a USDA forecast, made just before the BSE case, of $84-$91 per cwt. The
2005 price forecast is $83-89. Average fed steer prices were $85 in 2003 and $67 in 2002.

Cattle producers were losing about $10 per cwt. or $125 per head due to lost access to
the Japanese, Korean, and other Asian markets, Cattle-Fax, a marketing information service
associated with the industry, reported on July 30, 2004. The U.S. market will have to absorb
23 million more pounds of beef weekly or 1.2 billion pounds for the year due to lost exports,
according to Cattle-Fax. The USMEF in August 2004 said that lost export premiums on the
top 10 cuts exported were costing the beef industry about $80 per head or more than $2.2
billion annually, plus another $100 per head due to the price impacts of additional beef
supplies.14
Increased business costs are anticipated in order to comply with new and/or future BSE
safeguards adopted in response to the U.S. case. In a preliminary analysis released April 7,
2004, FSIS estimated that its major January 12 rules (see “Policy Changes After the U.S.
BSE Case,” above) would result in total annual costs to industry of between $110 million and
$149 million, exclusive of some costs such as segregating animals over 30 months and their
carcasses, and foreign equivalency measures. On the other hand, in discussing potential
benefits, FSIS notes: “Failure to assure consumer confidence in the U.S. beef supply could
easily reduce cash receipts to the cattle sector by $5 to $10 billion annually. Net farm income
could decline by $3 to $6 billion annually...”15
Canadian BSE Case
Investigation. Canadian officials announced on May 20, 2003, that they had
discovered BSE in an Alberta cow (later found to have been born in Saskatchewan or Alberta
in early 1997). The cow’s brain had been pulled for testing in late January 2003. No meat
from the cow became human food, according to the Canadian Food Inspection Agency
(CFIA). An investigation concluded that the infected cow most likely contracted BSE
through consumption of feed containing BSE-contaminated meat and bonemeal (MBM) from
14 See also CRS Report RS21709, Mad Cow Disease and U.S. Beef Trade; and the special ERS
report U.S. 2003 and 2004 Livestock and Poultry Trade Influenced by Animal Disease and Trade
Restrictions, July 2004.
15 Preliminary Analysis of Interim Final Rules and an Interpretive Rule to Prevent the BSE Agent
From Entering the U.S. Food Supply, which can be accessed via the FSIS website. Address:
[http://www.fsis.usda.gov/oa/topics/bse.htm#3].
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ruminants, probably before the feed ban. Canadian authorities focused on, among other
possibilities, the slaughter and rendering into feed (at either a U.S. or Canadian feed plant)
of some imported British cattle that included one with BSE that was found in 1993.16 A total
of 2,800 cattle were killed and tested for BSE, with no other cases found. CFIA said
Canadian actions had contained any possible spread. Canadian and provincial governments
have provided hundreds of millions of dollars in various aid to the industry for economic
losses caused by the BSE incident. The CFIA website is at [http://www.inspection.gc.ca/
english/anima/heasan/disemala/bseesb/bseesbindexe.shtml].
USDA Actions to Readmit Canadian Beef.17 In late May 2003, the United States
had issued an interim final rule placing Canada under its standing BSE import restrictions
— that is, all Canadian ruminants (cattle, sheep, goats, deer, elk, etc.) and ruminant products
were prohibited from entering the United States. On August 8, 2003, USDA announced that
it would begin to accept applications for permits to import selected ruminant products from
Canada, including boneless beef from cattle under 30 months old and boneless veal from
calves no older than 36 weeks at slaughter; and boneless sheep and goat meat from animals
under 12 months old. USDA’s decision was based on what it said was a “thorough scientific
analysis” that found minimal risk from these imports. The announcement was not
accompanied by formal rulemaking.
On November 4, 2003, USDA did publish in the Federal Register a proposed rule to
change its standing BSE policy so as to allow imports of certain live ruminants and products
from “minimal risk” regions, including Canada. Permitted would be imports of cattle for
slaughter under 30 months old; sheep and goats for slaughter under 12 months; cervids (e.g.,
deer and elk) for immediate slaughter; and various other products from these animals.
However, APHIS already had begun to permit products beyond those announced on
August 8, 2003. On August 15, 2003, APHIS listed the so-called low risk Canadian products
for which it would grant permits. In addition to the products announced on August 8 (see
above), the August 15 list now included bone-in as well as boneless veal (but not bone-in
beef), and trimmings (if such trim was from otherwise low-risk boneless cuts). A reported
October 22 reposting of the list was expanded to include beef lips, tongues, hearts and
kidneys. The August 15 and October 22 lists were posted on the APHIS website, but neither
was accompanied by Federal Register issuance, press release or other public communication.
On April 19, 2004, USDA published on its website, again without further rulemaking
or public notice, yet another list and memorandum effectively expanding permitted Canadian
products to include bone-in as well as boneless beef from under-30-month cattle. A group
of cattlemen filed a lawsuit to stop the expanded imports, and, on April 26, a federal judge
in Montana issued a temporary restraining order to halt the imports. The judge observed that
two BSE cases in Canadian-raised cows have been detected in the past 11 months “through
16 Harvard Center for Risk Analysis. Evaluation of the Potential Spread of BSE in Cattle and
Possible Human Exposure Following Introduction of Infectivity into the United States from Canada,
released October 2003, at [http://www.aphis.usda.gov/lpa/issues/bse/harvard_10-3/text_wrefs.pdf].
The review noted it is possible some infected Canadian feed also has entered the United States. Both
countries have vigorous cross-border trade in beef and cattle, including dairy cattle, and in feed.
17 For additional details see CRS Report RL32627, Bovine Spongiform Encephalopathy (“Mad Cow
Disease”) and Canadian Beef Imports.
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very limited testing. If imported Canadian beef products contain the BSE agent, USDA’s
April 19, 2004, action may result in a fatal, non-curable disease in humans who consume
those products.” Among other issues, the judge cited concerns about whether USDA
followed appropriate rulemaking procedures.18 USDA subsequently reached an agreement
with plaintiffs that it would no longer allow beef and veal products beyond the types listed
on August 15, 2003 (see above). Any additional Canadian products (including bone-in beef
or live cattle) will not be permitted until after issuance of the final rule that was first
proposed on November 4, 2003, USDA promised.
According to the department, a total of 518.6 million pounds of Canadian beef and veal
products entered the United States between September 1, 2003, and April 30, 2004. Of this,
18.9 million pounds were boneless or bone-in veal; 241 million pounds were boneless beef
cuts; 238 million pounds were boneless beef trim; nearly 7 million pounds were liver, tripe
or cheek meat; 1.5 million pounds were tongue, heart or kidney; 5.6 million pounds were
“further processed” including partly or fully cooked hamburger, hot dogs, deli meats,
sausages, jerky, etc., and about 142,000 pounds were bone-in beef cuts. USDA officials
stated that only 7.3 million pounds of the 518.6 million pound total incorrectly came in under
categories not covered by the August 8 announcement (as modified by the August 15 list),
and that none of these additional products posed any food safety risk. Officials stated further
that Secretary Veneman had been unaware that APHIS had expanded the list of eligible
products after August 8, 2003.
Canadian imports came under renewed scrutiny after USDA announced on July 28,
2004, a recall of 170,000 pounds of ground beef patties after their U.S. manufacturer
inadvertently included 41,000 pounds of Canadian beef in them that should not have been
imported. FSIS stressed that the product was safe and simply had been mislabeled by a
Canadian inspector.
Congressional Response
BSE could remain a priority for many Members of Congress, particularly if one or more
additional cases emerge. A number of Senators and Representatives have been sharply
critical of USDA’s handling of various aspects of the BSE issue in hearings, speeches, and
communications to the Department. The House and Senate Agriculture Committees held
hearings on the issue on January 21 and January 27, 2004, respectively. The Senate
Appropriations Committee held a BSE hearing on February 24, 2004. The House
Agriculture and Government Reform Committees held a joint hearing on July 14, 2004, on
BSE testing and related issues.
Although both USDA and FDA are using existing statutory authorities to implement the
various changes, it is conceivable that amendments to such laws might be considered for
further enhancements. (For appropriations activity, see “Funding” on page 7.)
Companion bills offered in 2003 (S. 1202 and H.R. 3546) would require USDA to
establish a traceability system for all stages of production, processing, and distribution of
both meat and poultry and their products, essentially from the birthplace of source animals
18 Ranchers Cattlemen Action Legal Fund USA vs. USDA (CV-04-51-BLG-RFC).
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to the consumer. In the second session, other bills (H.R. 3787, H.R. 3822, H.R. 3961, H.R.
4005, S. 2008, S. 2070) setting various requirements for a national livestock ID system have
been introduced. Ruminant ID systems are required in wider-ranging BSE and other prion
prevention-related bills (S. 2007 and H.R. 3714, respectively). Hearings on animal ID were
held in the Senate and House Agriculture Committees on March 4 and 5, 2004, respectively.
The BSE issue was raised in the debate over whether to delay and/or modify mandatory
country-of-origin labeling (COOL) of meats and other foods, once set to take effect in
September 2004. The conference agreement on the consolidated FY2004 appropriations bill
(H.R. 2673) postpones mandatory COOL for two years. It was signed into law (P.L. 108-
199) on January 23, 2004. Several bills (H.R. 3732, H.R. 3993, S. 2451) have since been
introduced to reinstate the original 2004 implementation date. However, the House
Agriculture Committee on July 21, 2004, approved H.R. 4576, which would replace
mandatory COOL with a voluntary program. Other bills amending COOL include H.R. 2270
and H.R. 3083 (see also CRS Report 97-508, Country-of-Origin Labeling for Foods).
In November 2003, the Senate had approved an amendment to the FY2003
appropriations bill to prohibit FSIS inspections of downed animals (effectively keeping them
out of the food supply). A similar House floor amendment to the bill last summer was
narrowly defeated, and the Senate amendment was removed in the House-Senate conference
on the measure. Earlier, both houses of the 107th Congress had included in their respective
farm bills a ban on marketing downers unless they were humanely euthanized. Farm bill
conferees dropped the provision from the final version (P.L. 107-171), instead directing the
Secretary to study industry downer practices and issue rules if necessary. Pending bills to
ban downers include H.R. 2519 and S. 1298.
Another bill, H.R. 3705, would require BSE tests on all cattle destined for human food.
S. 2051 focuses on strengthening animal feed rules. Several (H.R. 2057, H.R. 2430, H.R.
2431, H.R. 2636, H.R. 4001, S. 1036) have been introduced to increase support for research
and surveillance on chronic wasting disease (CWD) in deer and elk or on other TSEs.
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