Order Code IB10127
CRS Issue Brief for Congress
Received through the CRS Web
Mad Cow Disease:
Agricultural Issues for Congress
Updated June 14, 2005
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 (December 2003)
Meat Recall
Cow’s Origin and Movements
What Is the BSE Risk in the United States?
Harvard Risk Analysis
International Review Team (IRT)
U.S. BSE Safeguards
Import Restrictions
Targeted Domestic Surveillance
Testing Issues
Domestic Cattle “Feed Ban”
Meat Inspection Changes
Animal Identification and Traceability
Funding
Industry Economic Implications
Japan Trade Issues
Canada Trade Issues
May 2003 BSE Announcement
January 2005 Announcements
Canadian Feed Ban
USDA Rulemaking to Readmit Canadian Beef and Cattle

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Mad Cow Disease: Agricultural Issues for Congress
SUMMARY
Most countries banned U.S. beef after the
the rule; USDA is appealing the decision.
December 2003 U.S. report of BSE (bovine
spongiform encephalopathy, or mad cow
In Congress, the Senate on March 3,
disease) in a Canadian-born cow. Several of
2005, passed a joint resolution (S.J.Res. 4) to
these markets have partially reopened. How-
overturn the Canada rule. However, a resolu-
ever, Japan and Korea, which together had
tion must pass the House (where similar
purchased 57% (by value) of all U.S. beef
H.J.Res. 23 was introduced) and be signed by
exports in 2003, remain closed.
the President, which most observers believe is
unlikely. Several other BSE-related measures
Japan says it is moving to ease its domes-
have been introduced recently, such as a
tic rule that requires BSE testing of all cattle,
House resolution (H.Res. 137) urging eco-
and to finalize another to admit U.S. beef, in
nomic sanctions against Japan if it does not
order to implement an October 2004 frame-
begin to accept U.S. beef. Others include
work agreement to restart trade. However,
H.R. 187, H.R. 384, H.R. 1254, H.R. 1256,
U.S. officials and some Members of Congress
H.R. 2068, S. 73, S. 108, and S. 294.
say that rulemaking is proceeding too slowly.
USDA and other experts contend that the
In Canada, the first native BSE case was
risk to human health from one or a few U.S.
reported in May 2003. Two more Canadian
BSE cases is minimal. Nonetheless, USDA
cases were confirmed in early January 2005.
has intensified efforts to improve BSE safe-
The first three North American cases were in
guards, including banning downer
cattle born before both countries banned, in
(nonambulatory) cattle from human food;
1997, the practice of feeding most ruminant
keeping from the food supply additional
material back to ruminants, including cattle.
higher-risk animal parts; accelerating work on
The fourth (third Canadian) case was in a cow
a national animal identification system for
born in March 1998. In all four cases, BSE-
disease purposes; and increasing funds for
contaminated feed is considered the most
BSE-related activities.
likely cause of infection.
The Food and Drug Administration
USDA said that total U.S. beef exports in
(FDA) is still weighing possible rules to tight-
2004 reached only 17% of their 2003 level of
en its feed controls. Further action is pending.
about 2.5 billion pounds. However, strong
domestic demand and tight cattle supplies
From June 2004 to June 10, 2005, some
have kept U.S. cattle prices relatively high.
375,000 higher-risk U.S. cattle had been
tested for BSE, all negative, under an ex-
Lower-risk Canadian beef has been
panded surveillance program. However, one
permitted into the United States since August
sample that had tested negative in November
2003. As the two new BSE cases were emerg-
2004 has since tested positive using a different
ing, USDA published a final rule, on January
testing method. USDA on June 13 was seek-
4, 2005, to also allow younger live cattle and
ing clarification of the conflicting results with
additional Canadian ruminant products to
help from an international reference laboratory
enter. However, a federal judge on March 2,
in England. This event has renewed interest
2005, issued a preliminary injunction blocking
in BSE testing methods here and abroad.
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
On June 10, 2005, the Secretary of Agriculture announced that a brain sample taken
from a U.S. cow in November 2004 had reacted positively to a test for BSE. USDA is
sending a sample to the BSE World Reference Laboratory in Weybridge, England, for further
testing. The Weybridge results reportedly were not due for at least several days.
Screening tests had been conducted on this same cow in November 2004, and at that
time were reported as “inconclusive” (i.e., possibly positive) for BSE. However, USDA
determined that the animal was negative for BSE after conducting follow-up analysis using
the so-called “IHC” or immunohistochemistry test method. Prodded by its Office of
Inspector General, USDA this month retested a sample from the cow using another method,
called the Western blot test. The retested sample showed a positive reaction for BSE. Both
the IHC and Western blot tests are recognized by the international organization for animal
health, known by its French acronym, OIE.
Most details about the animal were not immediately forthcoming. Cattle Buyers
Weekly, a trade publication, had reported last November that it was a 12-year-old, U.S.-born
beef cow in Texas. The Secretary did state on June 10 that because the cow in question was
a nonambulatory animal, it never entered the food supply and was incinerated. He and other
USDA officials continue to reassure the public that a “sound system of interlocking
safeguards” are protecting human and animal health. In fact, they had predicted since the
start of their special, intensive BSE surveillance program in June 2004 that additional BSE-
positive cattle might be found but would not alter the U.S. risk profile. More than 375,000
cattle have been tested so far under this program.
Regardless of the outcome of testing, the long-term impacts on trade are unclear at this
time. The United States and Canada, where four cattle with reported BSE have been born,
have been struggling to reopen foreign markets which had closed their borders to much of
the beef from both countries. For example, despite reports that Japan is now making
progress on implementing the necessary rules leading to renewed imports of U.S. beef,
Japanese officials still have provided no date certain for reopening their market. The
Japanese and Korean markets, which together had accounted for 57% of all U.S. beef exports
in 2003, remain closed.
Efforts to normalize trade with Canada have been slowed by a U.S. district court judge’s
March 2 order blocking implementation of USDA’s January 4, 2005, final rule to permit
imports of younger live cattle from Canada. USDA is appealing the order. An appeals court
is expected to hear arguments on July 13; the U.S. district judge has scheduled a hearing for
July 27 on whether to make his temporary injunction permanent.
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
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1986. (Most of the rest occurred elsewhere in Europe.) Reported cases of BSE have
declined steeply since their peak in 1992 in Great Britain.1
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 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 160 people have been diagnosed with vCJD since
1986, most of them in Great Britain.
U.S. Case (December 2003)
USDA announced on December 23, 2003, that brain samples taken from a Holstein
dairy cow in Washington State 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 precautionary 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 health agency,
the 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
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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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. U.S. authorities
eventually located 28 of the 80 animals at eight different facilities, mostly in Washington.
None of those found tested positive for BSE. 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.
What Is the BSE Risk in the United States?
Harvard Risk Analysis. A USDA-funded study issued in November 2001 by the
Harvard Center for Risk Analysis, based on a 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.”
After a BSE case was found in Canada in May 2003 (see below), USDA asked Harvard
to reassess the risk. 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 “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 against an actual small BSE outbreak
in Switzerland and found them “reasonably close to empirical observations.”
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
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.”2
2 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,
(continued...)
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International Review Team (IRT). After the U.S. BSE discovery in December
2003, USDA named a panel of international BSE experts to examine the government’s
response, and its findings were released on February 4, 2004.3 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.” Urging the type of expanded testing program USDA later began (see
below), the panel 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 also
observed that the partial ruminant to ruminant feed ban now in place is “insufficient,” and
that a complete ban on the feeding of all mammalian and poultry byproducts to cows and
other ruminants is justified.
USDA officials conceded that other BSE cases might be found in North America but
pointed out that the panel also noted that government agencies already had instituted the
most important safeguards. Some IRT critics, including the National Cattlemen’s Beef
Association (NCBA), argued that the IRT had overstated BSE risks and needed preventative
measures, including the proposal to expand greatly the animal feed ban. NCBA and industry
officials suggested 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 underlined their own
concerns that not done enough has been done to keep BSE out of North America.
U.S. BSE Safeguards
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
ruminants and most ruminant products from all of Europe (since 1997). In late 2000, USDA
2 (...continued)
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.
3 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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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. This approach appears consistent with new BSE guidelines adopted in May
2005 by the World Organization for Animal Health (or OIE, the French acronym). A key
assumption for this guidance is that countries with strong safeguards should not be penalized
merely because rigorous testing has found an acceptably low number of BSE cases.4
Targeted Domestic Surveillance. Among other duties, meat inspectors examine
every animal entering meat slaughter plants. FSIS indicates it has not permitted cattle
showing suspicious neurological symptoms to be slaughtered for human consumption. It has
sent brain samples from such animals to an APHIS laboratory in Ames, Iowa, as part of what
USDA called a “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.”5 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 35 million slaughtered each year.
Critics argued that this surveillance was inadequate to detect BSE. 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 argued that its
program was testing many more animals than recommended by the OIE, 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, 12-18 month effort to determine the extent, if any, of BSE in higher-risk cattle,
which it estimated to number 446,000. The effort also was supposed to sample about 20,000
apparently healthy adult bulls and cows, USDA said, but as of late spring 2005 that testing
had not been conducted. Targeting the higher-risk animals, USDA has contracted with a
network of participating state veterinary laboratories to conduct screening using rapid test
kits, in addition to using its own Ames, Iowa, diagnostic facility. 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 national reference laboratory in Ames for
confirmatory testing, which takes longer but is considered more reliable. As of June 10,
2005, more than 375,000 cattle had been tested, all negative for BSE, according to the
APHIS website.6
4 See the OIE website at [http://www.oie.int/eng/info/en_statesb.htm].
5 USDA backgrounder on BSE, July 10, 2003. For more details, see CRS Report RL32922, Meat
and Poultry Inspection: Background and Selected Issues.
6 Test results are posted at [http://www.aphis.usda.gov/lpa/issues/bse_testing/]. However, a retested
sample from one cow has tested positive; see “Most Recent Developments” on page 1.
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Testing Issues. BSE testing was 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,
issued in late August 2004, generally paralleled the preliminary findings.
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 have been 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 asserted. They added that adjustments have been
made as the result of ongoing assessments of the program.
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 test the suspicious
Texas cow. OIG reached similar conclusions about how the department had characterized
the Washington BSE cow as nonambulatory in December 2003.
It was OIG that in spring 2005 urged USDA to retest samples from a cow that was first
suspected of BSE in a screening test in November 2004, but which later tested negative when
USDA applied its so-called “gold standard,” or IHC test method. This retesting, which has
since yielded a possible BSE positive result, was done using another method sanctioned by
the OIE, the so-called Western blot. This has sparked renewed interest generally in which
test might be the most useful for BSE surveillance.7
Domestic Cattle “Feed Ban”. The Food and Drug Administration (FDA), which
regulates animal feed ingredients, banned most mammalian proteins from cattle feed on
August 4, 1997.8 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
7 For an explanation of the two tests, see the June 2005 APHIS factsheet at [http://www.aphis.usda.
gov/lpa/pubs/fsheet_faq_notice/faq_BSE_confirmtests.pdf].
8 See CVM and Ruminant Feed (BSE) Inspections, at [http://www.fda.gov/cvm/RuminantFeed
Inspections.htm]. For background on the rendering industry, also see CRS Report RS21771, Animal
Rendering: Economics and Policy.
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ensure compliance, FDA enforcement includes education as well as 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).
Some industry groups argue that existing feed restrictions are sufficient to prevent any
spread of BSE, and that further actions (like removal of higher-risk cattle parts from all
animal feed; see below) both are unnecessary and would cost the industry many hundreds of
millions of dollars in lost market revenues and waste disposal expenses. Critics, however,
contend that stronger actions are needed to protect the feed supply — and ultimately
consumers — from BSE.
The Government Accountability Office (GAO) has been critical of the enforcement of
the current FDA ban. Most recently, a February 2005 GAO report concluded that FDA had
made improvements in its management of the feed ban, but that program weaknesses
continue to limit its effectiveness, placing U.S. cattle at risk of spreading BSE. Among the
weaknesses cited by GAO are that FDA has no uniform approach for identifying all the
additional feed manufacturers, on-farm mixers, and other feed industry businesses beyond
the approximately 14,800 firms it has inspected so far; that it has not reinspected
approximately 2,800 of the firms it has inspected and does not know whether they use
prohibited materials (i.e., cattle parts that might harbor the BSE agent) in their feed; that
FDA has not required a warning label on feed for export even though it is not intended for
cattle and other ruminants; and that it has not always alerted USDA and the states when it
learns that cattle may have been given prohibited feed.
In July 2003 and January 2004, FDA reported that feed industry compliance with the
ban had reached 99%. However, that may be misleading, because the compliance rate was
last based on inspections of only about 570 firms, GAO reported. The GAO report added
that FDA does not include all serious violations in the calculations because it reclassifies
firms as being in compliance once they correct violations, no matter how long a problem
existed, among other problems with the data.
FDA had promised in January 2004 that it would strengthen its feed controls, saying
that 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.
On July 14, 2004, FDA published jointly with USDA an advanced notice of proposed
rulemaking (ANPR). One section of the July 14 Federal Register notice asked 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;
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! 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.
Some have criticized FDA for moving too slowly on changing the feed rule. FDA
officials have defended their pace, noting that they have had to consider fully the IRT
recommendations (see above) and, more recently, the results of the BSE testing program by
USDA. In the 109th Congress, S. 73 would ban specified risk material from all animal feeds.
Meat Inspection Changes. On December 30, 2003, the Secretary of Agriculture
announced the following steps to strengthen FSIS-regulated practices where cattle are
slaughtered and processed.
Downers. USDA 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 roughly 35 million U.S. cattle slaughtered
yearly. The downer ban has been among the most controversial changes for producers, who
say they incur large losses when they cannot sell cattle unable to walk for reasons unrelated
to BSE (e.g., a broken leg). (Interim final rule, January 12, 2004, Federal Register.)
Specified Risk Material (SRM). USDA 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
were considered inedible for human food.) An SRM declaration prohibits the use of these
cattle parts in the human food supply. 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.)
FDA published, in the July 14, 2004, Federal Register, an interim final rule to prohibit
higher-risk material from the human foods, dietary supplements, and medicines that it
regulates. The materials are 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. This proposal was still pending as of June 2005.
Advanced Meat Recovery (AMR). AMR mechanically removes muscle tissue from
bone, and the paste-like tissue can be labeled as “meat.” FSIS previously had regulations to
prohibit such products to be labeled as “meat” if they contain spinal cord. This newer rule
expands that prohibition to include additional nerve tissue. Also, AMR no longer can be
used for cattle 30 months and older. Earlier FSIS sampling had found nervous system tissue
in about a third of AMR beef. (Interim final rule, January 12, 2004, Federal Register.)
“Test and Hold”. All products 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.)
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Stunning. USDA banned 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.)
Animal Identification and Traceability. The Secretary also said in January 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 earlier 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
to begin implementation, which has started with a study of existing animal ID projects and
cooperative agreements with states. On August 5, 2004, USDA announced 29 states and
tribal agencies were receiving $11.64 million of the total, to register premises, collect data,
and test ID technologies.
These activities are still underway; APHIS now projects that all states will have the
capability to register individual premises (but not yet animals) by this year, and that
individual animal numbers will also become available this year. Some argue that USDA,
which has embarked on an all-farm species approach, is progressing too slowly; NCBA, for
example, is now proposing to establish a privately operated system for cattle that could be
ready for use by October 2005 and fully operational by October 2006. Interestingly, the BSE
issue has helped to accelerate animal ID, originally intended to track mainly contagious
diseases — which BSE is not.
Most observers agree that voluntary ID will become mandatory in the future. In
Congress, H.R. 1254 would require the establishment of a nationwide electronic animal
identification system. H.R. 1256 deals with protecting the information provided by
producers from unauthorized scrutiny and use. Additional animal ID bills are anticipated.
(See CRS Report RL32012, Animal Identification and Meat Traceability.)
Funding. The Administration’s FY2006 budget, released in early 2005, requests a
total of $66 million for USDA’s BSE-related activities, including $33 million to continue
work on an animal ID program, $21 million for BSE testing/surveillance, and $12 million
for research. Total USDA spending for BSE in FY2005 is estimated at $123 million, of
which $69 million was for BSE testing (and most of that for the special surveillance program
noted above), $49 million to launch the animal ID effort, and $3 million for research. Much
of the FY2005 funding was through transfers from the CCC account rather than through
direct appropriation by Congress. USDA’s BSE spending in FY2004 was an estimated $51
million. (Additional BSE amounts are requested for FDA and other agencies.) The FY2006
USDA appropriation measure (H.R. 2744) passed the House on June 8, 2005.
Industry Economic 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 by USDA to be $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). According to a
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more recent USDA estimate, when all types of beef and ruminant product exports are
counted, their 2003 export value was $7.5 billion.
Many importing countries halted imports of U.S. beef and cattle soon after the
December 2003 U.S. BSE announcement. Mexico and Canada have reopened their borders
to some U.S. beef and veal, and by early 2005, officials reported progress toward regaining
other markets. USDA estimated that U.S. beef and veal exports globally reached 461 million
pounds in 2004, or 17% of the 2003 level of 2.523 billion pounds. USDA has predicted that
unless more markets reopen, exports would reach only 625 million pounds in 2005.
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 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 recovered substantially
after January 2004. 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 much of 2004.
USDA has reported that average U.S. fed steer (i.e., slaughter-ready cattle) prices were
$84.75 per cwt. for all of 2004, compared with an earlier 2004 prediction of $72-$77; this
is near the lower end of a USDA forecast, made just before the BSE case, of $84-$91 per
cwt. The 2005 price forecast (as of May 2005) was $85-$89. Average fed steer prices were
$84.69 in 2003 and $67.04 in 2002.

NCBA recently placed cattle producers’ export losses at $175 per head, or $4.7 billion
total. The U.S. Meat Export Federation (USMEF) has estimated that lost export premiums
on the top 10 cuts exported were costing the beef industry about $100 per head or more than
$2.8 billion annually.9
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...”10
In April 2005, Kansas State University (KSU) issued a study on the impact of the BSE
situation on the U.S. beef industry. Based on a trade model it developed, KSU estimated that
9 The NCBA figures were used at the House’s March 1, 2005, hearing on BSE. Also, USDA held
a roundtable on “The Safety of North American Beef and the Economic Effects of BSE on the U.S.
Beef Industry,” on June 9, 2005, in St. Paul. For more information, see the USDA website at
[http://www.usda.gov], and also CRS Report RS21709, Mad Cow Disease and U.S. Beef Trade.
10 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 at [http://www.
fsis.usda.gov/Fact_Sheets/Bovine_Spongiform_Encephalopathy_BSE/index.asp].
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total U.S. beef industry losses due to the loss of beef and offal exports in 2004 ranged from
$3.2 billion to $4.7 billion. Among other observations in the report were that the new FSIS
rules (see above) cost the industry approximately $200 million.11
Japan Trade Issues
Some Asian markets are among those now beginning to accept some U.S. beef.
However, Japan and Korea are considered vital to the long-term export picture. Japan, along
with Korea, purchased 57% of the $3.9 billion in U.S. beef, veal, and beef variety meat
exports in 2003. Japan and Korea account for 87% of the approximately $2.5 billion of
exports (2003 value) still banned worldwide.
On October 23, 2004, U.S. and Japanese negotiators announced that they had made
progress in negotiations to resume two-way beef trade. 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 — to enable resumption of some U.S.
exports to Japan for an interim period. BEV would certify that only beef from cattle of 20
months or younger are shipped. 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 thoracic and lumbar vertebrae, the wings of the
sacrum and the vertebrae of the tail). So, in addition to proving that the beef is from cattle
under 21 months old, a firm also would have to remove these materials from cattle of all ages
in order to satisfy Japan. USDA’s current SRM list is somewhat different and generally
covers only cattle over 30 months.
The announcement stated that the two countries would evaluate this interim system by
July 2005 and modify it if appropriate. The United States would 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 its beef.)
However, as July 2005 approaches, Japan, which has reported 20 cases of BSE in its
cattle herd, has not yet finalized what it says are necessary (1) rules to change its domestic
testing policy; and then (2) rules actually permitting U.S. imports. These rules have many
steps, involving a number of different agencies, including review by Japan’s independent
Food Safety Commission. Although Japan claims it is making progress on both rule
changes, it has not provided a date certain for completing these activities. Most observers
do not expect any U.S. beef to enter Japan before summer 2005 at the earliest.
U.S. industry may have difficulty satisfying the Japanese requirements, some industry
observers believe. Roughly 70% of the 35 million U.S. cattle each year are believed by
USDA to be 20 months of age or younger, but verifiable age records may only be available
for anywhere from 10% to 25% of cattle, according to various estimates. Age verification
11 KSU Agricultural Experiment Station and Cooperative Extension Service, The Economic Impact
of BSE on the U.S. Beef Industry: Product Value Losses, Regulatory Costs, and Consumer Reactions,
available online at [http://www.agmanager.info/livestock/marketing/bulletins%5F2/industry/].
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and the expanded SRM definition would create new compliance costs for packers and their
suppliers.
Creekstone Farms Premium Beef had expressed interest in testing all of its cattle for
BSE — as the Japanese had once demanded. USDA has long 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, denied the Creekstone request that it be allowed to
test all of its bovines. USDA and meat industry officials apparently are concerned, among
other things, that consenting to 100% testing could undermine trade negotiations, be costly,
and imply that BSE-tested meat is safer than untested meat.12
The sluggish pace of the Japanese negotiations has frustrated the beef industry and many
Members of Congress, who believe opening the Japanese market will convince other Asian
nations, including Korea, to follow suit. H.Res. 137 has been introduced, which calls for
economic sanctions against Japan if it does not permit U.S. beef. Also, 20 Senators on
February 18, 2005, wrote to the Japanese ambassador, indicating that consideration of
economic sanctions is possible. (See CRS Report RS22115, Japan-U.S. Beef Trade Issues.)
Canada Trade Issues
The BSE situation in Canada has weighed heavily on U.S. trade policy considerations.
Some argue that too hastily expanding U.S. imports of beef and cattle from Canada, where
four BSE cattle were born, will endanger the U.S. cattle herd and undermine negotiations
with the Japanese. Others counter that USDA’s steps to reopen the border for Canada
demonstrate to other countries that the United States is acting on the basis of scientific
evidence that Canada’s safeguards are effective — and that others should do likewise.
May 2003 BSE Announcement. 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 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 plant) of some imported British cattle that included one with BSE that was
found in 1993.13 Some 2,800 cattle were killed and tested; no other BSE cases were found.
January 2005 Announcements. Canada found a second BSE case in December
2004, and confirmed it on January 2, 2004. The CFIA announced that the animal was an
12 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]. See also CRS Report RL32414, The Private Testing
of Mad Cow Disease: Legal Issues.
13 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.
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Alberta dairy cow born in 1996, and suspected that it had become infected by contaminated
feed before the 1997 feed ban. On January 11, 2004, CFIA announced its third confirmed
case, this in an Alberta beef cow born in March 1998 — some seven months after the feed
ban was published. CFIA stated that no part of either animal entered the human food or
animal feed supply. CFIA said it had launched investigations to identify any other animals
of risk, focusing on recently born offspring and on other cattle born on the same farm within
a year of both infected animals, several of which entered the United States.14
Government veterinary experts on both sides of the border agree that some additional
BSE discoveries in older U.S. and Canadian cows are “not unexpected,” particularly in light
of enhanced surveillance activities, and that Canada could have as many as 11 reported cases
and still satisfy the U.S. criteria for a “minimal risk” country.
Canadian Feed Ban. However, the relatively younger age of the most recent BSE
cow added a new dimension to the issue. Canadian officials have stated that the cow most
likely consumed BSE-contaminated feed sometime after its birth, indicating that farmers
likely were still using the last of such prohibited feeds in the months following the ban. This
time period was well past the 60-day grace period that farmers were granted to use up
existing feed stocks — and followed a much longer period prior to that when the rule was
being proposed and explained to the feed industry and to cattle producers.

In a February 2005 report, USDA concluded that the Canadian feed ban has been
effective. Among other things, USDA endorsed CFIA findings that compliance by renderers
and feed mills has exceeded 90% (with most unsatisfactory ratings due to “minor record-
keeping infractions”) and that compliance continues to improve over time. CFIA issued its
own findings on March 2, 2005, also reporting high adherence to the feed rule. It stated: “On
average, 95% of feed mills and 93% of renderers inspected over the past three years were
either fully compliant or reported only minor compliance issues.” Companies are moving
increasingly toward segregated plants or production lines that handle either prohibited or
non-prohibited materials but not both.15
Some critics remained skeptical of these findings, arguing among other things that the
reviews were inadequate. For example, they relied largely on reviewing paperwork to
ascertain compliance, and generally did not examine the ban’s implementation by Canada’s
246,000 livestock farms — including some 25,000 on-farm feed mills, these critics assert.
USDA Rulemaking to Readmit Canadian Beef and Cattle. 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. It began to ease that ban
on August 8, 2003, when USDA announced that it would 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
14 See [http://www.inspection.gc.ca/english/anima/heasan/disemala/bseesb/bseesbindexe.shtml].
15 See USDA’s Assessment of the Canadian Feed Ban, at [http://www.aphis.usda.gov/lpa/issues/
bse/CAN-FeedBanReview.pdf], and CFIA’s Feed Ban Review, at [http://www.inspection.gc.ca/
english/anima/feebet/rumin/revexa/revintroe.shtml].
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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 August 2003 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 was further expanding the list of allowed (so-called low risk)
products. A list published on August 15, 2003, included, in addition to the products
announced on August 8 (see above), 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 version of the list included beef lips, tongues, hearts and kidneys. The August 15 and
October 22 lists were posted on the APHIS website, but neither was accompanied by a
Federal Register issuance or public communication.
On April 19, 2004, USDA published on its website, again without further rulemaking
or public notice, 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 led by Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of
America (R-CALF USA), 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. Among
other issues, the judge cited concerns about whether USDA followed appropriate rulemaking
procedures.16 USDA subsequently reached an agreement with plaintiffs that it would not
allow beef and veal products beyond the types listed on August 15, 2003 (see above), until
issuance of the final rule that was first proposed on November 4, 2003. USDA Officials
stated further that then-Secretary Veneman had been unaware that APHIS had expanded the
list of eligible products after August 8, 2003.
The final version of the November 4, 2003, proposal was announced on December 29,
2004, several hours before Canada revealed its second possible BSE finding. The new rule
was published in the January 4, 2005, Federal Register, to take effect March 7, 2005.
Specifically, the rule creates a new category of “minimal risk” BSE regions — those in which
BSE-infected animals have been diagnosed, but where sufficient regulatory measures have
been in place to ensure that the introduction of BSE into the United States is unlikely. The
rule further classifies Canada in this category, the first such region to qualify, based on what
USDA declared was “a thorough risk analysis.” (In addition, a region with effective BSE
regulatory measures that has never detected the disease, but cannot be considered BSE-free,
can qualify as a “minimal risk.”) The rule makes the following products eligible for
importation from Canada:
! Cattle and other bovines for feeding and for immediate slaughter. All cattle
must be under 30 months of age and be slaughtered at less than 30 months.
All cattle must be moved in closed containers, be tagged on the ear to enable
16 Ranchers Cattlemen Action Legal Fund USA vs. USDA (CV-04-51-BLG-RFC).
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traceback to their birth herds, and be accompanied by health and other
information, among other requirements. Feeder cattle must be branded and
can only be moved to a single feedlot, and from that lot directly to slaughter.
! Sheep and goats (ovines and caprines) for feeding and immediate slaughter,
which must be under 12 months of age and slaughtered by 12 months.
Similar movement and identification rules apply to these animals.
! Most meat from bovines, ovines, caprines, and cervids (deer, elk, etc.). This
includes, for example, bone-in cuts and cuts from cattle over 30 months.
(On February 9, the Secretary of Agriculture announced that he would delay
the part of the rule allowing beef from over-30-month-old cattle.)
! Certain other products and byproducts including bovine livers and tongues,
gelatin, and tallow.
R-CALF USA again sued to block the rule. The same federal judge on March 2, 2005,
issued a preliminary injunction to halt implementation, and later set July 27, 2005, for a
hearing on whether a permanent injunction should be granted. The judge stated in part that
R-CALF had “demonstrated the numerous procedural and substantive shortcomings of the
USDA’s decision to allow importation of Canadian cattle and beef. The serious irreparable
harm that will occur when Canadian cattle and meat enter the U.S. and co-mingle with the
U.S. meat supply justifies issuance of a preliminary injunction ... pending a review on the
merits.”17 The Administration on March 17, 2005, appealed to the U.S. Court of Appeals for
the Ninth Circuit; a hearing on the appeal is scheduled for July 13, 2005.
Several agricultural leaders in Congress have expressed their support for the rule as
well. For example, the House Agriculture Committee Chairman stated: “The ramifications
of this judicial ruling are devastating for the U.S. livestock and beef industry.” He added that
“the status quo is causing adverse economic harm to our processing industry which has grave
long term implications for cattle producers. Moreover, the decision further undermines our
nation’s credibility as we seek to eliminate non-tariff trade barriers around the world.” At
its March 1, 2005 hearing, the panel heard testimony that in 2004 Canada increased its cattle
processing capacity by 22%, as an alternative to shipping them to the United States. This
puts many U.S. packers, particularly those who relied on Canadian cattle to supply their
plants, at a great disadvantage, it has been argued.
Others have defended USDA’s assertion that — because Canada has in place safeguards
that are at least equivalent to those of the United States, and because the North American
market has become an integrated one — the rulemaking is reasonable. Supporters believe
it is necessary if the United States wants to convince other countries that U.S. beef also is
safe. Several believe USDA should have gone further. For example, the American Meat
Institute (AMI), representing meat packers, had filed a federal lawsuit seeking a preliminary
injunction to block enforcement of the continuing ban on imports of Canadian cattle,
including those over 30 months old. AMI charged that USDA lacks any scientific basis for
continuing to ban such imports. A federal judge in early March 2005 denied the request.
Elsewhere, the Canadian Cattlemen’s Association and more than 20 other groups
announced on April 17, 2005, that they are asking the Canadian government to seek remedies
17 Ranchers Cattlemen Action Legal Fund USA vs. USDA (CV-05-06-BLG-RFC).
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for the cattle ban under either the World Trade Organization (WTO) or the North American
Free Trade Agreement (NAFTA), according to trade press reports. Canadian cattlemen also
reportedly filed several major class action lawsuits against the government and a feed
manufacturer over actions that resulted in the BSE contamination of feed there.
In a February 2005 audit, USDA’s OIG concluded that the department’s actions on the
border opening were sometimes arbitrary and undocumented; policy decisions were poorly
communicated to the public and between APHIS and FSIS; and controls over the regulatory
process were inadequate. USDA agreed with and promised to implement most of the
report’s findings.18
A number of lawmakers have called for a delay or rescission of the Canada rule, and
a vote to overturn the rule was successful in the Senate. On March 3, 2005, the Senate
approved a resolution of disapproval (S.J.Res. 4) by a vote of 52-46. A related resolution
(H.J.Res. 23) is pending in the House, but passage is considered less likely there. A final
measure would have to be signed by the President, who opposes it.
Other bills addressing the Canada rule include H.R. 187, to prohibit the rule “unless
United States access to major markets for United States exports of cattle and beef products
is equivalent or better than the access status accorded such exports as of January 1, 2003”;
and H.R. 384/S. 108, to prohibit the Canada rule unless mandatory retail country of origin
labeling (COOL) is implemented. The current statutorily set deadline for COOL for fresh
meats is September 30, 2006. A pending bill by the House Agriculture Committee chairman
(H.R. 2068) would make COOL voluntary for meats; the House-passed USDA appropriation
for FY2006 (H.R. 2744) would prohibit use of funds to implement COOL for meats. (See
CRS Report 97-508, Country-of-Origin Labeling for Foods). S. 294 would prohibit imports
(from a minimal risk region like Canada) of meat, meat byproducts and meat food products
from bovines over 30 months old unless the Secretary reports to Congress that the region “is
in full compliance with a ruminant feed ban and other [BSE] safeguards.”
18 USDA, OIG. Animal and Plant Health Inspection Service Oversight of the Importation of Beef
Products from Canada, on the web at [http://www.usda.gov/oig/webdocs/33601-01-HY.pdf].
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