Order Code IB10127
CRS Issue Brief for Congress
Received through the CRS Web
Mad Cow Disease:
Agricultural Issues for Congress
Updated June 28, 2005
Geoffrey S. Becker
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

---

CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Introduction
First U.S. Case (December 2003)
Second U.S. Case (November 2004)
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

---

IB10127
06-28-05
Mad Cow Disease: Agricultural Issues for Congress
SUMMARY
Most countries banned U.S. beef after the
additional Canadian ruminant products to
December 2003 report of BSE (bovine spongi-
enter. However, a federal judge on March 2,
form encephalopathy, or mad cow disease) in
2005, issued a preliminary injunction blocking
a Canadian-born cow found here. Several of
the rule; USDA is appealing the decision.
these markets have partially reopened. How-
ever, Japan and Korea, which together had
In Congress, the Senate on March 3,
purchased 61% (by value) of all U.S. beef
2005, passed a joint resolution (S.J.Res. 4) to
exports in 2003, remain closed. Further prog-
overturn the Canada rule. However, a resolu-
ress is clouded by reports of BSE in the first
tion must pass the House (where similar
U.S.-born cow, first tested in November 2004
H.J.Res. 23 was introduced) and be signed by
but not confirmed until June 2005.
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, S. 294, and S. 1300.
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.
stepped up efforts to improve BSE safeguards,
The first three North American cases were in
including banning downer (nonambulatory)
cattle born before both countries banned, in
cattle from human food; keeping from the
1997, the practice of feeding most ruminant
food supply additional higher-risk animal
material back to ruminants, including cattle.
parts; working on a national animal identifica-
The fourth (third Canadian) case was in a cow
tion system for disease purposes; and increas-
born in March 1998. In all four cases, BSE-
ing funds for BSE-related activities.
contaminated feed is considered the most
likely cause of infection.
The Food and Drug Administration
(FDA) is still weighing possible rules to tight-
USDA said that total U.S. beef exports in
en its feed controls. Further action is pending.
2004 reached only 17% of their 2003 level of
about 2.5 billion pounds. However, strong
From June 2004 to June 24, 2005, some
domestic demand and tight cattle supplies
395,000 higher-risk U.S. cattle had been
have kept U.S. cattle prices relatively high.
tested for BSE, all but one negative, under an
expanded surveillance program. One sample
Lower-risk Canadian beef has been
that had tested negative in November 2004
permitted into the United States since August
has since tested positive using different testing
2003. As the two new BSE cases were emerg-
methods. This event has renewed concerns
ing, USDA published a final rule, on January
about USDA testing.
4, 2005, to also allow younger live cattle and
Congressional Research Service ˜ The Library of Congress

---

IB10127
06-28-05
MOST RECENT DEVELOPMENTS
On June 24, 2005, the Secretary of Agriculture said that more testing had confirmed the
presence of BSE in a brain sample first taken from a U.S. beef cow in November 2004. (The
Secretary had first announced this possibility on June 10.) This is the first confirmed case
of BSE in a U.S.-born animal. The other U.S. case (December 2003) was in a cow imported
into the United States from Canada.
Screening tests had first been conducted on this U.S.-born cow in November 2004, and
at that time were reported as “inconclusive” (i.e., possibly positive) for BSE. USDA then
determined late last year that the animal was negative for BSE, based on its confirmatory
testing using the so-called “IHC” or immunohistochemistry test method. After prodding by
the USDA Office of Inspector General, department scientists earlier 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. Brain tissue was then taken for final
confirmatory testing at the BSE World Reference Laboratory in Weybridge, England. The
Secretary’s June 24 announcement followed the results of the Weybridge testing.
Most details about the animal and its herd of origin were not immediately forthcoming;
USDA said an epidemiological investigation is again under way to determine the animal’s
origin, movements, and herd mates.
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 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 61% of all U.S. beef exports in 2003, remain closed.
BACKGROUND AND ANALYSIS
Introduction1
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.) Reported cases of BSE have
declined steeply since their peak in 1992 in Great Britain.
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
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].
CRS-1

---

IB10127
06-28-05
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.
First 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).
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. 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.
Second U.S. Case (November 2004)
On June 24, 2005, the Secretary of Agriculture said tests had confirmed the first case
of BSE in a U.S.-born animal. Screening tests had first been conducted on this cow in
November 2004, and at that time were reported as “inconclusive” (i.e., possibly positive) for
BSE. Later in November, USDA announced that the animal was negative for BSE; officials
based this announcement on a follow-up analysis of tissue samples using the so-called “IHC”
or immunohistochemistry test method. In early June 2005, prodded by the USDA Office of
Inspector General, department scientists 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. Brain tissue was then taken for final
confirmatory testing at the BSE World Reference Laboratory in Weybridge, England. The
CRS-2

---

IB10127
06-28-05
Secretary’s June 24 announcement was based on the results of the Weybridge testing, plus
follow-up testing by USDA’s Ames laboratory.
Most details about the animal and its herd of origin were not immediately forthcoming;
USDA said an epidemiological investigation is again under way to determine the animal’s
origin, movements, and herd mates. Department officials have revealed that the cow in
question was an older nonambulatory animal found at a plant that renders dead, dying,
diseased, or disabled animals for non-human uses such as pet food, but that this animal’s
remains never entered the food or feed chain and were incinerated. (Last November, the
trade publication Cattle Buyers Weekly had reported that the animal was a 12-year-old beef
cow from Texas.) USDA officials continue to reassure the public that a “sound system of
interlocking safeguards” are protecting human and animal health.
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
CRS-3

---

IB10127
06-28-05
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
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.”
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 to enable suspect
animals to be traced more quickly; and that USDA should expand testing to determine the
prevalence of any BSE in the United States. The IRT 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.
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
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
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,
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].
CRS-4

---

IB10127
06-28-05
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 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 early summer 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 24,
2005, nearly 395,000 cattle had been tested, all but one negative for BSE.6
Testing Issues. BSE testing had been 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.
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/].
CRS-5

---

IB10127
06-28-05
USDA officials had 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 that later tested negative when
USDA applied its so-called “gold standard,” or IHC test method. After its IHC test came
back negative for BSE, USDA did not run the other OIE-recognized confirmatory test, the
Western blot. (It did run the Western blot test to confirm the BSE-positive result in
December 2003, however.)
OIG wanted the tissue retested because of its concerns about the original testing
procedures (for example, the sample should not have been frozen; and there were paperwork
reporting problems). This OIG-requested retesting in early June 2005 was done by USDA
scientists — reportedly without the direct knowledge of the Secretary of Agriculture — using
the Western blot. When this test showed the presence of BSE, USDA took samples from the
animal to the World Reference Laboratory in England.
Weybridge conducted a series of analyses on the samples, all except one of which
detected BSE, including another IHC test. The Secretary of Agriculture explained that the
positive IHC test by Weybridge used a different procedure than the one used in November
2004 by USDA at Ames. A Weybridge scientist, Dr. Danny Matthews, confirmed that “there
are no two laboratories around the world that are using identical IHC methods and not a
single test that you can take off the shelf,” so that tests may not perform equally.7
USDA also revealed on June 24 that a USDA laboratory had actually found possible
BSE in the animal when it applied an “experimental” version of the IHC test. But they
asserted that the laboratory had not reported this result because the test was not a proven one.
This information, and the positive BSE confirmation by Weybridge, provoked strong
criticism by consumer groups and several Members of Congress. They have expressed
7 Transcript of media conference, June 24, 2005, at [http://www.usda.gov/wps/portal/usdahome].
For an explanation of the two OIE-approved tests, see the June 2005 APHIS factsheet at [http://
www.aphis.usda.gov/lpa/pubs/fsheet_faq_notice/faq_BSE_confirmtests.pdf].
CRS-6

---

IB10127
06-28-05
renewed skepticism about the adequacy of USDA’s testing methods and procedures; and
about department officials’ willingness to communicate all relevant information about BSE
in the United States.
Secretary Johanns, who replaced Ann Veneman as Secretary earlier in 2005, defended
USDA’s surveillance program, stating: “Science is ever evolving. It is not static. And as we
learn more we apply the knowledge.” USDA is carefully reviewing its testing to ensure that
it is “in line with the very latest science,” he said, adding, “perhaps the most important thing
to remember is that we’ve only needed this test three times since our enhanced surveillance
began. Three times out of 388,309 tests, three times that we have had inconclusive screening
results. And I’m told that the reliability of the screening test is very sound.”8
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, 1997.9 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 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.
8 Transcript of media conference, June 24, 2005.
9 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.
CRS-7

---

IB10127
06-28-05
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;
! 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 the feed rule changes, which were
still pending as of June 27, 2005. 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.)
CRS-8

---

IB10127
06-28-05
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.)
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. Secretary Veneman 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 August 5, 2004, USDA announced it was signing
cooperative agreements with 29 states and tribal agencies to receive $11.64 million 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. But a national system may
not be fully in place and/or mandatory until 2009. Some argue that USDA, which has
embarked on an all-farm species approach, is progressing too slowly; the National
Cattlemen’s Beef Association (NCBA), for example, is now proposing to establish a
privately operated system for cattle that could be 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.
CRS-9

---

IB10127
06-28-05
In Congress, several Members have complained that lack of a nationwide system has
hindered the investigations into the North American BSE cases, including the latest one.
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 Commodity Credit Corporation
(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 $3.1 billion in 2003 (or about 10% of farm value for cattle/calves).
Four countries bought approximately 90% of these exports: Japan (37%), South Korea
(24%), Mexico (20%), and Canada (10%).
Most importing countries halted imports of U.S. beef and cattle soon after the December
2003 U.S. BSE announcement. Mexico and Canada are now accepting some U.S. beef and
veal. By early 2005, officials had reported progress toward regaining other markets, although
the latest U.S. BSE announcement could complicate efforts to normalize trade. 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. However, 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. 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 June 2005) was $85-
$88. Average fed steer prices were $84.69 in 2003 and $67.04 in 2002.

CRS-10

---

IB10127
06-28-05
NCBA recently placed cattle producers’ export-related 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.10 The U.S. share of the world market for beef/veal exports
declined from 18% in 2003, to 3%, according to USDA data.
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
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.11
Japan Trade Issues
Japan and Korea are considered vital to the long-term export picture. 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 would
certify that only beef from cattle of 20 months or younger are shipped. (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.) The United States also agreed to, among other things, an
expanded SRM definition, to cover cattle of all ages. 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. 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. Japan has not provided a date
certain for completing these activities. Most observers do not expect any U.S. beef to enter
Japan before later in 2005 at the earliest. 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.
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
10 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.
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/].
CRS-11

---

IB10127
06-28-05
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 1993.12
January 2005 Announcements. Canada confirmed a second BSE case in on
January 2, 2004. The CFIA announced that the animal was an Alberta dairy cow born in
1996. On January 11, 2004, CFIA announced its third confirmed case, this in an Alberta beef
cow born in March 1998 — some seven months after its feed ban was published. CFIA
stated that no part of either animal entered the human food or animal feed supply.13
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 one Canadian 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
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. CFIA issued its own findings on
March 2, 2005, also reporting high adherence to the feed rule.14
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
12 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.
13 See [http://www.inspection.gc.ca/english/anima/heasan/disemala/bseesb/bseesbindexe.shtml].
14 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].
CRS-12

---

IB10127
06-28-05
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
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.15 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
15 Ranchers Cattlemen Action Legal Fund USA vs. USDA (CV-04-51-BLG-RFC).
CRS-13

---

IB10127
06-28-05
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
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.”16 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
16 Ranchers Cattlemen Action Legal Fund USA vs. USDA (CV-05-06-BLG-RFC).
CRS-14

---

IB10127
06-28-05
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.
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.17
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) was offered in the House, where passage was not considered likely. 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. A
Senate bill (S. 1300) would also make COOL voluntary. (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.”
17 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].
CRS-15

---