The benefits of the beef panic.

Making government work better.
Jan. 5 2004 12:10 PM

Mad Cows Come Home

Why the disease scare may be great for the U.S. food industry and consumers.

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The USDA will remain a public agency. As Eric Schlosser, author of Fast Food Nation, complained in a Jan. 2 op-ed in the New York Times, the USDA is hardly a model of an independent oversight body. But as recently as this past summer, the Bush administration was talking about privatizing large parts of the USDA's operations, as well as setting up a system in which meat-packing plants would paythe USDA to inspect them. Both ideas would surely only further erode the USDA's already too-lax supervision of the beef industry. Both proposals, fortunately, will be dead in the water for years.

Beef prices will stabilize. U.S. cattle ranchers were having their best year in a decade in 2003. Prices were up, supplies were tight (in part due to restrictions on Canadian imports), and consumers enamored with the Atkins diet were scarfing down T-bones. The week after BSE was found in the United States, beef prices plummeted. But there already are signs they are recovering. Buyers at a late-December cattle auction in Oregon, for instance, found that the "bargains" they sought weren't there: Cattle were selling close to their pre-mad-cow levels. It seems reasonable to assume that consumers will enjoy lower beef prices for much of 2004. But they won't be so low as to cripple cattle growers.

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Past improvements in food safety usually have followed a catastrophe, such as the 1993 e. coli epidemic that killed three children and sickened hundreds more after they ate tainted beef in hamburgers. In the wake of that tragedy, hamburger chains improved cooking techniques and hamburger producers faced greater inspection scrutiny. In the case of mad cow, it may well be that consumers will see the benefits of tougher standards without the pain of deaths or illnesses. So here's to a rare chunk of tenderloin, which I plan to have for dinner tonight.

Douglas Gantenbein is the Seattle correspondent for the Economist.

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