Just when you thought it was safe to eat a burger again . . .
Like an unwanted sequel to a bad horror movie, the remote but still discomforting threat of mad cow disease is back.
After Canada on Tuesday reported its first confirmed case in a decade of the brain-wasting mad cow disease, beef-dependent restaurant chains and food processors watched their company stock drop from new investor fears.
Shares of such fast-food burger giants as McDonald's - one of the world's biggest buyers and sellers of beef - and Wendy's fell nearly 7 percent Tuesday. Beef processor Tyson Foods fell nearly 5 percent, while shares of Tampa's Outback Steakhouse chain slipped just over 3 percent.
Blame it all on one 8-year-old cow in Fairview, Alberta, Canada's top cattle-producing province and a major beef exporter to the United States. The animal tested positive for mad cow disease, formally known as bovine spongiform encephalopathy. The cow was tested after it was slaughtered last winter, though Canadian officials only confirmed the results this week.
The animal, initially diagnosed with pneumonia, did not enter the food chain. Its 150-head herd in northern Alberta was quarantined and is expected to be slaughtered.
That's all for the good. But the truth is, it's way too early to relax.
The United States, which imports a substantial and rising volume of Canadian cattle, immediately placed a temporary ban on Canadian beef and other meat products.
Two years ago, the United States was hit by a mad cow scare after the disease was discovered in British cattle. The epidemic forced the slaughter of tens of thousands of cattle in Britain and throughout Europe left more than 100 people dead after they apparently ate infected beef and contracted a human form of the brain-wasting disease.
The mad cow scare spread to Japan. But U.S. cattle herds were never affected, according to federal agriculture officials.
One big problem in managing mad cow disease is we don't know enough about how it infects humans. For example, scientists this week said they estimate the time between infection and the onset of symptoms is 121/2 years. Such an extended period makes it very difficult to tie a specific source of the disease - infected cattle and their byproducts - to its human victims. People exposed to mad cow disease can develop what is called "new variant" Creutzfeldt-Jakob disease.
How did this country miss the mad cow bullet so far?
One theory is that Europe feeds its beef cattle a diet of livestock parts that people won't eat. While that boosts the protein content of cattle feed, it also increases the chance that animals will eat feed tainted with mad cow disease. In comparison, U.S. ranchers tend to feed their cattle more grains and soybean products for protein. The federal government banned in 1997 the feeding of leftover animal parts to cattle, but there have been violations reported since then.
On the other hand, U.S. deer populations in the northern Midwest have been found for years to be sufferering from a similar brain-wasting malady called chronic wasting disease.
That's one of several reasons investors in beef-dependent U.S. companies are nervous. It does not take much these days to inflict damage on the volatile U.S. stock market. Especially one that already was responding to the nation's raising the terror-alert status one notch to orange, or worrying over a different and disturbing disease, SARS.
Consider Outback's response.
After Tuesday's reports of finding a case of mad cow disease in Canada, the Tampa restaurant chain issued a brief statement. "In response to inquiries from analysts and reporters," Outback said its "restaurants serve only U.S.D.A. top choice or prime U.S. Midwestern grain-fed beef." Outback also said it requires all of its beef suppliers to confirm in writing that the cattle used for its restaurants have been raised and fed in compliance with U.S. government regulations designed to prevent the disease in this country.
Later Tuesday afternoon, Outback issued a clarification. The company's statement applied only to its U.S. restaurants. But Outback has dozens of restaurants overseas, including 19 in Canada.
McDonald's, with its own half-assuring statement, said its Canadian operations "only purchases beef from facilities federally inspected and approved by the Canadian Food Inspection Agency." The burger chain said its U.S. business does not import "any raw beef or hamburger patties" from Canada for McDonald's use in the United States.
Well before the mad cow case was disclosed in Canada, U.S. companies remained wary that the brain-wasting disease could crop up and affect their business at any time.
Altria, the parent of Kraft foods, recently warned in a regulatory filing that "recent publicity" about mad cow disease in Europe, "whether or not valid, may discourage consumers from buying Kraft's products or cause production and delivery disruptions."
Even Wilsons, the leather goods maker, is nervous. "Certain countries supplying the hides used to make leather products have experienced outbreaks of certain highly publicized diseases, namely mad-cow disease and hoof-and-mouth disease," the company said this month. "There can be no assurance that demand for our leather products will not decline as a result of the publicity regarding these diseases or new scientific findings with respect to such diseases."
For at least a few meat companies, there's a bit of a bright side.
Smithfield Foods, a major U.S. pork producer with beef operations, does not buy cattle from Canada. But it might benefit from an increase in pork sales -- if uneasy consumers switch from beef to other meats.
A single reported case of mad cow disease in Canada pressured companies that depend on beef Tuesday, sending stocks lower as investors grew nervous about the extent of the contamination and its impact on the beef industry.
