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May 22, 2003

Expert: Canadian beef could be replaced in U.S. diets with little effect

WEST LAFAYETTE, Ind. – The beef the United States purchases from Canada could be replaced with imports from other countries if necessary, depending on the length of the ban on Canadian beef and dairy products, according to a Purdue University agricultural economist.

On Tuesday (5/20) the U.S. Department of Agriculture announced that shipments of Canadian beef and dairy products were banned in this country after a single case of bovine spongiform encephalopathy, or mad cow disease, was reported in Canada.

"Last year Canadian beef accounted for about 7 percent of U.S. beef supplies," said Philip Paarlberg, a professor of agricultural economics and world trade expert. "That drop in beef imports can be offset by beef from elsewhere."

If domestic beef production doesn't keep up with consumer demand, countries such as Australia or New Zealand could increase exports to the United States, he said.

Americans consume more than 26 billion pounds of hamburgers, steaks and other beef products annually. Imports account for about 3 billion of those pounds, and Canadian beef makes up about one-third of all beef imports.

While 83 percent of Canada's beef exports goes to the United States, our northern neighbor does export to other countries, with Korea being the next largest importer. Paarlberg said other countries have joined in the ban on Canadian beef, and U.S. producers may be able to increase exports to those countries.

"Countries like Japan purchase Canadian beef and would likely switch to U.S. beef imports," he said. "On the other hand, the Japanese went through their own BSE scare in recent years and beef consumption dropped dramatically there. Japan's beef consumption only recently came back up to where it was and may also be affected by this recent announcement."

The USDA is working with Canadian officials to investigate the mad cow disease case. Paarlberg said determining the origin of the animal and the extent of the problem in Canada will go a long way toward settling the uncertainty surrounding the situation.

"This really boils down to how long the ban on Canadian beef stays in place and consumer response," he said. "If beef exports from Canada resume soon, there will probably be little long-term effect. However, if the ban stays in place and consumers start to react negatively, then we have a whole new ball game."

Writer: Beth Forbes, (765) 494-2722; forbes@purdue.edu

Source: Philip Paarlberg, (765) 494-4251, paarlbep@purdue.edu

Ag Communications: (765) 494-2722; Beth Forbes, bforbes@aes.purdue.edu; http://www.agriculture.purdue.edu/AgComm/public/agnews/

Related Web site:
Purdue animal diseases Web site


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