Mad cow hits state economy

Kansas beef industry bemoans reversal of fortune

? What’s next, locusts?

The Kansas economy has been hit hard the past few years by the national economic downturn, drought and the 9-11 terrorist attacks that crippled the aircraft industry in Wichita, the state’s largest city.

But recently, a change of fortune seemed to be taking hold, at least in feedlots across the state, as cattle prices started to climb like never before.

Then, wham! Mad cow.

Now Kansas — the No. 2 cattle producing state in the country — is reeling from another body blow to the state economy.

“For a few months, we were enjoying the best times in the cattle industry in 30 years,” said Kansas State University livestock economist Rodney Jones. “It turned back around in one news story.”

That news story was about the sick Holstein slaughtered Dec. 9 in Washington state. The cow was later found to have mad cow disease, officially known as bovine spongiform encephalopathy, or BSE.

Since the discovery, more than two dozen countries have blocked U.S. beef imports. The list is topped by Japan, the leading buyer of U.S. beef.

The fallout has hit Kansas hard, sending cattle prices from a high of $92 per hundredweight to about $75 per hundredweight.

Joe Linot, executive director of the Kansas Beef Council, attributed the drop in prices to the “export arena.”

“Since they have said they are not going to buy our product for a while, that has taken some of the price out,” he said.

And Jones said that price decline would have a negative effect up and down the cattle industry — and would reverberate through the state economy.

“When you take that kind of revenue out of the cattle sector, it will impact tax revenue and the state budget,” he said. “It’s just a domino effect.”

Cash receipts in 2002 for cattle in Kansas totaled more than $4 billion. Twenty-three percent of the cattle that wind up on Americans’ dinner plates are fed in Kansas.

State officials have not yet estimated the loss of revenue and income from the mad cow incident, but Gov. Kathleen Sebelius and other state officials talked during the holiday via conference calls to develop a plan to assure the public that eating beef is safe.

“She is concerned about anything that could affect revenue for Kansas farmers and the state. If the incorrect perception that our food supply is in danger takes over, we will have serious problems,” Sebelius’ spokeswoman Nicole Corcoran said.

“Governor Sebelius is working on a plan to address public perception of BSE,” Corcoran said, adding that plan would be released today or tomorrow.

But Jones said the mad cow incident would probably ruin some producers who were treading water financially.

“It’s definitely going to inflict some pain,” he said.

And how long the shock to the cattle industry lasts will depend on whether the disease is limited to the one cow.

“If we find more of it, the effects will be much more dramatic and long-lasting,” he said.