- Hello Jeff - This comes as no surprise.
- The followng article simply backs up
the general concensus of a good number of callers to a local morning radio
talk program. Many people phoned in saying the latest mad cow case in Alabama
would NOT change their beef eating habits.
- The handwriting has been on the board
for many a year now and still people refuse to believe those of us who
bring the message of danger in each bite. Patricia Doyle
- US Consumers Unfazed By Newest
- By William Spain
- CHICAGO (MarketWatch) -- The creeping spread of avian flu and the discovery
of a third case of so-called mad-cow disease in the United States apparently
have yet to dampen the American appetite for beef and chicken. However,
elsewhere on the world, the appearance of the maladies has led to sharp
declines in demand for the meats, as evidenced both by the huge drop in
beef sales following a mad-cow outbreak in Europe in the 1990s and the
recent plunge in poultry sales in Asia, where bird flu has hit hardest.
- The latest case of bovine spongiform
encephalopathy helped beat down shares of beef processor Tyson Foods (TSN
: Tyson Foods Incorporated Although the stock recovered a bit on Tuesday,
Wall Street seems to be bit more twitchy about the brain-wasting malady
than the public at large. U.S. consumers seem to be taking at face value
repeated declarations by everyone from farm state senators to regulators
to trade groups that America's beef is still safe to eat.
- "The good news is that mad cow hasn't
had any significant impact" on domestic beef sales, said Ron Paul,
president of Technomic, a food-industry consultancy. "But our friends
in poultry have seen some signs of concern about avian flu."
- Paul pointed out that during the European
mad-cow outbreak, dozens of people died from its gruesome human variant,
known as Creutzfeldt-Jakob disease -- generating enormous amounts of publicity.
- "It is a pretty horrible disease,"
he said, with symptoms that include dementia, blindness, muscle spasms
and paralysis. "That had a major impact." But it was only temporary,
he added: "As far as I know, it is pretty much back to normal [in
- For Farah Aslam, an analyst with Stephens,
Inc., "the USDA's confirmation of a new case of [mad cow] in the United
States highlights the fact that Tyson's two largest protein segments, beef
and poultry, are suffering from disease issues."
- The problems are "pressuring earnings
and could cause the company to miss our estimates, let alone consensus
expectations," she wrote in a note to investors. "We are very
cautious on the protein sector and believe that it is still too early in
the cycle to buy TSN shares."
- Aslam also said that "our larger
concern has to do with Tyson's profitability in poultry, which is being
impacted by a drop in international demand due to avian influenza."
- At Prudential, "we are more worried
about deteriorating chicken fundamentals than we are about the latest mad-cow
discovery," wrote analyst John McMillin on Tuesday.
- The latter is "obviously not good
news," but the old age of the animal at issue may limit repercussions
from Japan, Korea and other export markets. According to regulators, the
cow looks to have been born before 1997, when a ban on "ruminant to
ruminant" feeding -- the practice of grinding up cattle and sheep
and feeding them to each other -- went into effect.
- "Avian influenza issues are complicated,
to say the least, and may take as long as two years to fully play out,
but if AI hits the United States next year, it can't be good for Tyson,"
- On the plus side, the mad-cow scare could
even be good for some beef-heavy equities, according to Morgan Stanley's
Mark Wiltamuth "As U.S. consumer demand for beef has not been dampened
by prior mad-cow cases, we do not expect beef demand and restaurant sales
to be affected by this finding," he wrote "However, there is
some risk that this will prompt further foot-dragging by Japan and other
nations that are considering reopening their borders to U.S. beef (which
would support our thesis for falling beef prices over the next few years)."
- That could boost the bottom lines of
beef-focused restaurants including McDonald's Corp. making them more attractive
investments, particularly if they trade down on the news.
- Patricia A. Doyle, DVM, PhD Bus Admin,
Tropical Agricultural Economics Univ of West Indies
- Please visit my "Emerging Diseases"
message board at:
- Also my new website: http://drpdoyle.tripod.com/
- Zhan le Devlesa tai sastimasa
- Go with God and in Good Health