Disease May Spoil Dairy, Meat Profits

On a typical day, beef broker Rod Bolcao of Chino collects as much as 60 cents a pound for the 300 to 400 dairy cows he moves to slaughterhouses around the West. Wednesday was anything but typical.

The best deal he could wrangle was for 30 cents, and he was stuck holding more than 60 head of cattle. Suddenly, Bolcao lamented, “there is no market.”

The discovery Tuesday of a single case of “mad cow” disease in Washington state has upended Bolcao’s business -- along with much of California’s beef and dairy industries. Eating beef contaminated with “mad cow” has been linked to an always-fatal human illness called variant Creutzfeldt-Jakob disease.

With investigators still trying to piece together just what happened at a farm in Mabton, Wash., meatpackers in California said they were wary of buying much in the way of supplies, and middlemen such as Bolcao were holding off cutting deals with cattle farmers because they didn’t want to end up stuck with a bunch of beef they couldn’t move.

“People,” Bolcao said, “are just shutting their doors for now.”

Cows are kings in the Golden State, where some 5.2 million of them roam (or not, given the close quarters at many dairies).

California’s 1.7 million milk cows supply some 2,100 dairies that sell more than $4 billion in products annually, according to the state Milk Advisory Board. And dairymen earn millions more when they sell their spent milk cows for meat. About 30% of the nearly 400,000 dairy cows in Southern California are culled annually to be turned into steaks.

Ranchers in the state sell about $3.5 billion of beef cattle a year and tend about 1 million head, according to the California Cattlemen’s Assn. There are an additional 2.5 million cattle getting fattened at feed lots or maturing to enter service at dairy farms, state agricultural officials said.

Business had been good for beef and dairy farmers in 2003, with beef prices up by as much as 40% over the year before. The upsurge was driven by strong demand from Americans hankering for high-protein diets.

Ironically, prices also were pushed higher by the detection of “mad cow” disease in a single Canadian bovine in May. That sparked a nearly global ban on Canadian beef, fueling U.S. exports.

But until a fuller picture emerges of how the Washington cow developed the disease -- and whether other animals have been infected -- the industry could face considerable turmoil.

“We have real reasons to be concerned,” said Darrel Sweet, a Livermore rancher and president of the California Cattlemen’s Assn. “Beef prices throughout the United States have been at record highs. If there is all of a sudden a negative perception surrounding beef and beef products, demand and prices could fall.”

None of the California trade groups would estimate how much financial damage has been caused thus far. But a 1,500-pound dairy cow bound for slaughter was fetching about $450 as of Wednesday, compared with as much as $900 the day before.

And Japan and South Korea -- the California beef industry’s two largest export customers -- have banned imports of American beef. California sent about $170 million in beef abroad last year, a fraction of total U.S. beef exports of $3.2 billion.

As of Wednesday, there was no evidence in California of “mad cow” disease, whose technical name is bovine spongiform encephalopathy, and officials said there was very little chance it would show up here.

The disease can spread among animals when bone meal from cows and sheep is used to feed cattle. But that practice was banned by the U.S. in 1997. And most of California’s beef cattle graze on grass anyway.

As for milk and dairy products, food experts said there was little danger of “mad cow” contamination.

“I have never heard of any transfer to milk,” said Jerry Bruhn, a food science professor at UC Davis. “The cow acts as an exceptionally good biological filter for all sorts of toxic agents.”

Nevertheless, dairy representatives expressed concerns Wednesday about the public’s response.

“This one incident will rock the dairy industry in California,” said Robert Feenstra, executive director of the Milk Producers Council in Ontario. “We are fearful that there could be an overreaction by consumers.”

John Orradre, a rancher near Paso Robles, agreed. He said the detection of “mad cow” disease in the U.S. couldn’t have come at a worse time.

After two difficult years, cattle ranchers were using the boom in beef prices to pay off farm debts and “put a few more Christmas presents under the tree.”

To keep the run going, he said, “we really need to have consumer confidence.”

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Times staff writer Abigail Goldman contributed to this report.