OldDog/NewTricks
Well-known member
101 Livestock Auction Eyes European Markets
Jan 25, 2006
Aromas - As one of only five companies in the United States ready to receive federal certification allowing its beef to be shipped overseas, 101 Livestock Auction of Aromas stands to make a mighty profit from foreign markets devastated by mad cow disease - even though Japan has once again banned importation of the meat.
Jim Warren, President of 101 Livestock Auction, has his eye on European markets now because Japan halted American beef shipments last week after finding a bone in a shipment of beef.
Warren was excited about getting the certification to ship to Japan because the country had lifted a ban two months ago on American beef after 10 years of prohibition. The 101 Livestock Auction is one of only five companies in the U.S. that would be able to ship to Japan.
The product Japan found - bone-in veal from a plant in New York - is widely consumed by Americans and allowed under international trading rules, but Asian officials worry that bone presents a risk of mad cow disease. Restrictions against bone-in beef have remained in Asia because officials fear that marrow and other bone tissue might be dangerous.
"It's going to affect us, no doubt about it," Warren said. "But we're still going to be able to sell our product - the world market is good, so it won't be devastating."
Mad cow disease is the common term for bovine spongiform encephalopathy, or BSE. It is a degenerative nerve disease in cattle linked to a rare but fatal human disease. People have gotten it by eating meat or cattle products contaminated with mad cow disease.
Japan's import ban on beef comes at a bad time for Warren. The 101 Livestock Auction is expected next month to become the sole company west of the Rocky Mountains certified under the USDA's Quality System Assessment Program, which establishes a list of criteria cattle must meet in order to be shipped to Japan and other Pacific Rim nations.
"We have the safest and highest quality beef in the world," Warren said. "But (Japan) won't take it - it's frustrating."
While the Japanese markets are temporarily closed, Warren has his eye on European markets, which he believes will be every bit as lucrative.
"We're going to see the biggest demand for QSA cattle that we've ever seen in history," Warren said. "Europe's beef supply has been devastated."
Over the last 10 years, the European Union's beef production has significantly declined as a result of mad cow disease and hoof-and-mouth disease, said Ben Higgins, executive director the California Cattlemen's Association.
"England alone has had 183,000 cases of (mad cow disease)," Higgins said. "The EU has become one of the largest importers of beef and is creating new opportunities for U.S. beef producers."
By contrast, there have been two cases of mad cow in the United States and 21 cases in Japan.
Higher demand could mean higher market prices for beef, Warren said. But just how much prices will change remains to be seen, he said.
QSA certification isn't easy to get and it has cost the 101 Livestock Auction thousands of dollars. One QSA requirement is source verification. Animals must be individually identified, and records have to be kept on the animal's age, vaccination program and whether or not it has received implants of growth stimulating hormones. Based on this data, the animal is given a rating and its eligibility for shipment overseas is determined before the animal is sold.
The idea behind source verification is that it promotes personal accountability, and should certain animals suffer an outbreak of disease, it can easily be traced to its source and dealt with. While the system isn't cheap - 101 Livestock Auction spent $50,000 in computer equipment over the past two years alone - Warren believes that the investment will pay off in the near future.
The source identification technology adds between $5 and $12 to the price of the cattle, and when the company is granted QSA certification, Warren expects to see an additional increase of $5 or $7.
The Associated Press contributed to this report.
Jan 25, 2006
Aromas - As one of only five companies in the United States ready to receive federal certification allowing its beef to be shipped overseas, 101 Livestock Auction of Aromas stands to make a mighty profit from foreign markets devastated by mad cow disease - even though Japan has once again banned importation of the meat.
Jim Warren, President of 101 Livestock Auction, has his eye on European markets now because Japan halted American beef shipments last week after finding a bone in a shipment of beef.
Warren was excited about getting the certification to ship to Japan because the country had lifted a ban two months ago on American beef after 10 years of prohibition. The 101 Livestock Auction is one of only five companies in the U.S. that would be able to ship to Japan.
The product Japan found - bone-in veal from a plant in New York - is widely consumed by Americans and allowed under international trading rules, but Asian officials worry that bone presents a risk of mad cow disease. Restrictions against bone-in beef have remained in Asia because officials fear that marrow and other bone tissue might be dangerous.
"It's going to affect us, no doubt about it," Warren said. "But we're still going to be able to sell our product - the world market is good, so it won't be devastating."
Mad cow disease is the common term for bovine spongiform encephalopathy, or BSE. It is a degenerative nerve disease in cattle linked to a rare but fatal human disease. People have gotten it by eating meat or cattle products contaminated with mad cow disease.
Japan's import ban on beef comes at a bad time for Warren. The 101 Livestock Auction is expected next month to become the sole company west of the Rocky Mountains certified under the USDA's Quality System Assessment Program, which establishes a list of criteria cattle must meet in order to be shipped to Japan and other Pacific Rim nations.
"We have the safest and highest quality beef in the world," Warren said. "But (Japan) won't take it - it's frustrating."
While the Japanese markets are temporarily closed, Warren has his eye on European markets, which he believes will be every bit as lucrative.
"We're going to see the biggest demand for QSA cattle that we've ever seen in history," Warren said. "Europe's beef supply has been devastated."
Over the last 10 years, the European Union's beef production has significantly declined as a result of mad cow disease and hoof-and-mouth disease, said Ben Higgins, executive director the California Cattlemen's Association.
"England alone has had 183,000 cases of (mad cow disease)," Higgins said. "The EU has become one of the largest importers of beef and is creating new opportunities for U.S. beef producers."
By contrast, there have been two cases of mad cow in the United States and 21 cases in Japan.
Higher demand could mean higher market prices for beef, Warren said. But just how much prices will change remains to be seen, he said.
QSA certification isn't easy to get and it has cost the 101 Livestock Auction thousands of dollars. One QSA requirement is source verification. Animals must be individually identified, and records have to be kept on the animal's age, vaccination program and whether or not it has received implants of growth stimulating hormones. Based on this data, the animal is given a rating and its eligibility for shipment overseas is determined before the animal is sold.
The idea behind source verification is that it promotes personal accountability, and should certain animals suffer an outbreak of disease, it can easily be traced to its source and dealt with. While the system isn't cheap - 101 Livestock Auction spent $50,000 in computer equipment over the past two years alone - Warren believes that the investment will pay off in the near future.
The source identification technology adds between $5 and $12 to the price of the cattle, and when the company is granted QSA certification, Warren expects to see an additional increase of $5 or $7.
The Associated Press contributed to this report.