Effects of North American BSE Events on U.S. Cattle Prices

In May 2003, a beef cow in the Province of Alberta tested positive for bovine spongiform encephalopathy (BSE or mad cow disease). In December of 2003, a dairy cow in the state of Washington also tested positive for BSE. These discoveries disrupted cattle and beef trade in North America and major export markets. We examine the effects of these two North American BSE events on U.S. fed and feeder cattle prices. The results indicate that the demand for U.S. beef was affected to a much greater degree by the reactions of foreign governments to the BSE announcements than by the reactions of U.S. households.