040108 “Mad Cow” Hits Truckers & Meat Processors

San Jose Mercury News, CA - Pancost Trucking had been profitably hauling about eight containers full of beef each week from Colorado to West Coast ports, but that all changed when “mad cow” disease was discovered in Washington state.

The trucker's two biggest customers have all but halted exports now that dozens of countries are banning American beef, costing the mom-and-pop company thousands of dollars in lost shipments and forcing owner Gerry Schaefer to find other work for his 20 drivers.

“We've been having to run over to Nebraska to get potatoes,” Schaefer said. “And we're hauling more pork out of Kansas.”

Though 90% of U.S. beef is sold at home, the overnight collapse of the export business has hit the shipping and trucking industry hard.

Experts said it is too early to determine the financial impact, but some negative effects can already be seen: Cattle trade between barns and feedlots has slowed, the value of slaughter-ready animals has declined and some meat processors have scaled back production enough to send workers home.

Moreover, some $200 million worth of meat remains in limbo, either at sea, at port or in refrigerated facilities here and abroad, industry officials say.

In the past week, SCS Refrigerated Services of Portland, Ore., received a surge of inquiries from meat producers and shippers looking to store more than 10 million pounds of meat.

“It's what we call opportunity business,” said President and Chief Executive Hugh Carr. “But it's not the kind of opportunity business we welcome because it's a terribly unfortunate situation.”

More than 30 countries banned American beef after a cow slaughtered Dec. 9 in Washington was confirmed last week as the first case of mad-cow disease in the United States. Mad-cow disease is a concern because humans who eat brain or spinal matter from an infected cow can develop a potentially fatal brain-wasting illness.

Despite assurances by U.S. officials that the nation's beef is safe, the fate of nearly 2,000 containers of beef and beef products that were exported -- before the Dec. 23 warning about a suspected case of the disease -- is unclear.

Unless the trade bans are lifted or shipments can be redirected to other markets, U.S. Meat Export Federation spokeswoman Lynn Heinze said the meat could very well be sent back to where it came from -- the least preferable option.

Fremont Beef, an eastern Nebraska processor dependent on the Japanese market, sent home 49 of its 131 employees early this week, said Les Leech, chief operating officer. Leech said the company is scrambling to find alternative customers for its products.

With fewer meat-packed containers headed to the West Coast, many trucking companies are also losing valuable deliveries of wine, vegetables, fish and other products they would normally haul east on their return trips.

CR England, a trucking company in Salt Lake City, is “at a standstill just like everybody else” as far as exports go, said Sean Snow, a vice president. If the bans persist, the company stands to lose as much as $10 million a year.

But the company might actually be able to offset that somewhat by picking up business from vineyards, seafood companies and farmers who are finding a diminishing number of shippers.

“It's possible that we may be better off for that,” Snow said. “But, I'd hate to think we're benefiting from someone else's demise.”

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