Market analysts predict BSE will cost U.S. $5.5bn

January 26, 2004, Market analysts are predicting a 10 percent drop in the farm income for 2004 due to the recent discovery of bovine spongiform encephalopathy (BSE) in Washington State.

Global Insight, using estimates from its agriculture group, said 2004 US net farm income would be $5.5bn lower than in the previous year.

The projected drop in net farm income for 2004 is primarily due to the impact on cattle prices and beef exports of the discovery of a case of BSE in the US in December.

In 2003, US beef exports reached an estimated $3.3bn or 2.58 billion pounds in weight. Prior to the discovery of BSE, 2004 exports were predicted to grow by 0.5% to 2.61 billion pounds. However, due to BSE, this export forecast has been cut to 0.63 billion pounds, a dramatic 75% decline from the 2003 level. It could be even worse if major markets remain closed to US beef for an extended period, Global Insight said.

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