and Reuters News Agency
It was a one-day wonder, but rumours that five Kansas cattle were
infected with foot-and-mouth disease shook commodity markets and food
company share prices last week.
Calm returned and prices rebounded March 14 after the U.S. Department
of Agriculture said the tests proved the cattle did not have the
disease.
But the incident was sobering and Canadian cattle producers didn’t
escape the impact.
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market, said Anne Dunford of Canfax, a beef markets information agency.
“We talk about a border, but for the market it really doesn’t exist.
When something like this happens, the effect is almost immediate.”
Canadian producers who wanted to hedge cattle prices on March 13 found
markets sharply down because of the scare.
Canada’s cattle industry relies on the Chicago Mercantile Exchange for
hedging and price discovery, so when that exchange lurches, so does
Canada, Dunford said.
Similar eruptions happened about a year ago, during Britain’s
foot-and-mouth outbreak.
The British experience sensitized markets to the extreme financial
damage infectious diseases can cause, but Dunford thinks markets are
even more touchy today as they deal with the fallout from the Enron
accounting scandal.
“There’s so much worry in traders now, it goes way beyond cattle,” said
Dunford.
She believes little can be learned from last week’s shakeup. Markets
won’t stop reacting to rumours just because this one turned out to be
untrue.
Joe Miller of the American Farm Bureau Federation said the quick
recovery from the scare indicated that U.S. measures to prevent the
disease were working.
“The important thing is to have a system in place to keep it out and,
if we do by chance get it, to respond extremely quickly to it,” he said.
“I think it showed the system is functioning fairly well.”
Government spokesperson Alisa Harrison said “USDA and state animal
health personnel monitor for foreign animal diseases every day.
“In 2001, we investigated and tested approximately 800 cases. All were
negative.”
