Gossip fuels market drop
Here’s a good plot line for The X-Files.
A 62-year-old man, who likes to garden, keels over dead from a mysterious brain disorder.
He has apparently died of Creutzfeldt-Jakob Disease, a brain ailment that is the human equivalent to BSE or mad cow disease. Wild speculation mounts that he got it by using bone meal fertilizer on his roses.
TV news picks up the oddity and a day later Chicago Mercantile Exchange cattle futures drop the limit when jittery traders panic at the news. It sounds fantastic, but it actually happened in mid-April.
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The man, Joseph Gabor of Schererville, Indiana, a small town near Chicago, died March 30. The local press first carried the story and on April 15 a Chicago TV station said he “died of an illness linked to mad cow disease.”
On April 16, the April and June cattle futures contracts dropped the 1.5-cent a pound limit, despite good fundamental news about higher wholesale beef prices. The news also put pressure on corn and soy feeds because traders wondered if livestock numbers would drop. Even publicly traded meat packers saw their share prices drop.
The U.S. National Cattlemen’s Beef Association and the Centres for Disease Control both stepped in to say there was no connection between animal bone meal and brain disease. The centre also said there is no direct evidence that mad cow disease can spread to humans although British researchers think there might be a link.
Things calmed down later in the week.
But the incident shows how concerned markets are about the safety of food, as if we needed any more after seeing what happened to the British beef herd last year.
The concern has even spread to good old Jell-O.
An advisory committee of the U.S. Food and Drug Administration has worries about gelatin, the thickening agent found in Jell-O, candies and other confections, canned meats and cosmetics.
Gelatin is made from the bones and other waste material of slaughtered cattle and pigs.
In 1992 the U.S. banned the importation of cow-based products from countries that had BSE in their herds, but didn’t ban gelatin because it is not derived from brain or spinal cord tissue, the most likely carrier of BSE.
But now the FDA committee, apparently preferring to be safe, not sorry, has advised that the gelatin exemption be stopped.
A spokesperson for Kraft was quick to say that gelatin made from American cattle is safe.
Phew, I thought mom’s famous jellied salad was endangered there for a moment.
