New Zealand beef exporters are watching closely for import bans on US beef in the wake of the discovery of mad cow disease in a dairy cow in California.
However, the latest incident may not offer the same boost to New Zealand beef exports that the country enjoyed after the US outbreak in 2003, when key Asia markets banned imports of the meat from the US.
New Zealand beef exports to South Korea, Japan and Taiwan effectively doubled in the wake the first case of mad cow disease in the US in late 2003 as many countries stopped buying American beef. That saw US beef exports drop 82 per cent in the following 12 months.
To date, there has been no 'country response' to the California case. The disease, called bovine spongiform encephalopathy, was found during a routine test of a cow at a rendering factory. The latest instance was of the rare 'atypical' BSE, according to John Clifford, chief veterinarian of the US Department of Agriculture. That strain typically isn't linked to eating infected feed, unlike in 2003.
Japan has said it won't ban US beef this time. South Korean officials say they're still evaluating the situation and no decision to ban American imports have been made. Still, major Korea retailers Lotte Mart and Home Plus have temporarily suspended sales, the BBC reported.
"This is going to take some time to shake out," Beef + Lamb New Zealand chairman Mike Petersen told BusinessDesk. "It depends on the reaction of importing countries."
"We need to see if this is just a one-off" which is more likely given it is the atypical strain, he said. There's less likely to be a country response and the reaction may be from individual importers or retailers in countries that buy American beef, he said.
Still, Petersen said the California mad-cow case could be seized upon by opponents of the Korea-United States Free Trade Agreement, known as the KORUS FTA, which is aimed at removing trade tariffs and has been opposed by Korea's own beef industry.
"This is like pennies from heaven" for them, Petersen said.
Meat exports were worth $5.48 billion in the 12 months ended in February, second only to dairy product shipments and amount to about 11 per cent of New Zealand's total merchandise exports.