Will Mad Cow Disease in California Lead to Bankruptcies?

By Edward Tan, JD on May 01, 2012 | Last updated on March 21, 2019

As reports continue to stream in regarding the California dairy cow infected with mad cow disease, American consumers are second-guessing their meat choices. The news has even caused two major South Korean stores to pull U.S. beef from their shelves. Could bankruptcy announcements follow?

While the USDA investigates the circumstances surrounding the tainted cow, the only thing certain is that the beef industry will likely suffer from the press.

But how much damage could the negative coverage do to beef producers and could it be enough to force bankruptcies?

The answer may come from looking at another recent beef industry controversy: pink slime.

Though the cattle industry has used the stuff for years, when stories about pink slime first "broke" in March, a public uproar ensued.

Some American stores started pulling products containing the filler. And many began advertising pink slime-free ground beef as a selling point to customers.

Combined with the deluge of negative media, the beef industry started to cave. Many vowed to remove pink slime from their products. While it remains to be seen if this will keep cattle producers afloat, one beef company has already filed bankruptcy.

And that was just the fallout so far for a foodstuff deemed "safe to eat" by the USDA. Imagine what could happen to beef producers combating press about a disease that can kill you.

Great Britain's cow industry experienced the devastation firsthand. During its mad cow disease outbreak in the 1990s, many farmers were faced with the decision of going bankrupt or switching to crops.

While this is only America's fourth reported case of mad cow disease, the pink slime controversy shows that bankruptcy remains possible.

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