Return to Transcripts main page
American Morning
Financial Repercussions of Discovery of Mad Cow Disease in U.S.
Aired December 24, 2003 - 07:34 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DR. SANJAY GUPTA, CNN ANCHOR: A suspected case of mad cow disease -- we've been talking about this all morning -- that's it in U.S. may pose a small health risk, but there have already been major financial repercussions.
So we've talked about the health stuff, but the business stuff, as well, a big deal -- you've talked a lot about the beef industry.
How is this going to affect them?
ANDY SERWER, "FORTUNE" MAGAZINE: Well, the beef industry has been doing incredibly well over the past year, but this is not the kind of Christmas present that the economy either anticipated or needed. The overall economy, the repercussions, as you've suggested, Sanjay, are significant. Let's get to them a little bit here.
First of all, we have countries that are banning imports of U.S. beef. There is a list right here. U.S. banned exports, a significant amount of the world's meat supply.
First of all, this is a $50 billion business in the U.S. It is the largest segment of the U.S. agricultural industry. And one way to sort of look at the potential fallout, Sanjay, is to look at what happened in Canada earlier this year. And May is when the first case was discovered up there. You can see what happened. They lost $2.5 billion, not as much as could happen here, obviously. A much smaller economy. Sales were down 20 percent and they're still facing restrictions.
It crippled the European agricultural industry years ago.
And here are some of the biggest states, the beef producing states -- Texas, Kansas, Nebraska, Colorado and Oklahoma. So not good news for folks waking up there.
GUPTA: Washington not on that list, where the sick cow was found.
SERWER: A smaller one.
GUPTA: Yes.
SERWER: Yes.
GUPTA: And you've talked a lot about the Atkins Diet and how that can actually improve the beef industry. What -- how do you think the market is going to react today to this news?
SERWER: Well, I don't think it's going to be good news at all for the markets, particularly for stocks that are in this sector. And it's maybe more far reaching than you think. Obviously McDonald's, they've already been talking about that this morning, saying that beef is not in their system at all. Outback Steakhouse, Wendy's, supermarkets could be impacted, as well, and we'll be talking about some of those companies later on this morning.
GUPTA: All right, Andy, we'll keep an eye on it.
McDonald's always making a big point about the fact that they never take meat from downed animals. We're going to talk about that, as well.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
U.S.>
Aired December 24, 2003 - 07:34 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DR. SANJAY GUPTA, CNN ANCHOR: A suspected case of mad cow disease -- we've been talking about this all morning -- that's it in U.S. may pose a small health risk, but there have already been major financial repercussions.
So we've talked about the health stuff, but the business stuff, as well, a big deal -- you've talked a lot about the beef industry.
How is this going to affect them?
ANDY SERWER, "FORTUNE" MAGAZINE: Well, the beef industry has been doing incredibly well over the past year, but this is not the kind of Christmas present that the economy either anticipated or needed. The overall economy, the repercussions, as you've suggested, Sanjay, are significant. Let's get to them a little bit here.
First of all, we have countries that are banning imports of U.S. beef. There is a list right here. U.S. banned exports, a significant amount of the world's meat supply.
First of all, this is a $50 billion business in the U.S. It is the largest segment of the U.S. agricultural industry. And one way to sort of look at the potential fallout, Sanjay, is to look at what happened in Canada earlier this year. And May is when the first case was discovered up there. You can see what happened. They lost $2.5 billion, not as much as could happen here, obviously. A much smaller economy. Sales were down 20 percent and they're still facing restrictions.
It crippled the European agricultural industry years ago.
And here are some of the biggest states, the beef producing states -- Texas, Kansas, Nebraska, Colorado and Oklahoma. So not good news for folks waking up there.
GUPTA: Washington not on that list, where the sick cow was found.
SERWER: A smaller one.
GUPTA: Yes.
SERWER: Yes.
GUPTA: And you've talked a lot about the Atkins Diet and how that can actually improve the beef industry. What -- how do you think the market is going to react today to this news?
SERWER: Well, I don't think it's going to be good news at all for the markets, particularly for stocks that are in this sector. And it's maybe more far reaching than you think. Obviously McDonald's, they've already been talking about that this morning, saying that beef is not in their system at all. Outback Steakhouse, Wendy's, supermarkets could be impacted, as well, and we'll be talking about some of those companies later on this morning.
GUPTA: All right, Andy, we'll keep an eye on it.
McDonald's always making a big point about the fact that they never take meat from downed animals. We're going to talk about that, as well.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
U.S.>
