Cattle Prices Tumble; U.S. May Have 2nd Case of Mad Cow Disease

Nov. 18 (Bloomberg) -- Cattle prices in Chicago fell the most in four months on concern a preliminary test for mad cow in the U.S. may lead to the country's second confirmed case of the disease.

The Department of Agriculture's rapid-screening program found its first inconclusive test for the brain-wasting disease since June. Tissue samples are being tested at an Ames, Iowa, lab to determine whether the animal has bovine spongiform encephalopathy, or BSE. The meat didn't enter the food chain, and test results are expected in four to seven days.

``The market hates uncertainty and this test result increases uncertainty about demand,'' said Bob Wilson, an analyst for HedgersEdge.com in Greenwood Village, Colorado. ``We won't know if this is an overreaction until the test results come back.''

Cattle futures for February delivery fell 2.45 cents, or 2.8 percent, to 86.45 cents a pound at 10:25 a.m. on the Chicago Mercantile Exchange, the biggest percentage decline since June 28, when another inconclusive test was announced.

A futures contract is an agreement to buy or sell a commodity at a specified price and date.

Cattle futures fell 4.1 percent in the past year after the disease was discovered in December and more than 40 nations banned U.S. beef.

The latest sample is the third to produce inconclusive results. The two others were later found to be negative. A total of 113,264 tests have been conducted since June 1, the USDA said on its Web Site.

Inconclusive tests have raised concern that government efforts to boost exports may be derailed. U.S. beef exports last year were valued at $3.8 billion. A second confirmed case of mad cow may erode consumer demand and sales for companies such as Tyson Foods Inc., the largest U.S. beef processor.