Mad Cow, Foot-And-Mouth Sicken Some Non-Food Markets

April 22, 2001 Chicago Tribune by Hans Greimel

FRANKFURT, Germany -- Fruit chews pulled from store shelves in Poland. Price hikes for Italian shoes and French handbags. Animal fat abandoned by global makers of face cream and soap.

Europe's effort to rein in its bout of livestock disease isn't just hammering world supplies of lamb chops and prime rib. It's starting to hit the 40 percent of a cow, pig or sheep that never makes it to a supermarket shelf.

Consumers around the world may soon develop a newfound appreciation for these uneaten animal parts, which are skinned, ground up or melted down into ingredients used every day in a dizzying array of goods.

With fewer animals slaughtered in Europe due to fears of eating meat, hide prices are soaring. Shoppers could pay more for this summer's lineup of items like leather furniture, high-end car seats, clothing and shoes.

Costs also are rising for tallow, or animal fat, which is used in candles, soap and beauty products--though consumer prices appear unaffected for now as manufacturers absorb higher costs or use substitute ingredients.

European suppliers, meanwhile, face millions of dollars in losses.

"Our byproduct industry has taken a hammering," said Martin Grantley-Smith at Britain's Meat and Livestock Commission. "In straight exports, Britain will be losing millions of dollars a year."

British slaughterhouses used to get $7.25 per ton of byproduct material from companies eager to turn it into usable products. But with a host of new restrictions against using those parts, slaughterhouses are now having to pay up to $130 a ton to have it hauled away.

Bans imposed by nations around the world because of Mad Cow and foot-and-mouth diseases have halted 94 percent of the European Union's beef exports and 73 percent of its pork exports. They also have slowed Europe's weekly livestock slaughter from a half-million head to 350,000 head, according to, an Internet market report.

Restraints on using non-edible beef byproducts have been around since the Mad Cow outbreak in the mid-1990s. But a Mad Cow scare that peaked in the fall and the current foot-and-mouth crisis have led countries to fortify or extend those laws.

Europe is trying to halt the spread of foot-and-mouth disease, which unlike Mad Cow poses no human health threat, by incineration--hides, hooves, bones, fat and all.

Europe's mass culls have torpedoed the local supply of leather. Worldwide, the supply squeeze has pushed up cowhide prices 15 percent in the last two months, reported.

The market claimed its first U.S. victim last month when Irving Tanning Co., a 390-employee firm in Hartland, Maine, filed for bankruptcy protection.

Irving Tanning doesn't buy European hides, but vice president Paul Larochelle said the company was pinched by a blitz of overseas demand for U.S. skins that pushed stateside prices up 66 percent.

"You can only absorb so much before you have to turn around and say, `Enough is enough,"' Larochelle said.

To counteract tight demand, the European Footwear Confederation has petitioned the European Union to order member countries to remove pelts and skins before animals are destroyed.

But what's a crisis to one region is often an opportunity to another.

Increased European demand for leather is fueling a mini-boom in Brazil, where ranchers are boosting their 2001 export forecast to $850 million from an earlier prediction of $750 million, says Jose Roberto Scarabel, president of the Brazilian Tannery Industries Center.

U.S. hide exports shot up 25 percent to $2 billion last year after the Mad Cow scare struck, according to Leather Industries of America, another trade group. And January exports were 12 percent ahead of last January's.

In other byproduct markets, the impact is less direct.

About 12 percent of an animal is usually ground down and melted to make tallow. The animal fat is widely used in consumer and industrial goods despite a shift to substitutes in the mid-1990s by makers of cosmetics and other products seeking to address health concerns raised in earlier Mad Cow scares.

But the current outbreak has forced countries such as Japan to institute full-fledged bans against animal products in such consumer goods.

That has ramifications in Europe for companies like Cognis, a Netherlands-based chemical company that makes raw ingredients for body care products as well as industrial lubricants.

Just a few years ago, it used animal tallow in nearly half of its cosmetics. Today, virtually none of its health-care line uses animal products, although tallow still accounts for 20 percent of its industrial chemicals.

Cognis calculates it costs 10 percent more to make vegetable-based products.

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