May 31, 2007
Economics Department
Insanity Over Mad Cow Testing
Instapundit had a link to an infuriating AP story:
WASHINGTON: The Bush administration said Tuesday it will fight to keep meatpackers from testing all their animals for mad cow disease.
Oh. Well, I'm not sure that's such a big deal. There's no need for the government to force meatpackers to test every animal if the current random spot testing protocol is good enough. That's a scientific question about statistics and the nature of the disease. There may not be any advantage to additional government inspection.
Then I read the rest of the article.
The Agriculture Department tests fewer than 1 percent of slaughtered cows for the disease, which can be fatal to humans who eat tainted beef. A beef producer in the western state of Kansas, Creekstone Farms Premium Beef, wants to test all of its cows.
So the meatpacker wants to do additional voluntary testing and the government is trying to stop them? This makes no sense: Creekstone owns the cows. Of course they can test them! Why would anybody want to stop them? Why prevent additional voluntary testing?
Larger meat companies feared that move because, if Creekstone should test its meat and advertised it as safe, they might have to perform the expensive tests on their larger herds as well.
I take it back. Suddenly it all makes a lot of sense. The other meatpackers are thieves, and the government is helping them.
The extra testing is going to increase Creekstone's cost of delivering beef to the market. But if customers like the idea of 100% testing, Creekstone will have increased the value of its product. Creekstone then has the option of raising the price to increase their revenue.
Alternatively, Creekstone could keep their prices low and try to increase their market share. This would squeeze the other meatpackers. They'd either have to lower their prices below Creekstone's or start 100% testing on their beef as well. Either way, there's a good chance it would eat into their profits. They hate when that happens.
That's a problem that those of us outside the agriculture industry have been wrestling with for some time now. We call it the free market. That's probably a strange and frightening concept to meatpackers, because the U.S. agricultural sector has been run as a communist-style command economy for as long as I can remember.
In a free market, the other meatpackers would either be earning a steady profit while Creekstone loses money on their idiotic testing idea or else they'd be racing to meet the consumer demand for more testing.
The Agriculture Department regulates the test and argued that widespread testing could lead to a false positive that would harm the meat industry.
Huh? Look, lots of things can harm the meat industry. Disney could release a new animated movie with singing cattle and suddenly millions of children could stop eating hamburger. Heck, not too long ago Oprah Winfrey said something bad about eating meat and sales took a dive.
These are all problems for the meat industry, but they should only be problems for the meat industry. The Department of Agriculture should stay out of it. Preventing voluntary testing is insane.
No, I take that back. Calling the Department of Agriculture insane is an insult to insane people, because at least when insane people behave badly they have the excuse that they're insane. The Department of Agriculture has people who know better, yet they do stuff like this anyway. That's just wrong.
This is nothing more than protection of the beef industry at the expense of consumers.
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