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Marler Blog Providing Commentary on Food Poisoning Outbreaks & Litigation

The Raw Economics Driving the Use of Downers

This is the land of capitalism.  So, we all know that when it comes to using Downers, or non-ambulatory cows, there has to be that raw underbelly of profit or, perhaps more accurately, the illusion of profits.  Let’s examine if the use of downers makes good economic sense.

First some background: In the U.S., we both import and export slaughtered beef and dairy cattle. According to USA Today, some 35 million U.S. cattle are slaughtered each year in the U.S.  According to a recent report by JAVMA, the exact number of nonambulatory cattle on US farms or feedlots or sent to slaughter facilities is difficult to ascertain. However, estimates may approach 500,000 animals per year according to a recent JAVMA report.

According to that same report, the incidence of nonambulatory cattle is greater among dairy than among beef breeds.  There are limited data on the food safety of beef produced from nonambulatory cattle sent to slaughter facilities.  However, the prevalence of E. coli O157:H7 and Salmonella was greater in nonambulatory than in ambulatory dairy cattle.  The causes for nonambulatory cattle range from loss of calcium due to milk production, calving injuries, broken legs or neurological conditions.

Certainly, some of these downer animals could be safe additions to the food supply.  Would it make sense to have more rigorous inspection as animals arrive to slaughter by qualified inspectors to exclude animals that pose a risk?  Or, is it simply better to exclude them all?


But, first, let’s back up.  Temple Grandin, professor of animal science at Colorado State University, believes 90% of downer cases are preventable.  She observed that 5-10 percent of the dairies are responsible for 90-95 percent of the downed dairy cows.  This implies that the majority of downers are preventable.  Gradin further insists that good management could prevent 75 percent of all downed cattle. (Source: Cited in “A Farm Sanctuary Campaign” in a letter to FDA, September 27, 2004).  Therefore, that returns us to our original question which is: What are the economic pros and cons for excluding downers from the food supply system?

The pros aren’t persuasive. In her analysis of the slaughter of downer cows in the state of California, Dr. Pam Hullinger of the state’s Department of Food and Agriculture found that, on average, only $28.70 in profit was realized for each downed cow leaving the farm.  Those numbers were from 1999. They may be a little higher now but not by much. Economics also force us to take into account the overall cost of the inefficiencies which most frequently produce those downers. According to a study done by I. Lambert those inefficiencies totaled about $458 a head for each cow which is slaughtered.

What are the cons?  Well, we might find them mighty persuasive.  To begin with, clearly, the cost of the recent recall in both recall costs and lost sales is enormous.  Also, there is the hit to the reputation of the farms which shipped the downers and to their relationship with the middlemen and the slaughterhouses.

In addition, the export market is highly vulnerable to reports of compromised food safety.  As we all might remember, the reaction was swift by both foreign governments banning imports of U.S. beef and from consumers afraid of consuming the beef after one mad cow was found in 2003.  For example, that one cow in the U.S. resulted in a $3.2 billion to $4.7 billion export revenue loss to the U.S. beef industry in 2004.

Another key argument against including downers is the burden of compliance. For instance, a Kansas State study in 2005 on the cost to the beef industry to comply with the new downer rules found that it was expensive for the industry to in fact meet the requirements.  Regulations issued in 2004 by USDA’s Food Safety and Inspection Service had an estimated net cost to the beef industry of $200 million, plus some one-time investments that were substantial but varied from firm to firm.  Those costs related to the inability to market downers, the need to age cattle presented for slaughter, to segregate and process separately cattle over 30 months, and to prevent certain tissues from entering the food supply.  To offset the cost of complying with new regulations, packers are now paying less for cattle over 30 months of age.  According to USDA, some packers reported discounting cattle 30 months of age by as much as $35 for every 100 pounds of carcass weight.  However, average packer discounts for cattle over 30 months of age were closer to $10 per 100 pounds of carcass weight.

Weighing the pros and the cons, we can conclude that the payoff of including downers is, at best, illusory, and, at worst, depressing prices in the whole industry.  The raw underbelly of the economics of the beef industry shows that the whole downer issue puts at risk the exploding export market.   As more developing countries become middle class, their demand for protein, especially beef, is skyrocketing.

In addition to the brute economics, we have to look at the intangible issues.  Animals will receive better and more humane treatment if downers are prevented and when a nonambulatory condition does occur, put down on the farm.  The industry’s image will improve, both domestically and in export markets.  Question to readers – how to we get this to work?

  • http://Http://janegenova.com jane Genova

    This economic analysis of a regulatory problem is an interesting approach for an attorney to take. And, I can bet it will also be an effective one to persuade all constituencies – government, cattle producers and beef-eaters – to continue the ban on all non-ambulatory animals.

  • MaryF

    Thank you for this informative commentary. Using non-ambulatory animals as food is reckless and extremely inhumane. Concerned individuals should let the U.S. Secretary of Agriculture know that they are opposed (see: http://tinyurl.com/29wdpq ). There is legislation pending in Congress to ban the use of non-ambulatory animals in the human food supply. To support it, see “Downed Animal and Food Safety Protection Act” at: http://tinyurl.com/2qot24

  • MikeB

    The only way to get something like this to work is to make sure that the stake holders are themselves at risk when processing downers. IE- legislate a huge fines for farmers supplying downers to slaughter houses and even bigger fines for slaughter houses that process downers. Just make sure the risk well outweighs the potential gain. The analysis is done for the industry but the dollar grab is done by individuals. If a farmer slips a downer into the system and gets away with it, the farmer gains. If the slaughterhouse slips the downer through their system they gain at that moment.
    Chances of this ever happening I would guess to be 0. The fact that in all the 35 million cattle slaughtered yearly not one case of BSE has surfaced does leave one wondering.

  • http://www.marlerblog.com/2008/03/articles/lawyer-oped/test-the-westlandhallmark-recalled-meat/index.html Marler Blog

    Test the Westland/Hallmark Recalled Meat.

    Once again, Stephen J. Hedges of the CHICAGO TRIBUNE is on top of the issues surrounding the slaughter of “downer” cows, and the risks (or not) to our food supply. His article, “The Last Roundup” appeared in the BUFFALO NEWS…