A rather unappetizing pre-holiday surprise hit the wires late Tuesday as the first case of mad cow disease was identified in the U.S.
Burger bellwethers McDonald's
McDonald's and Wendy's were both quick to point out that they do not use beef from the Washington-based supplier that produced the infected cow. The U.S. Dept. of Agriculture has said that it believes there is no danger to the food supply, though it plans to continue its investigation. However, in a preliminary press conference, the regulatory agency pointed out safeguards in place, including aggressive testing of cattle and the fact that the disease is not as highly contagious as many think.
Despite the assurances that this could be an isolated case and not a public health threat at all, many consumers will undoubtedly see this as an excuse to eschew the red meat. And it's been a banner year for beef, not unrelated to a diet called Atkins. Who hasn't seen people eating bunless burgers without shame? The USDA website cites the retail equivalent value of the beef industry at $65 billion.
Other restaurants that could suffer from the consumer's lack of appetite for beef include Outback Steakhouse
McDonald's stock had already lost 8.6% in early-morning trading Wednesday, while Wendy's shed 4.4%. Investors shaved 7.3% off the share price of meat processor Tyson Foods
Analysts are seeing this as potentially a good opportunity to buy restaurant stocks. There's definitely some credence to that theory, and it certainly seems too soon to press the panic button based on such preliminary data. (They also pointed out that Asian countries' ban on the protein would lower restaurants' beef costs here at home.)
However, it's hard to ignore the risk. Public reaction is a big variable here, and despite government assurances, consumers will probably lay off the beef until it's certain there aren't more cases. It's not hard to imagine beef will fall out of fashion, at least for a while.
Do McDonald's and other restaurants sound a whole lot less appetizing to you now, in both the investing and dining sense? Do you plan on limiting your protein to chicken for a while, until this is straightened out? Chew on it on our Food discussion board.
Alyce Lomax welcomes your feedback at email@example.com.