The overall impact of the recent case of bovine spongiform encephalopathy (BSE) in a US cow will be a 10% decline in 2004 net farm income from 2003, according to a market analysis firm.

Global Insight said that according to estimates from its agriculture group, 2004 US net farm income would be $5.5bn lower than in the previous year.

The projected drop in net farm income for 2004 is primarily due to the impact on cattle prices and beef exports of the discovery of a case of BSE in the US in December.

In 2003, US beef exports reached an estimated $3.3bn or 2.58 billion pounds in weight. Prior to the discovery of BSE, 2004 exports were predicted to grow by 0.5% to 2.61 billion pounds. However, due to BSE, this export forecast has been cut to 0.63 billion pounds, a dramatic 75% decline from the 2003 level. It could be even worse if major markets remain closed to US beef for an extended period, Global Insight said.