Tyson, McDonald?s Trampled by Canadian ?Mad Cow? Case

Shares of Tyson Foods Inc., the largest U.S. beef processor, and McDonald’s Corp., the world’s largest hamburger chain, fell sharply on May 20 after Canada said it had confirmed a case of mad cow disease.

Shares of McDonald’s slumped 5 percent and were the top loser in the Dow Jones Industrial Average. Tyson fell 4 percent.

Analysts said the news could have a ripple effect that could affect demand for beef in other markets.

“Canada, relative to Europe, is not as important to McDonald’s. It’s a real small piece of the biz,” said John Glass, an analyst who follows McDonald’s at CIBC World Markets. “But this is a serious issue, because you’re not dealing in facts, you’re dealing in perception.”

A Canadian official told the Reuters news agency that one cow in Alberta had tested positive for the disease. It was the first confirmed case of the brain-wasting disease, also known as bovine spongiform encephalopathy, in a cow raised in Canada.

The eight-year-old animal was slaughtered on Jan. 31 and did not go into the food chain.

There previously had been one case in Canada in an imported cow. The United States, which temporarily banned Canadian beef imports, has never reported a case of the disease. “Mad Cow” has been linked to about 100 deaths in Britan and Europe.

Although Canada is a smaller market for McDonald’s, talk of mad cow could cause a ripple effect both for McDonald’s and Tyson, analysts said.

“That is the real risk for someone like Tyson, if demand for beef falls by 25 percent overnight like it did in Japan and Britain,” said Todd Duvick, food industry analyst with Bank of America.