Kansas Wants Probe of Cattle Rumor
Fri Apr 5, 6:26 AM ET
By JOHN MILBURN, Associated Press Writer
TOPEKA, Kan. - Federal regulators have been asked to investigate a recent rumor of a cattle disease outbreak, which was blamed for a steep decline in beef prices that was estimated to have cost the industry as much as $50 million.
Kansas Attorney General Carla Stovall is asking for a federal probe into last month's unfounded rumor that an outbreak of foot-and-mouth (news - web sites) disease had hit northeast Kansas.
Stovall said Thursday the Commodity Futures Trading Commission has jurisdiction over cases involving allegations of price manipulation.
She said she sent a letter to CFTC chairman James Newsome in Washington, saying that because of the commission's "exclusive" jurisdiction, "we are unable to conduct our own investigation and prosecution."
On March 12, a rumor that nine cows at the Holton Livestock Market were infected spread quickly throughout the Midwest and to the floor of the Chicago Mercantile Exchange, where livestock futures contracts are traded.
Analysts estimate the rumor cost the industry as much as $50 million nationwide after prices dropped $1.50 per hundredweight for market cattle. Prices later rebounded.
CFTC spokesman Alan Sobba said Thursday that Kansas' request follows similar calls for an investigation from several states, the National Cattlemen's Beef Association (news - web sites) and other interested parties.
He said investigators are building a timeline, comparing events to March commodity prices. Details of the probe are expected to be released April 19 when the cattlemen's association meets in Washington.
Last week, Sen. Tom Harkin, D-Iowa, asked U.S. Attorney General John Ashcroft (news - web sites) to investigate. Harkin, chairman of the Senate Agriculture Committee, said a Justice Department (news - web sites) inquiry would strengthen the hand of other agencies investigating the incident.
Justice Department officials would not comment Thursday on Harkin's request.
Sen. Pat Roberts, R-Kan., has asked U.S. Department of Agriculture (news - web sites) Secretary Anne Veneman to investigate any improprieties.
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