Updated from 3:13 p.m. EDTShares of fast-food companies and food producers tanked Tuesday as investors worried that a single case of mad cow disease in Canada would stop consumers from eating beef. "The key is public perception," said Carl Sibilski, a restaurant analyst at Morningstar. Although the health risk is probably quite small, Sibilski said, food companies could still suffer from bad publicity. Shares of McDonald's ( MCD) slid 6% Tuesday at $17, while Tyson Foods ( TSN), the biggest U.S. beef processor, skidded 5% at $8.99. Meanwhile, Wendy's ( WEN) was off by 6% at $28.63. McDonald's only has about 2% exposure to Canada and its operations there are self-contained, according to Sibilski. "But that's not going to help them if the U.S. consumer stops eating beef" out of fear of getting sick. Still, he added that McDonald's is in a better position than competitor Wendy's because McDonald's also has operations in Europe. "The U.S. is McDonald's largest and most profitable country but they are diversified," he said. "For a company like Wendy's, its
"Any additional herds that are found to be at risk as a result of the investigation will also be depopulated," he said. The origin of the cow is not yet known and so far no quarantines have been imposed on other herds. The U.S. Department of Agriculture moved to ban Canadian beef exports in the wake of the discovery, but the U.S. has guaranteed the ban would be temporary, according to Vanclief. The news sent cattle futures tumbling on the Chicago Mercantile Exchange. Cattle for June delivery fell 1.5 cents, the maximum allowed by the exchange, to 72.4 cents a pound. Outback Steakhouse ( OSI) was down 3% to $35.55 and Sonic Corp. ( SONC) fell 3% at $24.50. Still, SureBeam Corp. ( SURE), which makes electron systems to kill bacteria in food, gained 9% at $3.22. The price gain came even though the company itself doesn't think its technology would be effective against mad cow. A statement on its Web site reads: "The causal agent of BSE is thought to be a mutant protein that cannot be effectively treated by any irradiation or other process known to man." An outbreak of mad cow disease, which is formally called bovine spongiform encephalopathy, led numerous countries to ban the import of British beef in the 1990s.