I generally agree with Jonah that meat producers should be allowed to test for BSE and advertise that fact. More broadly, I believe food safety overall would be improved were there less reliance on USDA testing, and companies were forced to compete on safety — that is, if companies could seek competitive advantage by ensuring greater levels of safety and sanitation in the production process. All of this is foreclosed under existing regulations, and would be the likely, if not inevitable, result of allowing one company to test for BSE. No doubt, this worries the folks at USDA. If they allow one company to test for BSE, then they will have little basis upon which to prevent other companies from adopting other (more meaningful) tests or safety procedures.
I would raise two other points that Jonah may wish to address. First, the need for widespread BSE testing is close to zero. The risk posed by BSE is infinitessimal compared to that posed by other food-borne illnesses. Yet because BSE is more mysterious and bizarre, it receives all of the attention. Thus there is an argument that allowing a company to grandstand on the BSE issue disserves public health because it focuses our attention (and resources) on an inconsequential health threat, while other — far greater — threats remain in the food supply.
Second, as I understand it there is a reasaonbly high rate of false positives in BSE testing. In amny cases, an initial positive finding is later demosntrated to be erroneous. Thus, were a company to start widespread BSE testing, it is inevitable that there would be a significant number of false positives, and that these erroneous reports of BSE contamination would roil domestic beef markets and harm other producers. While I do not find this to be a compelling argument against allowing a private company to test, I think it is a point that should be addressed.