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Economic Impacts of Foreign Animal Disease

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Author Info

  • Paarlberg, Philip L.
  • Hillberg, Ann
  • Lee, John G.
  • Mathews, Kenneth H., Jr.

Abstract

This report presents a modeling framework in which epidemiological model results are integrated with an economic model of the U.S. agricultural sector to enable estimation of the economic impacts of outbreaks of foreign-source livestock diseases. To demonstrate the model, the study assessed results of a hypothetical outbreak of foot-and-mouth disease (FMD). The modeling framework includes effects of the FMD episode on all major agricultural products and assesses these effects on aggregate supply, demand, and trade over 16 quarters. Model results show a potential for large trade-related losses for beef, beef cattle, hogs, and pork, though relatively few animals are destroyed. The swine and pork sectors recover shortly after assumed export restrictions end, but effects on the beef and cattle sectors last longer due to the longer cattle production cycle. The best control strategies prove to be those that reduce the duration of the outbreak. While export embargoes lead to losses for many agricultural sectors, they also increase domestic supplies and lower prices, benefiting domestic consumers. Total losses to livestock related enterprises over 16 quarters range between $2,773 million and $4,062 million, depending on disease intensity level, duration of the outbreak, and the response scenario. After seven quarters, production of all commodities returns to pre-disease levels in our hypothesized scenario.

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Bibliographic Info

Paper provided by United States Department of Agriculture, Economic Research Service in its series Economic Research Report with number 56453.

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Date of creation: May 2008
Date of revision:
Handle: RePEc:ags:uersrr:56453

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Related research

Keywords: Animal disease; epidemiology; foot and mouth disease (FMD); sector model; trade; Agricultural and Food Policy; Food Consumption/Nutrition/Food Safety; International Development; International Relations/Trade; Livestock Production/Industries;

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Cited by:
  1. Gohin, Alexandre & Rault, Arnaud, 2013. "Assessing the economic costs of a foot and mouth disease outbreak on Brittany: A dynamic computable general equilibrium analysis," Food Policy, Elsevier, vol. 39(C), pages 97-107.
  2. Philip L. Paarlberg & John G. Lee & Ann Hillberg Seitzinger & Mildred M.Haley, 2010. "Prioritization Of Sanitary Restrications Facing U.S. Exports Of Bovine, Porcine, And Ovine For Determination Of Surveillance Needs," Working Papers 10-8, Purdue University, College of Agriculture, Department of Agricultural Economics.
  3. Arnaud Rault & St├ęphane Krebs, 2011. "Catastrophic risk and risk management, what do we know about livestock epidemics? State of the art and prospects," Working Papers SMART - LERECO 11-05, INRA UMR SMART.
  4. Gohin, Alexandre & Rault, Arnaud, 2012. "Assessing the economic costs of an outbreak of Foot and Mouth Disease on Brittany: A dynamic computable general equilibrium approach," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122438, European Association of Agricultural Economists.
  5. Leister, Amanda M. & Lee, John G. & Paarlberg, Philip P., 2013. "Dynamic Effects of Drought on the U.S. Livestock Sector," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149946, Agricultural and Applied Economics Association.
  6. Boisvert, Richard N. & Kay, David & Turvey, Calum G., 2012. "Macroeconomic costs to large scale disruptions of food production: The case of foot- and-mouth disease in the United States," Economic Modelling, Elsevier, vol. 29(5), pages 1921-1930.
  7. Yang, Shang-Ho & Reed, Michael R. & Saghaian, Sayed H., 2012. "International Pork Trade and Foot-and-Mouth Disease," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124356, Agricultural and Applied Economics Association.
  8. Gohin, Alexandre & Rault, Arnaud, 2012. "Assessing the economic costs of an outbreak of Foot and Mouth Disease on Brittany: A dynamic computable general equilibrium," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 134712, Agricultural Economics Society.

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