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Distribution of direct recall costs along the milk chain

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  • A.G.J. Velthuis

    (Department of Business Economics, Wageningen University, Hollandseweg 1, 6706 KN Wageningen, The Netherlands)

  • M. Meuwissen

    (Department of Business Economics, Wageningen University, Hollandseweg 1, 6706 KN Wageningen, The Netherlands)

  • R.B.M. Huirne

    (Department of Business Economics, Wageningen University, Hollandseweg 1, 6706 KN Wageningen, The Netherlands)

Abstract

The relation between time and the direct recall costs of one batch of milk was investigated in this study. We developed a Monte Carlo simulation model of a farm-to-consumer supply chain associated with one batch of milk of 150,000 kilograms. The direct recall costs of recalling a batch are less than €100,000 in the first 16 hours after the milk has been collected from the farms, but the costs increase rapidly to more than €140,000. With this study, we showed that a modeling approach can give insight into the relation between recall costs and time, and it can support the development of monitoring schemes at the chain level. [EconLit citations: D210, Q180]. © 2009 Wiley Periodicals, Inc.

Suggested Citation

  • A.G.J. Velthuis & M. Meuwissen & R.B.M. Huirne, 2009. "Distribution of direct recall costs along the milk chain," Agribusiness, John Wiley & Sons, Ltd., vol. 25(4), pages 466-479.
  • Handle: RePEc:wly:agribz:v:25:y:2009:i:4:p:466-479 DOI: 10.1002/agr.20220
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    References listed on IDEAS

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    1. Ratapol Teratanavat & Victoria Salin & Neal H. Hooker, 2005. "Recall event timing: Measures of managerial performance in U.S. meat and poultry plants," Agribusiness, John Wiley & Sons, Ltd., vol. 21(3), pages 351-373.
    2. Jarrell, Gregg & Peltzman, Sam, 1985. "The Impact of Product Recalls on the Wealth of Sellers," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 512-536, June.
    3. Michael R. Thomsen & Andrew M. McKenzie, 2001. "Market Incentives for Safe Foods: An Examination of Shareholder Losses from Meat and Poultry Recalls," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 526-538.
    4. Meuwissen, Miranda P.M. & Velthuis, Annet G.J. & Hogeveen, Henk & Huirne, Ruud B.M., 2003. "Traceability And Certification In Meat Supply Chains," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 21(2).
    5. Skees, Jerry R. & Botts, Aleta & Zeuli, Kimberly A., 2001. "The Potential For Recall Insurance To Improve Food Safety," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 4(01).
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