HACCP in Pork Processing: Costs and Benefits

As public and private demand for food safety grows, firms need to be able to evaluate the optimal (least-cost) combinations of interventions to reduce pathogens. We use data from input suppliers to hog packing firms and from meat science studies to examine the cost function for pathogen reduction. An economic optimization model is used to explore the trade offs in achieving multiple pathogen reduction targets. Our data indicate costs of individual pathogen reduction technologies are in the range of $0.03 to $0.20 per carcass for hogs, and that optimal combinations of technologies may cost as much as $0.47 per carcass. The cost estimates for specific interventions show that power, water, and labor are important to achieve greater pathogen reductions. Thus operating costs for interventions are highly dependent on water and power rates. Labor costs (including training and turnover costs) are likely to become more important to holding down costs of monitoring and control. The cost issues surrounding food safety are linked to other performance issues in the meat industry. Our estimated costs of pathogen reduction measures represent less than 2% of packing costs, although we caution that the total costs of HACCP must also include monitoring and testing costs. These estimates are considerably larger than initial FSIS estimates of HACCP costs to industry, but improvements in food safety may be achieved through relatively modest investments in large plants.