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Economic Impacts of Foreign Animal Disease

Author

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  • 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.

Suggested Citation

  • Paarlberg, Philip L. & Hillberg, Ann & Lee, John G. & Mathews, Kenneth H., Jr., 2008. "Economic Impacts of Foreign Animal Disease," Economic Research Report 56453, United States Department of Agriculture, Economic Research Service.
  • Handle: RePEc:ags:uersrr:56453
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    File URL: http://purl.umn.edu/56453
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. 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.
    2. Tozer, Peter & Marsh, Thomas, 2012. "Domestic and trade impacts of foot-and-mouth disease on the Australian beef industry," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(3), September.
    3. Costa, Rafael & Bessler, David & Rosson, C. Parr, 2015. "The Impacts of Foot and Mouth Disease Outbreaks on the Brazilian Meat Market," Journal of Food Distribution Research, Food Distribution Research Society, vol. 46(3), November.
    4. Johnson, Kamina K. & Antognoli, Maria C. & Ahola, Sara C. & Gustafson, Lori L. & Branan, Matthew A. & Remmenga, Marta D. & Jones, Rebecca D. & Orloski, Kathleen A. & Hsi, David J., 2016. "Using a Portfolio Approach to Evaluate Animal Health Surveillance Portfolios in the United States," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235985, Agricultural and Applied Economics Association.
    5. Alves, Alexandre Florindo & Guilhoto, Joaquim José Martins, 2014. "The impact of cattle foot and mouth disease in the Brazilian economy," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182824, European Association of Agricultural Economists.
    6. 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.
    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. 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.
    9. DaBoer, Larry, 2009. "An Update on Farm Land Assessment for Property Taxes," Purdue Agricultural Economics Report (PAER) 188976, Purdue University, Department of Agricultural Economics.
    10. 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.
    11. 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.
    12. Arnaud Rault & Stéphane 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-LERECO.
    13. Leister, Amanda M. & Lee, John G. & Paarlberg, Philip L., 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.
    14. Hagerman, Amy D. & Delgado, Amy H. & Schoenbaum, Melissa, 2015. "Alternative Control Strategies with Uncertain Trade Barriers for Foot-and-Mouth Disease in Feedlot Operations," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205393, Agricultural and Applied Economics Association;Western Agricultural Economics Association.

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