IDEAS home Printed from https://ideas.repec.org/p/ias/cpaper/11-wp525.html
   My bibliography  Save this paper

Economy Wide Impacts of a Foreign Animal Disease in the United States

Author

Abstract

This report uses the CARD FAPRI model to evaluate the economy wide impacts of a disease outbreak that eliminates US pork and beef exports simultaneously and pork exports alone. In either case industry losses are enormous and spread well beyond the pork and beef sectors. Revenues fall significantly for poultry, corn and soybean producers and employment in rural areas is negatively impacted as the US pork and beef sectors are forced to downsize. Revenue losses in the combined US pork and beef industries fall by an average of $12.9 billion per year. The removal of this level of value added activity is equivalent to the loss of as many as 58,000 full time jobs. The report uses option prices to calculate the likelihood of a price impact of the magnitude reported here. This suggests a less than one percent possibility of an outbreak of this severity. Multiplying the probability of an outbreak times the reduction in pork industry net revenues over variable costs in the event of an outbreak, suggests that the annual benefit of eliminating the possibility of this outcome would be worth $137 million.

Suggested Citation

  • Dermot J. Hayes & Jacinto F. Fabiosa & Amani Elobeid & Miguel Carriquiry, 2011. "Economy Wide Impacts of a Foreign Animal Disease in the United States," Center for Agricultural and Rural Development (CARD) Publications 11-wp525, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  • Handle: RePEc:ias:cpaper:11-wp525
    as

    Download full text from publisher

    File URL: https://www.card.iastate.edu/products/publications/pdf/11wp525.pdf
    File Function: Full Text
    Download Restriction: no

    File URL: https://www.card.iastate.edu/products/publications/synopsis/?p=1283
    File Function: Online Synopsis
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Johnson, Kamina K. & Hagerman, Amy D. & Thompson, Jada M. & Kopral, Christine A., 2015. "Factors Influencing Export Value Recovery after Highly Pathogenic Poultry Disease Outbreaks," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 18(A), pages 1-16, July.
    2. Jiwon Lee & Lee L. Schulz & Glynn T. Tonsor, 2021. "Swine producer willingness to pay for Tier 1 disease risk mitigation under multifaceted ambiguity," Agribusiness, John Wiley & Sons, Ltd., vol. 37(4), pages 858-875, October.
    3. Pudenz, Christopher C. & Schulz, Lee L, 2020. "Quantifying the U.S. Market Response to the African Swine Fever Outbreak in China," ISU General Staff Papers 202001010800001055, Iowa State University, Department of Economics.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ias:cpaper:11-wp525. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/caiasus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.