IDEAS home Printed from https://ideas.repec.org/p/ags/saeana/46053.html
   My bibliography  Save this paper

A Foot and Mouth Disease Induced Model of US Excess Supply of Beef

Author

Listed:
  • Yeboah, Osei-Agyeman
  • Ofori-Boadu, Victor
  • Salifou, Samaila

Abstract

Agriculture is a vulnerable sector of the U.S economy, accounting for 13% of Gross Domestic Product and 15% of employment. It produces quality cheap food for domestic consumption and accounts for more than $65 billion in export revenues. Contagious animal diseases like Foot and Mouth Disease (FMD) are often referred to as economic diseases because of the magnitude of harm they cause producers, local communities and the consequences in international trade. Losses from the 2001 FMD outbreak in the United Kingdom are estimated at $10.7 to $11.7 billion. The total cost of an FMD outbreak is the sum of eradication cost, production losses, and the loss of exports. This paper examines the export effects of a bioterrorist attack such as the introduction of FMD on the US beef industry. The context is to model the US beef market as a price taker on the international beef market, the simplifying “small open economy” assumption of international economics. Although, the beef market is linked to beef prices around the world, we tend to conceive of the US beef market in terms of domestic supply and demand and the resulting domestic equilibrium price. The excess supply of beef is the difference between quantities supplied and demanded that increases with price and responds to other influences on domestic supply and demand. We assumed that U.S consumers will exercise more caution when purchasing beef at grocery store as a result of the outbreak of FMD. As U.S consumers alter their diet, poultry and pork will become good substitutes with poultry having a higher demand than pork. The economic impact of FMD is simulated based on expected changes in price of beef and its substitutes based on three different scenarios of the levels of FMD occurrences.

Suggested Citation

  • Yeboah, Osei-Agyeman & Ofori-Boadu, Victor & Salifou, Samaila, 2009. "A Foot and Mouth Disease Induced Model of US Excess Supply of Beef," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46053, Southern Agricultural Economics Association.
  • Handle: RePEc:ags:saeana:46053
    DOI: 10.22004/ag.econ.46053
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/46053/files/Yeboah_SAEA_09_FMD.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.46053?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jarvis, Lovell S, 1974. "Cattle as Capital Goods and Ranchers as Portfolio Managers: An Application to the Argentine Cattle Sector," Journal of Political Economy, University of Chicago Press, vol. 82(3), pages 489-520, May/June.
    2. Randal R. Rucker & Oscar R. Burt & Jeffrey T. LaFrance, 1984. "An Econometric Model of Cattle Inventories," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(2), pages 131-144.
    3. Peterson, Hikaru Hanawa & Chen, Yun-Ju (Kelly), 2003. "The Impact Of Bse On Japanese Retail Beef Market," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35233, Southern Agricultural Economics Association.
    4. James N. Trapp, 1986. "Investment and Disinvestment Principles with Nonconstant Prices and Varying Firm Size Applied to Beef-Breeding Herds," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(3), pages 691-703.
    5. Yair Mundlak & He Huang, 1996. "International Comparisons of Cattle Cycles," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 855-868.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aadland, David, 2004. "Cattle cycles, heterogeneous expectations and the age distribution of capital," Journal of Economic Dynamics and Control, Elsevier, vol. 28(10), pages 1977-2002, September.
    2. Aadland, David, 2002. "Cattle Cycles, Expectations And The Age Distribution Of Capital," 2002 Annual meeting, July 28-31, Long Beach, CA 19795, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Chavas, Jean-Paul, 2000. "On information and market dynamics: The case of the U.S. beef market," Journal of Economic Dynamics and Control, Elsevier, vol. 24(5-7), pages 833-853, June.
    4. Mathews, Kenneth H., Jr. & Short, Sara D., 2001. "The Beef Cow Replacement Decision," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 19(2), pages 1-21.
    5. David Aadland & DeeVon Bailey & S. Feng, "undated". "A theoretical and empirical investigation of the supply response in the U.S. beef-cattle industry," Working Papers 2000-12, Utah State University, Department of Economics.
    6. Xu, Yecheng & Zhang, Yaoqi & Chen, Jiquan & John, Ranjeet, 2019. "Livestock dynamics under changing economy and climate in Mongolia," Land Use Policy, Elsevier, vol. 88(C).
    7. David Aadland, "undated". "The economics of cattle supply," Working Papers 2000-11, Utah State University, Department of Economics.
    8. Riley, John Michael & Williams, Brian R., 2013. "Cow-Calf Industry Expansion on the Horizon? Market Signals vs. Outside Factors," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 143044, Southern Agricultural Economics Association.
    9. Mbaga, Msafiri Daudi & Coyle, Barry T., 2003. "Beef Supply Response Under Uncertainty: An Autoregressive Distributed Lag Model," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(3), pages 1-21, December.
    10. Rosen, Sherwin & Murphy, Kevin M & Scheinkman, Jose A, 1994. "Cattle Cycles," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 468-492, June.
    11. Webber, C. A. & Graham, J. D. & MacGregor, R. J., 1988. "A Regional Analysis of Direct Government Assistance Programs in Canada and their Impacts on the Beef and Hogs Sectors," Working Papers 244071, Agriculture and Agri-Food Canada.
    12. Ge, Wei & Kinnucan, Henry, 2016. "Dynamic analysis of the livestock inventory in Inner Mongolia," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252723, Southern Agricultural Economics Association.
    13. Cook, Billy & Biermacher, Jon T. & Childs, Dan, 2007. "PR - The Value Of Pregnancy Testing Spring-calving Beef Cows," 16th Congress, Cork, Ireland, July 15-20, 2007 345369, International Farm Management Association.
    14. Lynn Hunnicutt & David Aadland, 2002. "Market Power with Dynamic Invertory Constraints: The Bias in Standard Measures," Working Papers 2002-15, Utah State University, Department of Economics.
    15. Cady, David Walter, 1987. "Analysis of hedging strategies for southern Iowa stocker operations," ISU General Staff Papers 1987010108000017567, Iowa State University, Department of Economics.
    16. Zhao, Huan, 2011. "Four Market Studies for the Beef and Electric Power Industries," ISU General Staff Papers 201101010800001360, Iowa State University, Department of Economics.
    17. Gong, Shang-Chi, 1988. "The Taiwanese livestock and feedgrain markets and policies," ISU General Staff Papers 198801010800009845, Iowa State University, Department of Economics.
    18. Li, Yunhan & Shonkwiler, Scott, 2016. "A Dynamic Model of U. S. Beef Cow Inventories," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235385, Agricultural and Applied Economics Association.
    19. Vere, David T. & Griffith, Garry R. & Bootle, B.W., 1993. "Alternative Breeding Inventory Specifications In A Livestock Market Model," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 37(3), pages 1-24, December.
    20. Dorfman, Jeffrey H. & Park, Myung D., 2009. "Looking for Cattle and Hog Cycles through a Bayesian Window," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49278, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    Agricultural and Food Policy; Environmental Economics and Policy; International Relations/Trade;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:ags:saeana:46053. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/saeaaea.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.