Animal health and price transmission along livestock supply chains.

Animal health diseases can severely affect the food supply chain by causing variations in prices and market demand. Price transmission analysis reveals in what ways price variations are transmitted along the supply chain, and how supply chains of substitute products and different regional markets are also affected. In perfect markets, a price variation would be completely and instantaneously transmitted across the different levels of the supply chain: producers, the processing industry, retailers and consumers. However, empirical studies show that food markets are often imperfect, with anomalies or asymmetries in price transmission and distortions in the distribution of market benefits. This means, for instance, that a price increase at the consumer level may not be transmitted from retailers to processors and producers; yet, on the other hand, price falls may rapidly affect the upstream supply chain. Market concentration and the consequent exertion of market power in key segments of the supply chain can explain price transmission asymmetries and their distributional effects, but other factors may also be involved, such as transaction costs, scale economies, and imperfect information. During the bovine spongiform encephalopathy (BSE) crisis, asymmetric price transmission in the beef supply chain and related meat markets determined distributional effects among sectors. After the spread of the BSE food scare, the fall in demand marginally affected the price paid to retailers, but producers and wholesalers suffered much more, in both price reductions and the time needed to recover to precrisis demand. Price transmission analysis investigates how animal health crises create different economic burdens for various types of stakeholder, and provides useful socioeconomic insights when used with other tools.

Les maladies animales peuvent avoir de graves répercussions sur la filière agroalimentaire en occasionnant une instabilité des prix et de la demande. L'analyse de la transmission des prix met en lumière la manière dont les variations de prix se transmettent tout au long de la chaîne d'approvisionnement et leurs conséquences sur les productions de substitution et sur les différents marchés régionaux. Dans un marché parfait, toute variation de prix se répercute de manière intégrale et instantanée à chaque niveau de la chaîne d'approvisionnement : producteurs, transformateurs, détaillants et consommateurs. Des études empiriques ont toutefois montré que les marchés de l'agroalimentaire sont souvent imparfaits, avec des anomalies ou des asymétries dans la transmission des prix ainsi que des distorsions dans la répartition des bénéfices commerciaux. Ainsi, par exemple, une hausse du prix payé par le consommateur ne se transmet pas nécessairement du détaillant aux transformateurs et aux producteurs, tandis qu'une baisse des prix affecte très rapidement la filière en amont. Si les asymétries de la transmission des prix et leur impact distributif peuvent s'expliquer par la concentration des marchés et par la puissance commerciale exercée par des segments clés de la chaîne d'approvisionnement, d'autres facteurs entrent également en jeu, tels les coûts de transaction, les économies d'échelle et les failles de l'information. Lors de la crise due à l'encéphalopathie spongiforme bovine (ESB), l'asymétrie de la transmission des prix au sein de la filière viande bovine et des marchés connexes de la viande a eu pour conséquence un impact distributif parmi les secteurs concernés. Suite à la panique causée par l'ESB, la chute de la demande a eu des répercussions marginales sur le prix payé aux détaillants, tandis que les producteurs et les grossistes ont été beaucoup plus affectés, non seulement par la chute des prix mais aussi par le temps qu'il leur a fallu attendre avant que la demande retrouve son niveau d'avant la crise. L'analyse de la transmission des prix permet de comprendre la diversité des répercussions économiques d'une crise de santé animale en fonction des parties prenantes concernées et fournit un éclairage socio-économique précieux lorsqu'elle est utilisée parallèlement à d'autres outils.

Las enfermedades de los animales pueden resultar muy perjudiciales para la cadena de suministro alimentario por las oscilaciones que provocan en los precios y la demanda del mercado. El análisis de la transmisión de precios revela de qué manera las variaciones de precios se transmiten a lo largo de la cadena de suministro y cómo afectan también a las cadenas de suministro de productos sustitutorios y a mercados regionales diferentes. En un mercado perfecto, la variación de un precio se transmitiría de forma completa e instantánea a los distintos eslabones de la cadena de suministro: productores, industria transformadora, minoristas y consumidores. Sin embargo, los estudios empíricos demuestran que los mercados agroalimentarios suelen ser imperfectos y presentar anomalías o asimetrías en la transmisión de los precios, así como distorsiones en la distribución de los beneficios comerciales. Ello significa, por ejemplo, que un aumento de precio a nivel del consumidor puede no transmitirse de los minoristas a los transformadores y productores. Por otro lado, en cambio, las caídas de precios pueden afectar rápidamente a los primeros eslabones de la cadena de suministro. La concentración del mercado y el consiguiente ejercicio del poder de mercado en segmentos clave de la cadena de suministro pueden explicar las asimetrías de la transmisión de precios y sus efectos en la distribución, aunque también es posible que intervengan otros factores, como los costos de transacción, las economías de escala o las imperfecciones de la información. Durante la crisis causada por la encefalopatía espongiforme bovina (EEB), la transmisión asimétrica de los precios en la cadena de suministro de carne vacuna y en los mercados cárnicos conexos trajo consigo una serie de efectos distributivos entre los sectores. Cuando cundió la alarma causada por la EEB, la caída de la demanda afectó solo de manera marginal al precio pagado a los minoristas, pero en cambio productores y mayoristas sufrieron mucho más, tanto por la caída de precios como por el tiempo necesario para que la demanda recuperara los niveles previos a la crisis. El análisis de la transmisión de precios estudia cómo las crisis zoosanitarias imponen una carga económica variable a las distintas partes interesadas y proporciona información socioeconómica de utilidad cuando se emplea en combinación con otras herramientas.

Evidence for more cost-effective surveillance options for bovine spongiform encephalopathy (BSE) and scrapie in Great Britain.

Transmissible spongiform encephalopathies (TSEs) are an important public health concern. Since the emergence of bovine spongiform encephalopathy (BSE) during the 1980s and its link with human Creutzfeldt-Jakob disease, active surveillance has been a key element of the European Union's TSE control strategy. Success of this strategy means that now, very few cases are detected compared with the number of animals tested. Refining surveillance strategies would enable resources to be redirected towards other public health priorities. Cost-effectiveness analysis was performed on several alternative strategies involving reducing the number of animals tested for BSE and scrapie in Great Britain and, for scrapie, varying the ratio of sheep sampled in the abattoir to fallen stock (which died on the farm). The most cost-effective strategy modelled for BSE involved reducing the proportion of fallen stock tested from 100% to 75%, producing a cost saving of ca GBP 700,000 per annum. If 50% of fallen stock were tested, a saving of ca GBP 1.4 million per annum could be achieved. However, these reductions are predicted to increase the period before surveillance can detect an outbreak. For scrapie, reducing the proportion of abattoir samples was the most cost-effective strategy modelled, with limited impact on surveillance effectiveness.

Valorization of rendering industry wastes and co-products for industrial chemicals, materials and energy: review.

Over the past decades, strong global demand for industrial chemicals, raw materials and energy has been driven by rapid industrialization and population growth across the world. In this context, long-term environmental sustainability demands the development of sustainable strategies of resource utilization. The agricultural sector is a major source of underutilized or low-value streams that accompany the production of food and other biomass commodities. Animal agriculture in particular constitutes a substantial portion of the overall agricultural sector, with wastes being generated along the supply chain of slaughtering, handling, catering and rendering. The recent emergence of bovine spongiform encephalopathy (BSE) resulted in the elimination of most of the traditional uses of rendered animal meals such as blood meal, meat and bone meal (MBM) as animal feed with significant economic losses for the entire sector. The focus of this review is on the valorization progress achieved on converting protein feedstock into bio-based plastics, flocculants, surfactants and adhesives. The utilization of other rendering streams such as fat and ash rich biomass for the production of renewable fuels, solvents, drop-in chemicals, minerals and fertilizers is also critically reviewed.

Economic analysis of animal disease outbreaks--BSE and Bluetongue disease as examples.

Although there is a long tradition of research on animal disease control, economic evaluation of control measures is rather limited in veterinary medicine. This may, on the one hand, be due to the different types of costs and refunds and the different people and organizations bearing them, such as animal holders, county, region, state or European Union, but it may also be due to the fact that economic analyses are both complex and time consuming. Only recently attention has turned towards economic analysis in animal disease control. Examples include situations, when decisions between different control measures must be taken, especially if alternatives to culling or compulsory vaccination are under discussion. To determine an optimal combination of control measures (strategy), a cost-benefit analysis should be performed. It is not necessary to take decisions only based on the financial impact, but it becomes possible to take economic aspects into account. To this end, the costs caused by the animal disease and the adopted control measures must be assessed. This article presents a brief overview of the methodological approaches used to retrospectively analyse the economic impact of two particular relevant diseases in Germany in the last few years: Blue-tongue disease (BT) and Bovine Spongiform Encephalopathy (BSE).

Direct costs of bovine spongiform encephalopathy control measures in Germany.

On 26 November 2000, the first autochthonous case of bovine spongiform encephalopathy (BSE) was detected in Germany. Since then, a total of 413 BSE cases have been confirmed, resulting in the culling and destruction of 17 313 heads of cattle. In view of the possible risks for human and animal health, Germany has adopted EU regulations along with some additional requirements concerning active surveillance and response measures after detecting a BSE-positive animal. In this study, we used a stochastic model to estimate the costs incurred by the ensuing legislative amendments responding to BSE between November 2000 and December 2010. The total costs were estimated to range between 1847 and 2094 million Euros. They peaked in 2001 (about 394 million Euros) and declined since. About 54% of the costs (approximately 1000 million Euros) were incurred by the extension of the feed ban for animal protein to all farmed livestock. Active surveillance accounted for 21% (405 million Euros), the incineration of animal protein for 13% (249 million Euros) and the removal of specified risk material for 11% (225 million Euros). Only 1% of the costs was related to response measures after detecting a BSE-positive animal, including indemnity payments for culled cattle and confiscated carcasses at the slaughterhouse.

Differential effects of negative publicity on beef consumption according to household characteristics in South Korea.

This paper examines how South Korean households responded to an unprecedented boycott campaign against US beef from spring to summer of 2008, and investigates differential responses in relation to households' characteristics. It was found that beef consumption reduced by 4.8% immediately after the so-called candle-light demonstration. Instead, pork and chicken consumption increased by 17.2% and 16.6%, respectively. This confirms a substitution effect due to the negative publicity concerning US beef. It was also found that the negative publicity effect was transitory and the reactions of consumers were not uniform; they differed depending on their socio-economic characteristics. The econometric model revealed that younger, less-educated, and/or lower-income households were more susceptible to the negative publicity, and reduced their beef consumption more than other households.

The economic impacts of chronic wasting disease and bovine spongiform encephalopathy in alberta and the rest of Canada.

Input-output analysis was used to calculate the economic impacts from potential prion diseases outbreaks in Alberta and the rest of Canada. Both chronic wasting disease (CWD) and bovine spongiform encephalopathy (BSE) have the capacity not only to affect the farmed cervid and cattle industries, but also to impact all industries with direct and indirect links to these sectors. Cervid sector shocks yield small spillover effects on the economies of Alberta as well as that of all of Canada. In contrast, the cattle sector generates larger multiplier effects in both specifically Alberta region and all of Canada. The industries that consistently experience the largest impacts from prion disease outbreaks in both Alberta and remainder of Canada economic regions are agricultural sectors, mining and energy sectors, and industries dedicated to trade, transportation, and warehousing.

A pilot study of the impact of bovine spongiform encephalopathy on the futures of rural youth and Canadian farming.

There is an abundance of literature examining the economic impact of Canada's bovine spongiform encephalopathy (BSE) outbreak, but few studies examined the impact of such a crisis on health at the individual, family, or community levels. In particular, rural youth represent an under-researched population despite being at risk for a unique set of social and health concerns. In this pilot study, our objectives were to explore how rural youth responded to Canada's BSE crisis and how they perceived themselves, their families, and their communities to have been impacted. Seven youths (n = 7), recruited from within a university setting using a snowball sampling method, were interviewed. They represent a segment of rural, agriculturally based youth who are resilient due to good parental support. Although they reported high stress in their families during the immediate crisis in 2003, they did not report lasting high levels of stress or negative health effects due to BSE. They did report a decline in rural community health, identifying a reduction in community activities and in the participation of families in community activities. Participants identified elements that discourage youth from pursuing farming as a career and expressed concern for the future of family farming. The results are discussed in terms of the ability of agriculturally based youth to make the transition to adulthood. The implications have importance for future research and policy that addresses the structural supports for choice making, the long-term success for rural youth in transitioning to adult status, and the future of agriculture.

[Protection from BSE : Efforts, measures, success, and costs]. / Schutz vor BSE : Anstrengungen, Massnahmen, Erfolge und Kosten.

By the mid 1980s, bovine spongiform encephalopathy (BSE) emerged in the United Kingdom (UK) and reached its peak in the early 1990s with up to 37,000 cases. In the year 2000, BSE was diagnosed for the first time for a cow born in Germany. Since then, 413 cases of BSE have been detected. About 10 years after the first BSE cases were detected, variant Creutzfeldt-Jakob disease (vCJD), a new variant of Creutzfeldt-Jakob disease (CJD), was described in the UK. Legal measures for protection from BSE are described. The number of cases of vCJD and the development of the BSE situation in Germany and Bavaria until 2009 are presented.

Surviving bovine spongiform encephalopathy (BSE): farm women's discussion of the effects of BSE on food provisioning practices.

The economic vulnerability of beef and other farm families following the bovine spongiform encephalopathy (BSE) crisis in Canada poses a risk to their household food provisioning practices. The purpose of this study was to examine the effects of BSE since 2003 on the food provisioning practices of beef and other farm families in three Canadian provinces. Semi-structured, face-to-face, in-depth interviews were conducted with 22 farm women (6 in Alberta, 6 in Ontario, and 10 in Nova Scotia) that focused on their food provisioning strategies. Women also provided basic sociodemographic information about their households. While the farm women interviewed revealed that BSE exerted a financial impact on their farm operation, it did not prevent them from eating foods that they valued as wholesome, safe, and healthy for their family. There was no hesitancy in consuming beef from Canadian sources; in fact, beef consumption often increased because of decisions to keep slaughtered cows for home consumption rather than accept low cull cow prices. Other food provisioning strategies reported included seeking out alternative markets, purchasing food on credit, and directing off-farm income to purchase food.

Cow-calf producers need to blame exchange rates, not bovine spongiform encephalopathy, for lost wealth.

Several studies examined the impacts of the bovine spongiform encephalopathy (BSE) crisis on the Canadian agricultural sector. However, few investigations determined the on-farm financial repercussions arising from the crisis. This study examined impacts at farm level attributed to the BSE crisis. Cash flow and hedonic price models were used to examine changes in farm wealth for the years 2002 through 2007. While BSE received substantial media coverage, little attention was given to exchange rates and land values. Data demonstrated that exchange-rate fluctuations exerted a much greater impact on producer wealth than did the BSE crisis. Both farm equity and land values temporarily dipped following the BSE crisis but have since followed their previous trend. If the United States had not closed its borders to Canadian beef and cattle exports, producers would have an additional 0.65% growth in wealth. However, had exchange rates remained constant, farmers would have an additional 10.75% increase in equity. Consequently, the BSE crisis produced a smaller impact on farmer wealth than factors that received less media attention.

Canadian media representations of mad cow disease.

A Canadian case of bovine spongiform encephalopathy (BSE) or "mad cow disease" was confirmed in May, 2003. An in-depth content analysis of newspaper articles was conducted to understand the portrayal of BSE and variant Creutzfeldt-Jakob disease (vCJD) in the Canadian media. Articles in the "first 10 days" following the initial discovery of a cow with BSE in Canada on May 20, 2003, were examined based on the premise that these initial stories provide the major frames that dominate news media reporting of the same issue over time and multiple occurrences. Subsequent confirmed Canadian cases were similarly analyzed to determine if coverage changed in these later media articles. The results include a prominence of economic articles, de-emphasis of health aspects, and anchoring the Canadian outbreak to that of Britain's crisis. The variation in media representations between those in Canada and those documented in Britain are explored in this study.

The psychosocial and socioeconomic consequences of bovine spongiform encephalopathy (BSE): a community impact study.

The detection of the first indigenous case of bovine spongiform encephalopathy (BSE) in Canada on May 20, 2003, had significant consequences for the livestock industry. As a result, borders were closed by several trade partners, particularly the United States. The outbreak led to direct and indirect economic impacts to the "cattle" industry exceeding $6 billion. As a consequence of a number of risk management interventions implemented by the Canadian Food Inspection Agency (CFIA) and provincial agencies, the BSE outbreak appears to have been largely contained. The initial results from our study of the socioeconomic and psychosocial impact of BSE on the health and well-being of rural and farm families living in Canada, a topic that remains largely unexamined are presented. Our analysis of the outbreak raises a number of questions concerning the resulting consequences for farmers, their families, and their communities, including considerations from a social determinants' of health perspective. In particular, our preliminary findings reveal that 5 years following the detection of the first indigenous case of BSE in Canada, ongoing uncertainty and stress resulting from unrecoverable financial losses continue to weigh heavily on the health and well-being of farmers, their families, and survival and sustainability of agricultural communities.

The price of the precautionary principle: cost-effectiveness of BSE intervention strategies in The Netherlands.

Since 1996, bovine spongiform encephalopathy (BSE) in cattle has been linked to a new variant of Creutzfeldt-Jakob disease (vCJD), a fatal brain disease in man. This paper assessed the cost-effectiveness of BSE control strategies instituted by the European Commission. In a Monte Carlo simulation model, a non-intervention baseline scenario was compared to three intervention strategies: removal of specified risk materials from slaughter animals, post-mortem testing for BSE and the culling of feed and age cohorts of BSE cases. The food risk in the baseline scenario ranged from 16.98 lost life years in 2002 to 2.69 lost life years in 2005. Removing specified risk materials removal practices, post-mortem testing and post-mortem testing plus cohort culling reduced this risk with 93%, 82.7% and 83.1%. The estimated cost-effectiveness of all BSE measures in The Netherlands ranged from 4.3 million euros per life year saved in 2002 to 17.7 million euros in 2005. It was discussed that the cost-effectiveness of BSE control strategies will further deviate from regular health economics thresholds as BSE prevalence and incidence declines.

Effect of carcass price fluctuations on genetic and economic evaluation of carcass traits in Japanese Black cattle.

The objectives of this study were 1) to investigate the effect of changes in carcass market prices due to bovine spongiform encephalopathy (BSE) occurrences on estimates of genetic parameters and economic weights for carcass traits; and 2) to compare direct and indirect approaches for prediction of genetic merit of Japanese Black cattle for profitability of their progeny. The direct approach utilized estimated breeding values of carcass prices, whereas in the indirect approach, selection indices were constructed as products of economic weights and breeding values of component traits. Data were composed of 80,191 carcass records divided into 5 periods based on changes in carcass prices as a result of occurrences of BSE in Japan and the United States. The periods ranged from a period before occurrence of BSE in Japan to a period of beef import restrictions and a rise in prices. Carcass traits analyzed included HCW, LM area, rib thickness, subcutaneous fat thickness, and marbling score (MS). Price traits included carcass unit price and carcass sale price. Estimates of heritability for price traits were moderate (0.32 to 0.46) and slightly sensitive to changes in carcass market prices. Genetic correlations of HCW and LM area with price traits increased and that between MS and carcass sale price decreased with period, whereas estimates of genetic correlation between MS and carcass unit price were high in all periods (0.96 to 0.98). Economic weights for carcass traits varied with periods because carcass prices were highly sensitive to economic importance of traits. Nevertheless, correlations between within-period breeding values for price traits estimated using direct and indirect approaches were high (0.92 to 0.99). This result indicates that selection realized by direct and indirect approaches will provide very similar results. A comparison among within-approach breeding values estimated in different periods showed that the largest differences in breeding values of sires for price traits were between the periods after occurrences of BSE in Japan and in the United States. Economic effects of BSE occurrences influenced the importance of carcass traits and economic merits of price traits through a change of carcass prices from period to period, irrespective of the approach taken in determining the genetic merit of breeding animals for profitability of their progeny.

Optimal tracking and testing of U.S. and Canadian herds for BSE: a value-of-information (VOI) approach.

The U.S. Department of Agriculture (USDA) tests a subset of cattle slaughtered in the United States for bovine spongiform encephalitis (BSE). Knowing the origin of cattle (U.S. vs. Canadian) at testing could enable new testing or surveillance policies based on the origin of cattle testing positive. For example, if a Canadian cow tests positive for BSE, while no U.S. origin cattle do, the United States could subject Canadian cattle to more stringent testing. This article illustrates the application of a value-of-information (VOI) framework to quantify and compare potential economic costs to the United States of implementing tracking cattle origins to the costs of not doing so. The potential economic value of information from a tracking program is estimated to exceed its costs by more than five-fold if such information can reduce future losses in export and domestic markets and reduce future testing costs required to reassure or win back customers. Sensitivity analyses indicate that this conclusion is somewhat robust to many technical, scientific, and market uncertainties, including the current prevalence of BSE in the United States and/or Canada and the likely reactions of consumers to possible future discoveries of BSE in the United States and/or Canada. Indeed, the potential value of tracking information is great enough to justify locating and tracking Canadian cattle already in the United States when this can be done for a reasonable cost. If aggressive tracking and testing can win back lost exports, then the VOI of a tracking program may increase to over half a billion dollars per year.

A new method for assessing the impact of emerging infections on global trade.

In this paper, the authors describe a new method for assessing the impact of emerging infections on global trade flows. When one compares notifications to the World Trade Organization (WTO) of the emergency measures taken to control certain animal and plant diseases with the trade values of certain products from the United Nation's Commodity Trade Statistics Database (Comtrade) (identified through the World Customs Organization's harmonised system of tariff product codes [HS]), it is possible to estimate the extent to which trade has been diverted from the affected economies. The authors study in detail the example of bovine spongiform encephalopathy (BSE). When member countries of the WTO change their import policies towards the goods of a trading partner, as the result of an emerging disease such as BSE, they must file notifications of such changes through the Sanitary and Phytosanitary Committee of the WTO. To quantify the impact of BSE on trade, the authors compared these notifications against Comtrade statistics, using the HS 1996 tariff code variable. (The HS 1996 tariff codes allow the tracking and recording of the volumes of exports and imports, in quantity and value, between any two member countries between 1998 and 2000 in the database.) The authors then used this linked dataset to describe the dollar impact of the BSE-related notifications filed in 2000 on the trade flow of imports. The results of this study suggest that economies affected by BSE notifications saw a decline of US$5.6 billion from hypothetical projections in designated products. At the same time, unaffected economies saw an increase of US$1.5 billion from hypothetical projections in the same products. Thus, it may be concluded that import restrictions to control the spread of emergent spongiform encephalopathy infection had a significant effect on trade flows. These results also emphasise the interconnectedness of global trade: trade restrictions for some economies may enhance trade opportunities for others. Further studies using these methods are warranted.