Project Details


The food supply chain that extends from farm to folk faces numerous food safety challenges, including naturally-occurring bacterial pathogen contaminations, intentional and unintentional animal disease outbreaks, and even possible terrorist attacks. Food scare events may have significant socio-economic consequences. According to the Center for Disease Control (CDC), food-borne illness sickens 76 million Americans, causes 325,000 hospitalizations and thousands of deaths, and costs $44 billion annually. In addition, market responses, including changes in food consumption, the market value of food companies, and futures prices of agricultural commodities, can generate even greater economic loss. While a market response to a scare event may start at one particular stage in the food supply chain, it can easily extend upstream and/or downstream in the food supply chain. A market response can also readily spread to economic sectors outside of the food industry. Suppose an outbreak of foot-and-mouth (FMD) disease is detected and confirmed in a cattle feedlot. Changes in meat consumption are likely as slaughter of infected and contact animals causes supply distortions; consumers may also change their preference for meat consumption. Traders in futures markets exposed to subsequent media coverage and government announcements of such outbreaks will react accordingly, causing abnormal changes of feed cattle and feed cattle futures. Meat companies will react to this event as well. Given the vertical (across different stages of a food supply chain) and horizontal (across various industries) nature of market response to food scare events, a systematic, thorough investigation of the market impacts of such events is warranted. This project will investigate market responses to food scare events over a full range, focusing on the size and duration of these responses. In particular, this project will examine asymmetric impacts between heterogeneous economic agents (e.g. firms and consumers), across different stages of a food supply chain, and between different industries, for different types of food scare events. Research results from this systematic and thorough investigation will inform policy makers in government, industry, and companies on likely market responses to these events, making them better prepared to respond to and manage these adverse events. The proposed research accords with the mission of the NJAES as it identifies current and future challenges on food safety and quantifies the subsequent economic consequences. It also provide important information to meet the national goals for agricultural in providing 'a safe and secure food and fiber system' and enhancing 'quality of life for Americans'.
Effective start/end date12/1/1011/30/15


  • National Institute of Food and Agriculture (National Institute of Food and Agriculture (NIFA))


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