A recent USDA study finds that there is no significant market damage from fears of BSE. In short they found no reduction in consumers buying beef after announcements of discoveries of mad cows.
What Did the Study Find?
Among the three markets examined—fresh beef, frozen beef, and frankfurters—fresh beef pro-vided the strongest case for an impact of the BSE announcements. There is no evidence that the Canadian announcement altered purchase patterns of fresh beef, but purchases during the first 2 weeks after the Washington State announcement were unusually low. Frozen beef purchases fell only for the first week after the Washington State announcement. Frankfurter purchases dropped in the second week following each announcement, but purchases of no-beef frankfurters also fell, suggesting that unrelated events were more likely responsible for the decline.
The magnitude of responses in the market was difficult to estimate precisely, but the duration was clear: within 2 weeks, consumers were behaving exactly as they had before the announcements. For each of the three commodities, the variation in weekly purchases is large, with seasonal purchasing peaks 2-10 times higher than seasonal troughs. However, about three-quarters of this variation can be explained by trend and seasonality, and, to a lesser extent, retail prices.
Having explained most of the variation in weekly purchases with these factors, large and persistent market impacts related to BSE announcements could be easily detected. In fact, such effects were not detected.
-USDA Economic Research Report No. (ERR-34)
“Did BSE Announcements Reduce Beef Purchases?”
By Fred Kuchler and Abebayehu Tegene
45 pp, December 2006
One of the often touted reasons for pushing the USDA’s proposed National Animal Identification System (NAIS) is that the livestock industry needs to be protected from consumers losing confidence. The USDA claims that by having every animal in the United States ID and tracked they will be able to pinpoint disease within 48 hours thus protecting producers from loss of sales due to consumer fears. But, the USDA’s own study team has shown that this is not necessary so now we can dispense with NAIS and save $100,000,000 per year of our tax money from going to the USDA for yet one more unnecessary corporate welfare and farm subsidy program.
Of course, if consumers were buying from local farmers then they would not need to have all this animal ID, premises ID and tracking. Bureaucrats would lose their jobs. Government fiefdoms would be diminished. RFID companies would dry up and die like cancer without the government mandated markets for their products. Big ag would be forced to compete fair and square without government subsidies.
Have you left your comments on the 2007 Farm Bill yet? Don’t be part of the national herd - be heard!
In government not only does the right hand not know what the left hand is doing, it is often actually trying to chop off the left hand. -WJ
Hat tip: Amy
