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Animal Disease Outbreaks and Upstream Soybean Trade

Author

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  • Lwin, Wuit Yi
  • Schaefer, K. Aleks
Abstract
Animal disease outbreaks have been extremely disruptive to global livestock industries in recent years. In light of the modern integration of international supply chains, to what extent have these disruptions been experienced by upstream stakeholders? This research investigates the upstream impacts of global animal disease outbreaks in the international soybean market. We employ a two-step procedure to deduce the impacts of animal disease on upstream soybean trade. We first use a standard, econometric gravity model to empirically estimate the relationship between observed trade and livestock production patterns (accounting for each country’s economic masses and trade frictions). We then conduct a counterfactual analysis with our estimated gravity relationships to assess the value of lost soybean trade using a global repository of disease-specific animal mortality data. Our results indicate that between 2005–2020, animal disease outbreaks have cost the international soybean market approximately $5 billion in lost trade. The average exporter loses as much as 2% of its export potential each year. These losses are primarily attributable to cattle disease outbreaks in East Asia and South America. Foot-and-mouth disease alone has cost the soybean trade market approximately $4 billion in lost trade over our sample period.
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Suggested Citation

  • Lwin, Wuit Yi & Schaefer, K. Aleks, 2024. "Animal Disease Outbreaks and Upstream Soybean Trade," 2024 Annual Meeting, July 28-30, New Orleans, LA 343942, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea22:343942
    DOI: 10.22004/ag.econ.343942
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    References listed on IDEAS

    as
    1. Weidner, Martin & Zylkin, Thomas, 2021. "Bias and consistency in three-way gravity models," Journal of International Economics, Elsevier, vol. 132(C).
    2. Schaefer, K. Aleks & Scheitrum, Daniel & Nes, Kjersti, 2018. "International sourcing decisions in the wake of a food scandal," Food Policy, Elsevier, vol. 81(C), pages 48-57.
    3. Thompson, Jada M. & Pendell, Dustin L. & Boyer, Tim & Patyk, Kelly A. & Malladi, Sasidhar & Weaver, J. Todd, 2019. "Economic Impacts of Business Continuity on an Outbreak of Highly Pathogenic Avian Influenza in Minnesota Egg Laying Operations," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 51(2), pages 235-248, May.
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    5. Seitzinger, Ann Hillberg & Paarlberg, Philip L., 2016. "Regionalization of the 2014 and 2015 Highly Pathogenic Avian Influenza Outbreaks," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 31(2), pages 1-8.
    6. Kjersti Nes & K. Aleks Schaefer & Daniel P. Scheitrum, 2022. "Global Food Trade and the Costs of Non‐Adoption of Genetic Engineering," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(1), pages 70-91, January.
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    9. Santos Silva, J.M.C. & Tenreyro, Silvana, 2010. "On the existence of the maximum likelihood estimates in Poisson regression," Economics Letters, Elsevier, vol. 107(2), pages 310-312, May.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    International Relations/Trade; Livestock Production/Industries; Agricultural And Food Policy;
    All these keywords.

    JEL classification:

    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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