The Economic Impacts of a Foot-and-Mouth Disease Outbreak: A Regional Analysis

By Pendell, Dustin L.; Leatherman, John et al. | Journal of Agricultural and Applied Economics, October 2007 | Go to article overview

The Economic Impacts of a Foot-and-Mouth Disease Outbreak: A Regional Analysis


Pendell, Dustin L., Leatherman, John, Schroeder, Ted C., Alward, Gregory S., Journal of Agricultural and Applied Economics


Contagious animal diseases like foot-and-mouth disease (FMD) are often referred to as economic diseases because of the magnitude of economic harm they can cause to producers and to local communities. This study demonstrates the local economic impact of a FMD outbreak in southwest Kansas. The expected economic impact of the disease hinges heavily on where the incidence of the disease occurs. Disease surveillance, management strategies, mitigation investment, and overall diligence clearly need to be much greater in concentrated cattle feeding and processing areas at large feeding operations in the region.

Key Words: foot-and-mouth disease, invasive species, livestock, regional analysis

JEL Classifications: Q11, Q13, R15

Concerns about invasive species and foreign animal diseases have escalated substantially in recent years. Terrorist attacks on the United States in September 2001 greatly increased awareness of vulnerability of U.S. agriculture to bioterrorism. In response to these concerns, President Bush signed into law the Public Health security and Bioterrorism Preparedness and Response Act of 2002. The purpose of this Act is to "To improve the ability of the United States to prevent, prepare for, and respond to bioterrorism and other public health emergencies" (107th Congress).

Discovery of an infected dairy cow with bovine spongiform encephalopathy (BSE) in the United States in December 2003 and the subsequent loss of world markets for U.S.produced beef demonstrate the economic impact animal health can have on the livestock and related industries. The BSE incident resulted in immediate closure of major U.S. beef export markets (Japan, Korea, Mexico, and Canada). The United States exported over one million metric tons of beef in 2003 compared with only 200,000 metric tons in 2004 after discovery of the BSE-infected animal in Washington State (USDA, FAS). Coffey et al. estimated that the U.S. beef industry losses resulting from export restrictions during 2004 ranged from $3.2 billion to $4.7 billion.

The United Kingdom experienced a severe foot-and-mouth disease (FMD) outbreak in 2001. On February 20, 2001 FMD was confirmed in Great Britain. Subsequent epidemiological analysis determined that at least 57 premises were infected by the time the first case was identified (Scudamore). By September 30, 2001 when the outbreak was eradicated, 221 days later, 2,026 cases of FMD had been confirmed; over six million animals were destroyed, and the disease spread to Ireland, France, and the Netherlands. Thompson et al. estimated losses from FMD in the UK at £5.8 to £6.3 billion (US$10.7 to $11.7 billion). This FMD outbreak in the United Kingdom demonstrates the need to understand probable economic impacts of a highly contagious disease to develop effective public policy.

The objective of this research is to determine the economic implications of a hypothetical FMD outbreak in a specific local region in southwest Kansas under three different disease introduction scenarios. These scenarios include disease introduction at a single cow-calf operation, introduction at a single medium-sized feedlot (feedlot with 10,000-20,000 head of cattle one-time feeding capacity), and introduction simultaneously at five large feedlots (feedlots with greater than 40,000 head one-time feeding capacity). The first two scenarios would be indicative of a likely small-scale outbreak (though there is some probability of the outbreak being large), whereas the latter scenario represents what could characterize a purposeful simultaneous introduction of the disease and would have a much greater probability of a larger outbreak. The simultaneous introduction into five large feedlots could ultimately result in larger consequences due to the number of cattle that would be destroyed and the number of animate (e.g., humans) and inanimate (e.g., vehicles) vectors entering a large feedlot on a daily basis.

An epidemiological disease-spread model is used to determine the probable spread of a hypothetical FMD outbreak in southwest Kansas, an area selected because of its relatively high concentration of large cattlefeeding operations as well as other livestock enterprises and a large beef-processing presence. …

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