The Impact of Foot and Mouth Disease Outbreaks in Taiwan and South Korea on the Red Meat Industries in Canada and the United States

Abstract

In addition to trade liberalization, other factors have contributed to the strong growth of red meat production in Canada since the end of the 1980s. In particular, the outbreaks of foot and mouth disease (FMD) in Taiwan and in South Korea eliminated two competitors in the Japanese market. This reduction in supply caused an increase in the price of hogs in the United States and Canada of 2.5% and 3% respectively during the 1997 to 2007 period. The higher price stimulated Canadian production by an average of 5%, and by 2% in the United States. Annual agricultural farm receipts from the hog market were greater by an average of $CD 276 million (9%) for a grand total of $CD 3 billion over the 11 years. Moreover, the value added in the red meat processing industry was on average $CD 158 million higher (5%) for a cumulative total of $CD 1.7 billion. Finally, the value of exports of the red meat supply chain is on average $CD 239 million higher (4.4%) for a grand total of $CD 2.6 billion during these 11 years.