Domestic and Trade Impacts of Foot and Mouth Disease on the Australian Beef Industry

Australia is the sixth largest producer of beef and the second largest exporter of beef. Average beef exports from Australia are approximately 65% of the total amount of beef produced or about 1.3 million metric tonnes. Australia is particularly vulnerable to diseases that are not endemic to the country and could close or disrupt its export markets for beef. In this study we construct a bioeconomic optimization model of the Australian beef industry that captures production and consumption decisions, domestically and internationally, and the impacts on the beef industry of a potentially catastrophic disease, foot and mouth disease (FMD). The study reports localized to large scale outbreaks and suggest that changes in economic surplus due to FMD range from a positive net gain of $309 million to a net loss of $18.3 billion, with the impact on producers and consumers varying depending on the degree of outbreak and control levels. 1 PRT Consulting. Armidale, NSW. Australia. 2350., and the University of New England, Armidale, NSW. 2350. 2 Professor, School of Economic Sciences, Washington State University, Pullman, WA U.S.A. 991646210. 3 Former graduate student, School of Economic Sciences, Washington State University, Pullman, WA. U.S.A. 99164-6210. * Research supported by the Department of Agriculture and Food Western Australia and the United States Department of Agriculture PREISM program.