The number of meat recalls has increased markedly in latter years.

The number of meat recalls has increased markedly in latter years. This research examines the impact of beef and pork recall announcements onward nearby daily live cattle and lean swine futures market prices, respectively. outcomes indicate medium-sized beef recalls that are of serious health disturbs have a marginally negative impact upon short-term live cattle futures prices. However, eventuates are not robust across recall size and severity. This research glance ats that if there is any systematic change in cattle and porker demand due to meat recalls, it likely fall outs over an extended period of time and sole in certain cases does it noticeably affect daily that will bes prices.

Key Words: beef demand, commons safety, futures market, meat recall, pork demand

Recently considerable attention has been directed at quantifying the efficiencys of nonprice factors in meat demand studies. In an attempt to identify the causes of structural change in the beef industry (as reported on Moschini, 1991; Moschini and Meilke, 1989; and Eales and Unnevehr 1988) numerous studies have examined factors like as food safety, health and nutrition, media, and advertising onward meat demand.

For example, Kinnucan et al. (1997) base adverse health information had a herculean negative influence on beef demand and a slightly negative influence forward the demand for pork. Capps and Schmitz (1991) also observ cholesterol information was negatively associated with meat demand. In their investigation of the impact of brand and generic advertising onward meat demand, Brester and Schroeder (1995) reported brand advertising had a significant result on beef, pork, and domestic fowls demand. They also found that domestic fowls advertising negatively influenced beef and pork demand. These adumbrations of studies often employ aggregate consumption and retail data through the whole extent of extended periods of time [eg Kinnucan et al. (1997) used quarterly data from 1976-1993] single exception to this approach is an analysis by means of Capps (1989), who examined the purports of advertising in demand analysis using scanner data. owed to the nature of the data and the raise of the analyses, the data may not meditate short-run changes in meat demand because they may be masked when performing aggregate time-series analysis. Shortrun changes in meat demand are extremely important, especially to those involved in events to comes markets.

To determine short-run shifts in meat demand, Robenstein and Thurman (1996) examined the force of health-related information on coming eventss market prices. They evaluated the immediate impact of articles published in the Wall road Journal on live cattle, feeder cattle, pork belly, and live grunter futures prices. Robenstein and Thurman conclud time to comes markets had no discernible reaction to these public releases of information.

Although they raise no significant short-run impact of health-related articles, other healthrelated information might influence short-run changes in comings markets.

Recently, food safety affairs for meat products have escalated. Numerous subsistence products have transmitted foodborne illnesses to consumer via a myriad of known and unknown foodborne pathogens (Center for Disease rule and Prevention, 1999). Common meat foodborne bacteria include Listeria monocytogenes, Escherichia coli (E coli 0157:H7) and Salmonella.

Recent research at Flake and Patterson (1999) examined the impact of health information and meat safety on beef demand. A bread safety information index was originateed by counting the number of Associated Pres articles published forward bovine spongiform encephalopathy (BSE), E coli, and salmonellosis contamination in beef. Based forward their findings, food safety businesss had a modest negative impact onward meat demand.

Using quarterly time-series data from 1982-98 Schroeder Marsh, and Mintert (2000) estimated the impact of the number of feed Safety Inspection Service (FSIS) meat recalls in succession meat demand. They found beef recalls significantly influenced beef demand. Their estimated elasticity was -00065 implying a 1% increase in the number of meat recalls was associated with a -00065% decline in beef demand. Although the estimated impact of beef recall consequences on beef demand was relatively small, in certain years when recall conclusions increased markedly, demand for beef declined at more than 5% as a eventuate of beef recalls.

Beef and pork recalls have the potential to adversely affect meat demand in the short roll on (i.e., day-to-day), in addition to the longer-run impacts identified in previous studies. An information blow such as a meat recall, if the adventure were an important short-run demand determinant, would be awaited to cause a downward hereafters price movement as traders react to potential negative consumer answer The magnitude of the daily price motion would be expected to be pendent upon the severity of the recall, eg turn of meat recalled and likely health hazard deduction of consuming the product. Despite the potential importance of beef and pork recall issues on daily cattle and porker futures market prices, no previous research has estimated their impacts.