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The Impact of Influenza on Beef Markets

07 May 2009
Ohio State University

US - Even the name has huge implications. Early references to the swine flu have left the pork industry reeling from a variety of impacts. Recognition that this new strain of flu is a combination of swine, avian and human components has led most officials to begin using the name influenza A (H1N1).

Nevertheless, pork markets have been hit by consumer fears and some trade bans despite the fact that there is no risk of flu from pork consumption, writes Derrell S. Peel, OSU Extension Livestock Marketing Specialist. In most cases, the impacts are driven by lack of information, sometimes by misinformation, and occasionally by the irresistible temptation to use the situation for political ends. It highlights the never-ending need for education to make sure consumers and policymakers use science rather than emotion to make decisions. The beef industry has been through this same wringer with BSE.

The impact on beef markets is more indirect in both domestic and international markets. Consumers that are afraid of pork might temporarily favor beef. Much more probable is the likelihood that all meats will be impacted negatively by reduced travel and economic impacts in global markets. There is a distinct possibility that the flu situation may further weaken the U.S. economy and/or delay recovery. Mexico is a major market for both pork and beef from the U.S. and the virtual shutdown in Mexico is likely to significantly aggravate the already floundering Mexican economy.

Some countries have used the situation to impose bans on U.S. pork and, in some cases, other meats as well. Even without direct impacts like trade bans, the macroeconomic impact in many other countries could be significant. It will be difficult or perhaps impossible to ultimately determine the impact of the flu outbreak since we have no way of knowing how things would have happened without the flu.

It is not easy to measure the impacts of influenza on the beef industry. Even quantity of beef consumption or trade may not measure the impact. For example, in Mexico the dramatic reduction in restaurant consumption in favor of at-home consumption has implications for the type and quality of beef consumed as well as the quantity. In the case of beef, the impact of influenza may be a combination of positive and negative factors but there seems little doubt that the net impact is negative. At this point there is no way to anticipate just how bad the flu situation will get and the economic impact on beef markets is even more uncertain.

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