Hidden impacts of FMD

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Outbreaks of foot and mouth disease (FMD) result in a range of direct and indirect costs, and public opinion can play a significant role in response and outcomes. Those were key messages as Sebastian Heath, VetMB, PhD, branch chief of program development with the Federal Emergency Management Agency kicked off this week’s FMD Symposium in Louisville, Ky. The symposium, focusing on FMD preparedness, took place in conjunction with the National Institute for Animal Agriculture’s annual conference.

For his presentation, Heath drew upon his experience with several FMD outbreaks around the world. He recently published a 10-year retrospective on the 2002 FMD outbreak in the United Kingdom documenting short- and long-term impacts on rural communities.

If there were an outbreak in the United States, Heath says, we would recover and return to FMD status, but long-term effects in affected areas would be significant. People tend to focus, he says, on immediate costs associated with culled animals, but the impacts reach much further. Heath outlined four types of costs associated with FMD outbreaks;

  1. Transaction costs – These are the direct costs or additional costs of doing business in an outbreak, such as federal compensation for culled animals and interest on loans for recovery. In the UK outbreak, direct costs totaled around $2.4 billion.
  2. Lost revenue – These are indirect costs such as revenue not earned on depopulated herds, affects of quarantines on livestock species not affected by FMD and non-agricultural impacts such as loss of tourism.
  3. Marginal costs – Following an outbreak, new production costs kick in for producers and the industry overall. These could include new requirements for testing or record-keeping. Heath notes the surveillance costs for BSE in the United States as an example.
  4. Opportunity costs – These costs of choosing one option over another could be positive or negative. During the UK outbreak, for example, the government paid about $263 million less in export subsidies in 2002 than in 2001, about equal with the lost trade revenue. For years after the outbreak Heath says, waste management companies were doing lucrative business managing runoff and seepage from the sites where thousands of culled animals were buried. Someone was making money from the outbreak, it just wasn’t farmers. Eventually, some of the burial sites, which formerly were in agricultural production, became National Trust land for recreation and wildlife habitat.

Heath outlined an analysis USDA conducted based on a model of an FMD outbreak on 60 farms in a single U.S. rural county. Direct costs totaled $1.4 million per week, with 750 personnel involved in emergency response. The county would lose $6.4 million per week in tax revenue. Seven hundred food-manufacturing jobs would disappear along with 1,400 retail jobs, 1,100 in hospitality and 1,200 in health and social services.

Public opinion relating to environmental issues, animal welfare, food safety, economics and technology could affect decisions during an outbreak, Heath says. If a feedyard or ranch is emptied during an outbreak, would the public resist re-stocking and push for alternative land use? Unlike disease such as BSE, FMD poses no danger to humans. Would the public support killing animals to prevent the disease from spreading to other animals? Would people skeptical of biotechnology, some still believing vaccines cause autism, accept mass vaccination against FMD in food animals? The answers depend on messages the industry prepares in response to a crisis.

Heath does not expect global eradication of FMD in the near term, but more regions are achieving FMD-free status. And the FMD status of countries can be far-reaching. Heath offers these examples:

  • Taiwan historically has imported U.S. soy meal for pig feed. When FMD broke out in Taiwan, our exports of soy dropped off dramatically and never fully recovered, remaining 11 percent lower than pre-outbreak levels.
  • In contrast, U.S. exports of feed grains to Syria tripled from 1998 to 2002, after the country reached FMD-free status.
  • Globally, a majority of cattle and swine are in FMD-endemic countries, but the majority of our feed exports are to FMD-free countries. That’s where the demand is.

Over the next week, we’ll summarize more presentations from the FMD symposium, focusing on preparedness and response strategies.


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