The Impacts of Foot and Mouth Disease Outbreaks on the Brazilian Meat Market

This study uses unrestricted vector autoregression method and historical decomposition with directed acyclic graphs to quantity the impacts of the foot and mouth disease outbreak on the Brazilian meat market for different levels of the industry (export, wholesale and farm). The imposition of an import ban by Russia on Brazilian meat exports is also analyzed. Results show that beef, pork, and chicken export prices all decreased after the FMD outbreak. More importantly, our findings indicate that all prices ended up recovering after the removal of the import ban by Russia in December 2007. As for the price margins in both beef and pork meat supply chains, the export-to-farm and export-to-wholesale margins were found to be very close to each other. On the other hand, the chicken price margin at the export level relative to the farm and wholesale levels had opposing directions trend movements. Finally, the historical decomposition of analysis of the export beef price revealed that the removal of the Russian ban on Brazilian meat imports had a very drastic positive influence on the beef industry supply chain in general.