There's an interesting new paper in Applied Economic Perspectives and Policy by Cakir, Boland, and Wang that studies the impacts of the 2015 highly pathogenic avian influenza (HPAI or avian flu) outbreak in the US. The authors draw attention to the free-trade deals signed by our trading partners and highlight a beneficial aspect of those trade deals that allow other countries to place bans on imports only only those specific regions or states that have infected animals. As the authors show, the economic losses from the bird flu outbreak would have been much worse had other countries simply banned all imports of US turkey.
Here are the author's main findings:
“Our main findings show that the U.S. turkey producers lost approximately $225 million due to the 2015 HPAI outbreak. Of the $225 million, $101 million is borne by the producers in Minnesota and $124 million is borne by the producers in other states outside Minnesota. Furthermore, the results show that $207 million of the total loss to turkey producers is due to the loss in exports. In particular, the decrease in exports affects the producers in states outside Minnesota, costing them about $181 million. The additional loss to Minnesota producers due to the loss in exports is about $26 million. The counterfactual decrease in exports had the importing countries not used rolling bans during the 2015 outbreak is unknown. However, the model estimates indicate that for every percentage point of additional exports during the outbreak the U.S. turkey producers avoided a loss of about $6 million.”
This is from the conclusions:
“Our ex-post analysis of the 2015 HPAI outbreak provides important insight into the value of effective communication with domestic stakeholders and trading partners. Many national media predicted that the economic impact of the avian flu on the U.S. turkey industry was going to be dramatic in early 2015. There is no doubt that the economic impact was great. However, the total estimated producer loss would have been much greater if a domestic food scare had happened or if many of the importing countries did not implement regional bans. The ability of the U.S. turkey industry to work with U.S. and international stakeholders who included scientists, veterinarians, and others through protocols established in SPS policies in free trade agreements facilitated trade in U.S. turkey products to continue. This provided great benefits to the turkey producers during a difficult period. In fact, the model estimates indicate that for every percentage point of additional exports during the outbreak the U.S. turkey producers avoided a loss of about $6 million.”