The study found they significantly reduce the demand for ground beef contemporaneously among most, but not all, regions.
The impact of Food Safety Inspection Services (FSIS) recalls on US consumer meat demand was estimated using monthly grocery-scanner data.
Researchers used meat demand data from IRI FreshLook Perishable Service from January 2009 to February 2014. They examined how recall events impact meat demand across eight US regions, meat products and pathogen type.
A common effect on demand?
They found that most food safety recalls have the same effects on consumer meat demand across regions but poultry notices seem to have more of a regional impact.
The final model specifications estimate the contemporaneous (lag length = 0) as well as long-run effects (lag length = 1-4) of FSIS recalls.
Analysis did not support the common assumption that beef E. coli recalls and beef non-E. coli recalls have common effects on total US demand for beef, pork, chicken and turkey.
In regions like the South Central and Southeast, beef demand is significantly and negatively impacted by beef E. coli recalls in the long run (also in the short run in the Southeast).
“Specifically, a 10% increase in beef E. coli recalls reduces beef demand in the Southeast by 0.07% in the short run and 0.13% in the long run. Also, beef E. coli recalls decrease chicken demand in California and increase pork demand in the Southeast and West contemporaneously.
“In addition, beef non-E. coli recalls have negative and significant long-run effects on beef demand in the Northeast and Plains, which indicates that a 10% increase in beef non-E. coli recalls decreases beef demand by 0.25% and 0.35% in the Northeast and the Plains. Beef non-E. coli recalls also have spillover effects on turkey demand in Northeast, both in the short and long run.
“It seems that effects of pork recalls have been recovered within four months in Great Lake and Northeast, because such recalls have positive and significant effects on pork demand in the long run.”
Beef E. coli recalls have significant and negative effects across regions on ground beef demand contemporaneously in six regions.
“For example, a 10% increase in the number of beef E. coli recalls reduces ground beef demand by 0.09% in California in the short run. Most of beef E. coli recalls across the US only impact ground beef demand for a very short period as long-run effects were significant only in the Southeast.
“Beef E. coli recalls have not impacted other beef demand except for significant impacts in the Southeast and Mid-south.”
The researchers work suggests beef non-E. coli and poultry recalls are more heterogeneous in impacts across regions than beef E. coli and pork recalls.
Regional impact of poultry recalls
Meat demand, especially ground beef, is influenced by beef E. coli recalls in most regions.
“Although the impact of beef E. coli recalls on demand is relatively small, the meat industry still needs to pay attention and routinely detect contaminations of foodborne illness in order to minimize negative effects on demand.
“Since beef E. coli O157: H7 recalls have short-run effects on meat demand, federal agents such as the FSIS and CDC need to release recall and related health information to the public in a timely manner and continue to work with the industry to reduce recall prevalence.”
Poultry recalls are more prevalent in having heterogeneous regional impacts than beef E. coli, beef non-E. coli recall and pork recalls.
“This suggests national, societal investments (e.g. allocation of federal tax based government expenditures) in mitigating poultry recalls present more heterogeneous net benefits to US residents based upon their region of residence.”
Source: Food Policy Volume 69, May 2017, Pages 145-153
Authors: Xia Shang and Glynn T. Tonsor