Changes in foot and mouth disease status and evolving world beef markets



Argentina and Uruguay eradicated foot and mouth disease (FMD) in 2000 and 1995, and subsequently gained greater access to FMD-free markets. Although both South American countries suffered from the reintroduction of FMD in late 2000, and had to temporarily cease exports to FMD-free markets, they are expected to eradicate FMD again and will continue to increase exports to FMD-free markets. This article analyzes the changes in international beef trade and, especially, in beef prices that are expected. We use a simulation model that captures the effects of market segmentation due to the FMD status and of the trade policies of exporting and importing countries. The ongoing realignment of trade flows has potential to significantly affect prices in both the FMD-free and the FMD-endemic segments of the world beef market. We demonstrate how growing beef exports from South America to FMD-free markets interact with other on-going changes in international beef markets. © 2002 Wiley Periodicals, Inc. [EconLit citations: Q110: Agriculture, Aggregate Supply and Demand; Q170: Agriculture, International Trade]