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The Impact of BSE on U.S. Exports of Beef and Pork

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ABSTRACT

An augmented vector-autoregressive (VAR) model relating pre- and post-BSE (bovine spongiform encephalopathy) exports of U.S. beef meat, beef offal, pork meat, and pork offal was used to test for structural changes following an outbreak of BSE in the United States in December 2003. The VAR, exogenous variables—intercepts, seasonal dummies, and export unit value first lags—and covariance estimates all had statistically significant changes for each of the four types of exports, indicating that BSE caused structural changes in U.S. exports of the four meats. To demonstrate the effects of these coefficient-estimate shifts, post-BSE exports were forecast using both sets of coefficients, the pre- and post-BSE periods. These forecasts were in concordance with actual U.S. export data, showing that the structural changes lead to a decrease in U.S. beef meat and offal exports and a strong increase in U.S. pork meat and offal exports in the post-BSE years. [Econ Lit Classification: F140, F170, and Q170.].

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