The Impact of Food Safety Recalls on Canadian Beef Demand
A number of food safety events and recalls have raised consumer awareness about the risks associated with food borne pathogens. While consumer confidence in the food safety system as a whole has not waned in the long run, food safety events can have important short and medium-term impacts.
A recent study led by Dr. John Cranfield at the University of Guelph examined whether food safety related recalls of beef and non-meat food products arising from possible E. coli contamination in Canada, and similar recalls in the U.S., affect beef demand in Canada.
Beef demand is an indication of consumers’ willingness to purchase, and refers to how much beef will be consumed at a given price. It is influenced by consumer income, prices of competing proteins and evolving consumer preferences for convenience, health benefits and taste. Food safety and product quality are consistently the top two demand shifters for both ground beef and steak.
The study found that a one percent increase in beef recalls in Canada would currently lead to a 0.037 percent decrease in beef demand. It also found that U.S. recalls of beef did not have a measurable effect on Canadian beef demand, but E. coli-based recalls of non-meat foods (with no connection to Canadian product) in the U.S. led to reduction in Canadian beef demand because of negative media about the potential of beef production as a source of contamination.
On average, one additional beef recall in Canada would lead to a 2,260 tonne reduction in beef consumption per quarter (with a range of 710-5,740 tonnes), valued around $C26.5 million at the retail level (with a range of $8-67 million). This is equivalent to a one percent drop in consumer beef expenditures. Therefore, investments in food safety research that reduce the incidence of recalls can support beef demand.
To learn more about this study, see the BCRC fact sheet.
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