How Do E. coli. Recalls Impact Cattle and Beef Prices?

Abstract

We conducted an event study to examine the effect of E. coli recalls on prices in the vertically connected U.S. beef industry. Our findings show that the resulting price changes of beef products vary across stages in the U.S. beef industry and that the prices of disaggregated beef products are more vulnerable to E. coli recalls than the prices of aggregated products. This suggests that downstream agents transacting specific ground beef products may be more adversely affected by E. coli recalls than upstream agents trading live animals.

Keywords

• abnormal returns
• beef industry
• beef price response
• cattle price response
• event study
• food recalls
• food safety