Olvera, Isaac Daniel (2016-06). Economic Implications Associated with Pharmaceutical Technology Bans in U.S. Beef Production. Doctoral Dissertation.
Sustainability in agricultural production has become a large point of emphasis for consumers in the United States. Despite pharmaceutical technologies being used to increase production efficiency and cost effectiveness, their use remains questioned by the general public, particularly regarding antibiotics within the livestock sector. Therefore, the objectives of this study were to determine the economic effects of a removal of certain technologies from the U.S. beef cattle production system. A whole system structural econometric model was used to determine effects of: (1) a removal of feed-grade antibiotics as growth-promotant technologies, and (2) the removal of all growth enhancing technologies from the U.S. beef cattle industry as possible future policy. One year after implementation, the loss of feed grade antibiotics is predicted to reduce fed cattle inventories by 270,000 animals and reduce carcass beef by approximately 227.6 million lb. Additionally, beef production and consumption are estimated to decrease by approximately 1% five years post ban. The loss of all growth enhancing technologies predict much larger implications, with one-year post-ban reductions in fed cattle inventories estimated to be 3.1 million animals and a corresponding 2.2 billion lb reduction in carcass beef. At five years post ban, beef production and beef consumption are projected to decrease by 10.5% and 8.2%, respectively while beef imports are projected to increase by 9.1%. Additionally, an equilibrium displacement model was used to further investigate the effects of a removal of feed-grade antibiotics used to control liver abscesses in U.S. feedlot cattle. In this model the largest first year change, as expected, is within the slaughter cattle sector with a 4.45% reduction in quantities supplied and an 11.13% increase in slaughter cattle price. The 10-year net change for retail beef is estimated to be a 6.31% reduction in total quantity, and a corresponding 1.13 billion lb loss in total beef supplied at the retail level. The term "sustainability" in agricultural production is often interpreted to mean natural or free of certain technologies. This study has shown that the removal of technological advances poses a significant economic concern to beef producers and consumers alike.