The ripple effect of animal disease outbreaks on food systems: The case of African Swine Fever on the Chinese pork market

Research on animal health economics has emphasised the importance of accounting for the indirect economic effects of animal disease outbreaks. Although recent studies have advanced in this direction by assessing consumer and producer welfare losses due to asymmetric price adjustments, potential over-shifting effects along the supply chain and spill-overs to substitute markets have been under-examined. This study contributes to this field of research by assessing the direct and indirect effects of the African swine fever (ASF) outbreak on the pork market in China. We employ impulse response functions estimated by local projection to calculate the price adjustments for consumers and producers, as well as the cross-effect in other meat markets. The results show that the ASF outbreak led to increases in both farmgate and retail prices but the rise in retail prices exceeded the corresponding change in farmgate prices. Furthermore, beef and chicken prices also rose, demonstrating the spill-over impacts of the outbreak to other markets. Overall, the evidence illustrates that a disruption in one part of a food system can have significant ripple effects across other parts of the system. •Animal disease outbreaks constitute a significant and increasing threat to food systems.•Impulse response functions used to capture cross effects within and between systems.•The effect on consumers was twice than on producers, displaying an over shifting effect.•The price of other markets also increased, displaying spillover effects into the system.•A disruption in one part of the system can have important ripple effects in other parts.