2. MAJOR FINDINGS
- For Scotland, the indirect cost following an outbreak of ASF is mainly driven by the revenue lost in the market for pork. However, total indirect costs are partly offset by increased revenue in other markets. This may be driven by a change in consumer demand for substitute products. Increased demand leads to increased retail prices; hence the consumer ends up paying more for all goods.
- The magnitude of indirect costs are greater when considering retail prices (instead of producer prices), suggesting that the shock affects more than just the producers, but also other stakeholders along the supply chain.
- For producers, a medium sized outbreak, defined as culling 20% of the national herd, generates a total revenue loss of £ 2.65 million. Because some markets experience an increase in revenue due to higher prices and increased demand, the revenue lost for the pork market exceeds the total revenue lost. In particular, the pork market loses £ 2.94 million. Using retail prices, which takes account of any value added along the supply chain, total indirect cost of a medium outbreak is £ 7.84 million.
- For Britain, the cost estimates are larger. This is in part driven by a greater response in each of the variables, but also because the shock takes longer to dissipate.
- For producers, a medium sized outbreak would cost pork producers £ 53.50 million. Using retail prices, total indirect cost of a medium outbreak is estimated to be £ 139.07 million.