Biosecurity is an increasingly prominent concern to the Canadian agri-food sector given heightened public awareness of animal welfare and the continued importance of trade. Due to the potential for large-scale animal depopulation and uncertain trade flow restrictions, the economic costs and animal welfare implications of disease outbreaks have prompted efforts to control their spread within and across trade boundaries. We build a partial equilibrium model of the beef supply chain in Ontario to examine the welfare impacts of a foot-and-mouth disease outbreak inside and outside the province. Somewhat surprisingly, economic impacts for Ontario are not dramatically different between an outbreak within the province versus an outbreak in western Canada: losses total $245 and $217 million, respectively. When the outbreak occurs outside Ontario and provincial zoning is recognized, losses total only $93 million. Restrictions on international and, inter-and intra-provincial movement of livestock and beef products are the main driver of losses. A strength of our model is that we are able to disaggregate these impacts across the various market participants (i.e., producers, processors, retailers, consumers). Retailers and consumers incur little to no losses as imports from the United States easily fill shortages in supply. Production losses from livestock movement restrictions and depopulation are partially offset by higher prices, while processors bear the brunt of the losses due to reduced supply and higher livestock prices. La biosécurité revêt de plus en plus d'importance dans le secteur agroalimentaire canadien en raison de la sensibilisation accrue du public au bien-être animal et de l'importance soutenue du commerce. Compte tenu de l'éventualité d'un dépeuplement animalà grandeéchelle et de mesures pouvant restreindre le flux deséchanges commerciaux, le coûtéconomique deséclosions de maladies et leurs répercussions sur le bien-être animal ont stimulé les efforts afin de maîtriser leur propagation tantà l'intérieur qu'à l'extérieur des frontières commerciales. Dans la présenteétude, nous avonsélaboré un modèle d'équilibre partiel de la chaîne d'approvisionnement du boeuf en OntarioCanadian Journal of Agricultural Economics 65 (2017) INTRODUCTIONThe economic costs and animal welfare implications of disease outbreaks-such as the potential for large-scale animal depopulation and uncertain trade flow restrictionshave prompted efforts to control their spread within and across trade boundaries. As a small open trading economy, Canada's beef sector depends on cross-border movement of both livestock and animal products, and thus animal disease outbreaks can be especially harmful. Klein and Le Roy (2010) estimated the 2003 bovine spongiform encephalopathy (BSE) outbreak in Alberta caused $4.06 billion in losses to the Canadian beef industry; the temporary closure of live cattle export markets accounted for 96.5% of these losses. A similar outbreak today could have even larger consequences owing to the growth in agrifood tra...

Trade is an integral part of the Canadian economy. The main institutional drivers governing trade are bilateral and multilateral agreements outlining permissible trade distorting measures. Since its inception in 1972, Canada's supply management system has remained protected throughout trade negotiations. The system appears, by any economic measure, to be having an increasingly disproportional influence in recent trade negotiations. However, trade agreements serve not only to maximize social surplus, but also to maximize some measure of political welfare. Canada has recently negotiated three prominent trade agreements: the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) came into effect in the latter part of 2017; the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came into effect at the end of 2018; and the Canada-United States-Mexico Agreement (CUSMA) could come into effect as early as late 2019. Collectively, these agreements have guaranteed increased market access for fresh and processed dairy products. We build a spatial partial equilibrium model of the Canadian dairy industry consisting of three regions and ten commodities to assess the individual and cumulative effect of these trade agreements. We pay particular attention to the institutional drivers within today's dairy sector: milk protein concentrates; component pricing including Class 7; and differential demand growth. We find that the aggregate impacts are: (i) a 7.0% decrease in the marginal retail price; (ii) a 4.7% decrease in the blended producer price; and (iii) an overall increase in social welfare of 5.5%. Worth noting, the decrease in producer surplus varies from 3.1% in the western region to 6.3% in the eastern region. Our results may be relevant to future negotiations as well as the publicly promised compensation package for dairy producers.

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African swine fever (ASF), a highly contagious disease affecting domestic and wild pigs, has been spreading globally, with devastating impacts on hog markets. The European Union saw pork exports decrease by €556 million (9%) as a result of ASF outbreaks across four countries in 2014. Similarly, in 2018, when ASF was first reported in China, there was a 30% decrease in the Chinese pig inventory and in total pork production. ASF’s eventual spread to North America seems inevitable. Given Canada’s export-oriented pork industry, the economic costs and animal welfare impacts of an ASF outbreak in the Canadian hog sector could prove devastating as a result of potential border closures and large-scale animal depopulation. To estimate the impacts, we build a partial equilibrium, vertically integrated model of Ontario’s pork industry from the breeding herd through to end consumer. If an outbreak occurred in a central production region of Ontario, we estimate that Ontario’s pork industry would experience a welfare loss of C$860 million (28.1%). Conversely, if an outbreak occurred in Western Canada, the Ontario pork industry would benefit by C$198 million (6.5%). Not surprisingly, an outbreak will redistribute significant economic rents in the sector depending on where exactly the first outbreak occurs.