The Impact of Foot and Mouth Disease on the Meat Prices in Malaysia

Abstract

This paper examines the impact of foot and mouth disease (FMD) outbreaks on meat prices in Malaysia (i.e., at wholesale and retail of beef, imported mutton and mutton) from January 2000 to December 2015. The data were analyzed using time series methods (i.e. unit root test and error correction model). The results demonstrate that frequent FMD outbreaks have significant impacts on meat prices in Malaysia. Most of the drops in prices occurred within a short period of time. Due to FMD outbreaks, several meat price margins took a long time to recover, while some price margins improved quickly. This may occur due to the FMD reduces the amount of meat that an animal can produce, and animals affected by this disease require some time to recover. High demand with low supply will consequently cause an increase in the price of meat.