Fusarium Head Blight is a fungus affecting wheat and barley in the upper Midwest region of the United States. The purpose of this study is to estimate the direct and secondary regional economic impacts of Fusarium Head Blight infestations from 1998 to 2000. Cumulative direct production and price impacts from Fusarium Head Blight in hard red spring, soft red winter, durum wheat, and barley are estimated at $871 million over the period, with secondary economic losses of $1.8 billion. The total impacts of $2.7 billion were concentrated in North Dakota and Minnesota, which accounted for 55% of total losses over the period.
Fusarium Head Blight (FHB) has led to major economic costs for wheat and barley producers. Grain products and feed grain contaminated with deoxynivalenol (DON) (commonly known as vomitoxin) are subject to Food and Drug Administration advisory limits and as a result end-users place restrictions on their use. This has led to steep price discounts, as well as higher risks for producers and grain merchandisers. Varietal research has led to development of varieties that are resistant or moderately resistant to FHB. Studies indicate combinations of genetic resistance, fungicides and some management practices (combine settings, tillage practices, etc.) can be used to decrease economic costs due to FHB. The purpose of this study was to estimate the economic costs of scab. To do so we developed several economic models, analysed extensive data and conducted surveys of wheat flour millers, barley maltsters, and grain handlers. A detailed assessment of costs indicates the most important costs accrued by the wheat and barley industries were the risk premium paid to induce adoption of DON reducing technologies and the value of yield forgone. These were followed by the direct costs of fungicide, added shipping costs, testing and segregation and discounts.
Revitalization of state brands is deemed important to several constituencies. Stated preference with choice experiment methods were used to elicit consumer preferences for two locally grown products: spinach, which has had a well-publicized food safety incidence, and carrots, which have had no such incidence in recent history. A full factorial design was used to implement the choice experiment, with each commodity having four identical attributes varying at different levels. Findings reveal that consumers are willing to pay a premium for locally grown spinach marked with the Arizona Grown label over locally grown spinach that was not labeled. This premium was higher than the premium that would be paid for state-branded carrots. This difference highlights consumers’ perceptions of “locally grown” as an indicator of safety in their food supply. Findings have important implications with respect to providing consumer value and point to differentiated positioning strategies for state-branded produce.
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