Economic impacts of growth promotants in the beef, pork and poultry industries

Brian Lee Buhr

ISU General Staff Papers from Iowa State University, Department of Economics

Abstract: Advances in biotechnology have resulted in the potential for use of growth promotants in commercial livestock production. Somatotropins and beta-agonists are the two growth enhancers most likely to be used in beef, pork, and chicken production. The growth promotants increase production efficiency and also result in improved lean composition of meat;Commercial availability of growth promotants will have impacts on all participants in meat production, including producers, processors, consumers, crop producers, and the government, and their possible use has been controversial. The objective of this study is to determine the likely economic impacts of the adoption of growth promotants by beef and pork producers through the use of systematic ex ante evaluation framework. Key issues which must be addressed to determine the likely economic impacts of growth promotants include the timing and level of producer adoption, and consumer acceptance of meats treated with growth enhancers. Survey information and prior studies of the adoption of technology are used to determine likely producer adoption response. An experimental economics approach is used to estimate consumer acceptance of meat products produced by animals treated with growth promotants. Finally, a dynamic supply-demand econometric model of the beef, pork, and poultry industries was estimated, and used as the basis for simulating the likely impact of these technological changes;Results of the producer adoption survey suggest that beta-agonists are more likely to be adopted and to be adopted more rapidly than somatotropins. In addition, large producers and producers with greater management sophistication are likely to adopt more rapidly than others;Results of the consumer experiments suggest that consumers are willing to pay more for the leaner meat products obtained with the use of growth promotants, although consumers are initially concerned about the safety of the products. These results are subject to information provided with respect to the safety of growth promotants and the quality of the treated meat products;Results of the simulation of the adoption of growth promotants suggest that early adopters are likely to receive increased profits from the use of growth promotants. However, as more producers adopt, industry profits return to normal levels. Quantities of meat are more plentiful, and farm and retail prices for meat decline. Thus, consumers are the primary beneficiaries of the use of growth promotants in meat production.

Date: 1992-01-01
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