VALUE-AT-RISK AND FOOD SAFETY LOSSES IN TURKEY PROCESSING

Food safety risks and microbial outbreaks have significant health impacts on society as a whole, as well as economic loss to food processing firms. According to the U.S. Centers for Disease Control (CDC), an estimated 76 million foodborne illnesses occur each year in the United States. Of these cases, 325,000 hospitalizations and 5,000 deaths occur each year (Mead et al., 1999). The U.S. Department of Agriculture, Food Safety and Inspection Services (USDA-FSIS) (1996) estimated that approximately 4,000 deaths each year are attributed to contamination in meat and poultry products. For food processing firms, microbial outbreaks often result in significant economic losses: food recalls, lost market share, and decreased consumer confidence. The intangible nature of aggregate economic losses makes it difficult for firm managers to predict firm-level economic impacts of food safety losses and adopt effective risk mitigation strategies. Developments in Value-at-Risk (VaR) methods provide an analytical framework to resolve this problem. This report develops VaR models to predict food safety risks in turkey processing, under alternative risk mitigation strategies. The FSIS records of food recalls from 1994 to 2003 indicated that as much as $1.35 billion in losses were realized in the turkey industry. The objective of this report is to determine the firm-level risk reduction capabilities and performances of Pathogen Reduction/Hazard Analysis and Critical Control Point (PR/HACCP) systems using VaR and out-of-sample testing for robustness of findings. The VaR results suggest that characteristic turkey processing plants, on average, were losing$0.06905 per lb not more than 5% of the time in any given month in the period prior to PR/HACCP implementation. However, after PR/HACCP implementation, turkey processing plants were losing $0.04936 per lb. In the period after PR/HACCP implementation, losses incurred under generic and augmented PR/HACCP for the small turkey processing plant were not significantly different. The out-of-sample tests indicated that VaR was adequate in predicting firm-level food safety economic losses. The results of this report provide private and public policymakers with alternatives to improve PR/HACCP implementation.PR/HACCP, Value-at-Risk, Salmonella, Turkey Processing, Food Consumption/Nutrition/Food Safety,

Impact of Social Cash Transfers on Young Adults Labor Force Participation, Schooling, and Sexual Behaviors in South Africa

My dissertation consists of two papers examining the impact of South Africa's social cash transfers namely Old Age Pension (OAP) program on labor force participation, schooling, and sexual behaviors of African young adults aged 14-22 using Cape Area Panel Study (CAPS) data. Both papers use Regression Discontinuity Design (RDD) identification strategy to examine the causal effect of OAP on labor force participation, schooling, and sexual behaviors of African young adults. This estimation is made possible by age-eligibility rule of OAP for women and men at 60 and 65 years old, respectively.Findings and Conclusions: The first paper examines the impact of OAP on labor force participation and schooling of young adults. I find that any OAP, OAPFemale, and OAPMale receipts did not have any significant impact on labor force participation and schooling of young adults aged 14-20. In contrast, OAPFemale receipts have significant and negative impact on labor force participation of young adult males aged 21-26. Although, OAPFemale receipts have positive impact on school enrollment of young adult males aged 21-26, these estimates were not statistically significant. On the other hand, OAPMale receipts have positive and significant impact on labor force participation as well as negative and significant impact on school enrollment of young adult males aged 21-26. The second paper examines the impact of OAP on sexual behaviors of young adults. I find that OAPFemale receipts reduce the probability of young adult females sexual debut by 15.3% on average. There were no significant impact of any OAP, OAPFemale, and OAPMale receipts on self-reported condom use and number of multiple partners of young adults. Young adult females and males who live with OAPFemale recipients reduce their probability of getting married by 9.1% and 24.1% on average, respectively. On the contrary, young adult females and males who live with OAPMale recipients increase their probability of getting married by 21.4% and 23.8% on average, respectively. Overall, these results are important because it suggests that OAP can improve African young adults transition into the labor market in time when unemployment is high as well as improve their transition into adulthood in time when HIV/AIDS infection rate is high.Department of Economics and Legal Studie

Should Grain Elevator Managers Adopt Integrated Pest Management?

Insect infestation during storage and processing causes millions of dollars of wheat damage annually in the United States. Insect infestation reduces wheat storing processing profit as well as consumer confidence in wheat food products. Meanwhile, increased concerns about insecticide use have increase interest in Integrated Pest Management (IPM) strategies. This research compares the costs of IPM and chemical-based approaches to insect control to determine why most elevator managers have not adopted IPM practices.Agribusiness,

VALUE-AT-RISK AND FOOD SAFETY LOSSES IN TURKEY PROCESSING

Food safety risks and microbial outbreaks have significant health impacts on society as a whole, as well as economic loss to food processing firms. According to the U.S. Centers for Disease Control (CDC), an estimated 76 million foodborne illnesses occur each year in the United States. Of these cases, 325,000 hospitalizations and 5,000 deaths occur each year (Mead et al., 1999). The U.S. Department of Agriculture, Food Safety and Inspection Services (USDA-FSIS) (1996) estimated that approximately 4,000 deaths each year are attributed to contamination in meat and poultry products. For food processing firms, microbial outbreaks often result in significant economic losses: food recalls, lost market share, and decreased consumer confidence. The intangible nature of aggregate economic losses makes it difficult for firm managers to predict firm-level economic impacts of food safety losses and adopt effective risk mitigation strategies. Developments in Value-at-Risk (VaR) methods provide an analytical framework to resolve this problem. This report develops VaR models to predict food safety risks in turkey processing, under alternative risk mitigation strategies. The FSIS records of food recalls from 1994 to 2003 indicated that as much as $1.35 billion in losses were realized in the turkey industry. The objective of this report is to determine the firm-level risk reduction capabilities and performances of Pathogen Reduction/Hazard Analysis and Critical Control Point (PR/HACCP) systems using VaR and out-of-sample testing for robustness of findings. The VaR results suggest that characteristic turkey processing plants, on average, were losing$0.06905 per lb not more than 5% of the time in any given month in the period prior to PR/HACCP implementation. However, after PR/HACCP implementation, turkey processing plants were losing $0.04936 per lb. In the period after PR/HACCP implementation, losses incurred under generic and augmented PR/HACCP for the small turkey processing plant were not significantly different. The out-of-sample tests indicated that VaR was adequate in predicting firm-level food safety economic losses. The results of this report provide private and public policymakers with alternatives to improve PR/HACCP implementation

Using Basis and Futures Prices as a Barometer in Deciding Whether to Store Grain or Not

The purpose of this paper is to determine the importance of the strength and weakness of basis and futures prices as barometers for producers to use in deciding whether to store or not. Basis is the single most important market signal for wheat producers to use when deciding whether to store or sell their wheat at harvest. While some models indicated low futures prices were a signal to store, results were fragile and inconsistent

Should Grain Elevator Managers Adopt Integrated Pest Management?

Insect infestation during storage and processing causes millions of dollars of wheat damage annually in the United States. Insect infestation reduces wheat storing processing profit as well as consumer confidence in wheat food products. Meanwhile, increased concerns about insecticide use have increase interest in Integrated Pest Management (IPM) strategies. This research compares the costs of IPM and chemical-based approaches to insect control to determine why most elevator managers have not adopted IPM practices