IMPACTS OF SELECTED, MEDIA-REPORTED, BEEF SAFETY PROBLEMS ON CONSUMER BEEF PURCHASES

Beef safety issues often lead to reduced beef consumption. A household survey in five major U.S. cities asked consumers to indicate whether media reporting of the Mad Cow Disease, Oprah Winfrey’s TV (burger) statement and packer fresh beef recalls had led the respondents to reduce beef consumption, by how much and for what length of time. Packer recalls and Mad Cow Disease reduced beef consumption by 26 and 22 percent of respondents, respectively. These consumers reduced beef consumption by an average of one third for approximately 15 weeks. Important factors included frequency of beef consumption, consumer rating of safety of local beef supplies, city and single adult in households. INTRODUCTION Beef has been the most popular red meat in the United States for over 50 years. U.S. per capita beef consumption peaked at 94.4 lbs (retail weight) in 1976 (USDA 1995). Since then, beef consumption, in retail pounds per capita, has decreased to the mid 60s in 2003. Over the same period, consumption of broiler meat increased greatly and pork consumption increased slightly. Why the big decrease in beef consumption? While beef’s real price has risen more rapidly than that of competitive meats, which in itself is a serious problem, beef also has suffered relative to competitive meats due to nutrition issues (high saturated fat and cholesterol contents) and food safety issues (use of chemical growth stimulants and antibiotics during the production period, contamination with pathogens, such as E. coli and Salmonella, during processing, and susceptibility to diseases suspicioned to impact human health). For one or more of these reasons, some former beef consumers have either ceased consumption of beef entirely or are consuming less today than in the mid 1970s. Consumers can handle higher prices by switching to lower priced cuts or even reducing quantity consumed. Higher fat and cholesterol content can be reduced through product selection and special precautions before and after preparation. On the other hand, consumers often feel powerless with reference to avoiding food safety problems. Food safety problems are often unobservable in the raw product, providing no warning to the consumer. These safety problems need to be prevented or corrected by those handling the product prior to its sale to the final consumer. Southwestern Economic Review 14 Concerns among consumers for the food safety of beef appear to have lessened somewhat but have not ceased. Growth stimulants have been changed to reduce their highly negative consumer perceptions. Concerns over the possible impacts of pathogens and animal diseases on the safety of beef as a food product have remained, however. While the industry has made strides in reducing the incidence of the latter safety problems, they have proven to be difficult to eliminate. The one treatment that could remove these problems of fresh beef at the point of sale (irradiation) has not been accepted by many consumers. Consumers use personal experience and information they obtain from product labels or media messages in reacting to safety problems of fresh beef. If an individual’s beef consumption leads to his or her personal illness or the individual’s physical condition causes his or her doctor to recommend reduced beef consumption, the consumer reacts quickly. The typical beef consumer also reacts to new safety information obtained word-of-mouth from other consumers. This new information is compared with previous information the consumer has retained and he or she makes an appropriate response to beef consumption. Consumers also receive beef safety-related information from local and national media (television, radio, newspapers, magazines, billboards, and the Internet). They question the accuracy and value of some new safety information because of its source, nature, and/or content. Consumers discard some of the new safety information and retain another part for later verification. The remaining information is accepted and adds to the consumer’s current perceptions of the food safety of fresh beef. New safety information provided by the popular media that is accepted can impact the individual beef consumer in one of several ways: a. Cause consumers to become concerned or suspicious of the safety of fresh beef but lead to no immediate change in the purchase or consumption of fresh beef. b. Cause consumers to immediately reduce fresh beef purchases by a given amount, or, c. Cause consumers to reduce fresh beef purchases over an extended period of time. Which of these alternatives the consumer will select depends on the individual’s previous knowledge of the safety of fresh beef, the seriousness of the new safety information, the individual’s willingness to accept risk, and the consumer’s socioeconomic characteristics. Recent LSU research provides estimates of the impacts resulting from three, media-covered, safety-related incidents (one issue, one statement and one event) of national significance that occurred over the most recent ten-year period. Consumer reactions to these incidents in terms of changes in beef consumption should provide guidance on how they respond to food safety issues in general. These results should also be useful in estimating the response of consumers to future safety incidents involving fresh beef. OBJECTIVES The general objective of the study is to estimate any reductions in consumer purchases of fresh beef as a result of selected safety incidents reported by the national media. The specific sub-objectives are: Impacts of Selected, Media-Reported, Beef Safety Problems on Consumer Beef Purchases 15 1. Estimate the proportion of consumers who were concerned about the impact of three selected incidents on the safety of local beef supplies but who made no change in fresh beef consumption, by city and household socioeconomic characteristics. 2. Estimate the extent of reduced consumption of fresh beef resulting from the three selected incidents, by city and household socioeconomic characteristics. 3. Estimate the number of weeks consumers reduced their beef consumption as a result of the three selected incidents, by city and household socioeconomic characteristics. THEORY AND METHODS Utility theory is often used to explain why individuals purchase particular food products. Information on the safety of food products is an important component of determining these product utilities. Safety information can be obtained from personal experience or from secondary sources ( such as the media, academic sources, industry, and government). Together, these two sources provide the information the consumer uses to help develop their perceptions of the safety of fresh beef. Concern with product safety negatively influences tastes and preferences, hence, reduces the consumer’s demand for the product. The three beef safety-related incidents selected for this study, which were widely reported by the national media, are suspicioned to have negatively influenced U.S. consumer’ purchases and consumption of fresh beef: 1. The BSE (Mad Cow) Disease outbreak in England [an issue]. The first reported case of BSE occurred in mid 1985; however, it was the mid 1990s when England admitted it had a problem with BSE. Authorities also stated that the bovine disease was suspicioned to be linked to a similar human disease Creutzfeldt Jacob Disease (CJD) (CDC 2002). Since the human form of the brain-wasting disease can have a long incubation period and is so debilitating on the individual, this information led to a serious food safety scare. No case of BSE has ever been reported in the U.S. and the U.S. hasn’t imported fresh beef from England for years. The national media covered this story thoroughly over an extended period of time. This issue was included because of the high scare quotient and to test the confidence consumers have in the USDA’s ability to keep such animal diseases from our food supply. 2. Oprah Winfrey’s comments (April 17, 1996) on her television show [a statement]. A guest on her show (Howard Lyman) associated beef with BSE and a variant of the brain-wasting CJD (vCJD)(Lyman 1998). Lyman is a self proclaimed vegetarian and is associated with a group that has a goal of discouraging meat from being included in the human diet. Lyman’s comments, followed by Oprah’s “I’m stopped. I’ll never eat another burger,” led to several lawsuits being filed by cattlemen groups under defamation legislation (Anonymous 2002). Oprah’s original statement and news of the two defamation trials were widely circulated in the national media. This statement was chosen as an example of the influence of strong personal opinion statements of well known TV personalities, sports figures Southwestern Economic Review 16 and other national icons on their perceptions of beef safety. 3. Voluntary beef recalls by major packers [an event]. A number of these recalls have occurred over the last 5-10 years, primarily because of the presence or expected presence of E. coli, Salmonella or other pathogen in previously distributed fresh beef. These recalls, by IBP, Con Agri, Excel and other packers, were covered both regionally and nationally by the media. These recalls represent legitimate indicators of potential health problems associated with given shipments of fresh beef from specified packer locations. As such, in the opinions of the authors, these recalls represent the most legitimate safety threat of the three. Given the objectives of the study and the data, multinomial logit and ordered probit models were chosen as the means for analysis. These models are frequently used in agricultural economics to analyze consumer responses when household socioeconomic variables are employed to explain consumer utility. Following Judge et al.(1988), qualitative choice models can be used to model the choice behavior of individuals (consumers or firm managers) when two or more alternatives are available and one must be chosen. Since the marginal ef