Predicting food safety losses in turkey processing and the economic incentives of hazard analysis and critical control point (HACCP) intervention

Nganje, W.E., Siaplay, M., Kaitibie, S. and Acquah, E.T. 2006. Predicting food safety losses in turkey processing and the economic incentives of hazard analysis and critical control point (HACCP) intervention. Agribusiness 22(4):475-489.

Turkey is an important food commodity whose total value of U.S. production amounted to $2.72 billion in 2003. Empirical evidence suggests that among broilers, eggs, turkeys, and chickens, Salmonella contamination of ground turkey is highest at 49.9% prior to hazard analysis and critical control point (HACCP) implementation and 26.6% after HACCP implementation. Salmonella and other microbial outbreaks have greatly contributed to the large number of food recalls in the meat and poultry industry; therefore, processed turkey constitutes a prime commodity for HACCP intervention analysis. Value-at-risk provides a framework for assisting firm management to assess food safety risks in monetary terms, and to evaluate the economic incentives of control measures like HACCP. Results show that food safety losses as measured by downside risk significantly declined following HACCP implementation. Medium- and large-scale turkey processors are more likely to derive more benefit from implementing an augmented HACCP plan than a generic HACCP plan.