Financial losses for Dutch stakeholders during the 2013 aflatoxin incident in Maize in Europe

Abstract

AbstractEarly 2013, high concentrations of aflatoxin M1 were found in the bulk milk of a few dairy farms in the Netherlands. These high concentrations were caused by aflatoxin B1 contaminated maize from Eastern Europe that was processed into compound feed, which was fed to dairy cows. Since the contamination was discovered in the downstream stages of the supply chain, multiple countries and parties were involved and recalls of the feed were necessary, resulting into financial losses. The aim of this study was to estimate the direct short-term financial losses related to the 2013 aflatoxin incident for the maize traders, the feed industry, and the dairy sector in the Netherlands. First, the sequence of events of the incident was retrieved. Then, a Monte Carlo simulation model was built to combine the scarce and uncertain data to estimate the direct financial losses for each stakeholder. The estimated total direct financial losses of this incident were estimated to be between 12 and 25 million euros. The largest share, about 60%, of the total losses was endured by the maize traders. About 39% of the total losses were for the feed industry, and less than 1% of the total losses were for the dairy sector. The financial losses estimated in this study should be interpreted cautiously due to limitations associated with the quality of the data used. Furthermore, this incident led to indirect long-term financial effects, identified but not estimated in this study.