Showing papers in "Agribusiness in 2008"

Food chain management for sustainable food system development: a European research agenda†

Abstract: Food Chain Management is a rather new research domain. As a consequence, the domain and the research challenges within the domain are not yet clearly defined. This corresponds with the variety in the definition of food chains and networks that might focus on either closely cooperating enterprises along the value chain with an executive coordination element or, alternatively, on a network of enterprises in dynamically evolving business relationships. Management challenges in closely cooperating enterprises are closely linked to challenges in enterprise management and can draw on research in this domain; however, management activities in and for networks involve additional challenges that require focused research engagement. The dependency of all participants in the chain on consumers as the ultimate customers and the dependency of the quality of final products on the engagement of all participants in the production and distribution of products require new managerial activities and, in turn, support by research. This article discusses the background of future research needs and formulates priority challenges for managerial improvements toward an increased sustainability of the food sector. [JEL classifications: Q010, Q130, D290, L140] © 2008 Wiley Periodicals, Inc.

Understanding consumer interest in product and process‐based attributes for fresh produce

Abstract: The choices consumers make about fresh produce, such as where it is purchased and what they are willing to pay, are likely influenced by a range of private and public attributes. This study uses factor and cluster analysis techniques to explore the preferences of consumers who responded to a 2006 national survey to determine the dimensions over which consumers make purchasing decisions and to identify key market segments. Analysis is based on a variety of survey questions relating to preferences for various fresh produce traits and process attributes, as well as willingness to pay for a subset of these attributes. We find that although there is only a small degree of correlation between tested variables, four consumer clusters can be identified as market segments: Urban, Assurance Seekers, Price Conscious Consumers, Quality and Safety Consumers, and Personal Value Buyers. Each cluster values both private and public attributes, though with differing intensities and focus. [EconLit citations: Q130, D120]. © 2008 Wiley Periodicals, Inc.

Evaluating animal welfare with choice experiments: an application to Swedish pig production

Abstract: In this study, the demand for animal welfare attributes when buying pork fillet is investigated among Swedish respondents. The issue is of importance in order to ensure an economically viable pig industry while applying an increasing number of animal friendly practices. In order to obtain information about consumer demand, an indirect utility function and willingness to pay (WTP) for animal welfare attributes are estimated. The attributes are solely associated with animal friendly practices. An investigation of numerous housing and managerial practices of pig production has not yet been performed. The indirect utility function is estimated using a random parameter logit model. A realistic approach when modeling consumer choice is to allow for heterogeneity in preferences. The relevance of assuming randomness of some of the parameters is evaluated by using a specification test developed by McFadden and Train (2000). The WTP is also estimated at the individual level. The results indicate that WTP for animal welfare attributes may be negative or positive. The preferences are also heterogeneous among respondents, which may be explained by a segmentation of preferences. Finally, the WTP estimates for animal welfare practices are compared with cost estimates for such production systems. [Econlit subject codes: C010, C500, Q100] r 2008 Wiley-Liss, Inc.

An economic and legal assessment of the EU food industry's competitiveness

Abstract: The objective of this article is to assess the competitiveness of the European food industry from an economic and legal perspective. Knowledge of its present competitiveness and improvement opportunities are lacking. To close this knowledge gap, we measured the competitiveness of eight subsectors, benchmarked them with four leading world economies, assessed the effect of differences in legal requirements, and predicted future developments using scenario analysis. International economics indicators supplemented with data on legal issues from a survey conducted by leading experts were used to measure competitiveness. The results show that the EU food industry's competitiveness is weak. The legal system was positively evaluated compared to the U.S. system, but major improvements are possible. The recommendations are to improve economies of scale, economies of scope, ICT-based supply chain management, and exploit cultural differences through innovation, within a more flexible and streamlined legal framework

Modeling Fresh Organic Produce Consumption With Scanner Data: A Generalized Double Hurdle Model Approach

Abstract: Previous studies using consumer surveys based on contingent valuations gave inconsistent or even contradictory results with respect to the impact of some consumer characteristics on organic foods consumption. Using actual retail-level data, this study provides an objective view of the consumers’ social economic characteristics related to the growth of the fresh organic produce market with a generalized double hurdle model. Market participation and conditional/unconditional consumption elasticities were computed for the generalized double hurdle model. [EconLit citations: C240, D120, Q110]. r 2008 Wiley Periodicals, Inc.

Demand for milk labels in Germany: organic milk, conventional brands, and retail labels

Abstract: German milk brands have come under significant price pressure due to the introduction of retail labels at the lower price end and of organic milk as a premium product. This analysis provides elasticity estimates by milk types and analyzes sociodemographic determinants of demand. A censored system of German household demand for organic and conventional milk, further separated into retail-label and brand milk, is estimated using a two-step procedure on data from the 2000–2003 German GfK ConsumerScan Houshold Survey. Own-price elasticities of conventional milk are around unity, but the demand for organic milk is very price-elastic. Results suggest that the price of organic milk should be considered as an important marketing instrument. [JEL-Code: D12, Q11]. © 2008 Wiley Periodicals, Inc.

Information, labelling, and vertical coordination: an analysis of the Italian meat supply networks

Abstract: After the Bovine Spongiform Encephalopathy (BSE) crisis, the European Union (EU) introduced mandatory and voluntary labelling for meat products to reduce the food safety concerns of consumers and to ensure a better distribution of liability among agents of the meat supply chain. The purpose of this article is to evaluate whether voluntary traceability labelling, introduced by Regulation 1760/2000, can be considered a useful instrument for both the producers and consumers of meat products. Attention is focused on the vertical coordination effects of introducing voluntary labelling along the beef chain and on the interest the Italian consumer shows in labelled information on meat products. Two surveys were conducted: one addressing Italian meat organizations that signed voluntary labelling agreements and the other a sample of 1,025 Italian consumers. With regard to supply, the survey revealed that improved traceability led to a better redistribution of liability among the agents of the meat supply chain and to a strengthening of vertical agreements. Regarding the consumers, the results showed a notable consumer interest in the labelled information such as the meat origin and the information related to the system of cattle breeding, cattle feeding, and the date of slaughtering. © 2008 Wiley Periodicals, Inc.,

Impact of WASDE reports on implied volatility in corn and soybean markets

Abstract: This study investigates the impact of U.S. Department of Agriculture World Agricultural Supply and Demand Estimate (WASDE) reports on implied volatility in corn and soybean markets over 1985 to 2002. If WASDE reports resolve uncertainty, implied volatility should drop immediately after release of the reports. Results show that WASDE reports lead to a statistically significant reduction of implied volatility that averages 0.7 percentage points for corn and 0.8 percentage points for soybeans. The magnitude of the reduction is largest for the group of WASDE reports containing both domestic and international situation and outlook information. This group of reports reduces implied volatility by an average of 1.1 percentage points in corn and by almost 1.5 percentage points in soybeans. Results also reveal that the market impact of WASDE reports is strongest in the most recent 1996 to 2002 subperiod. Overall, the results indicate that WASDE reports provide valuable information to corn and soybean market participants. [JEL classifications: Q100, Q110, Q130]. © 2008 Wiley Periodicals, Inc.

Greek wine firms: determinants of export performance

Abstract: Although extensive research on the importance of the determinant factors of export performance exists, only a few studies on the wine sector have been conducted. The present study examines the export performance determinants of Greek wine firms. Primary data were collected from Greek wine exporters through a mail survey. A combination of exploratory, confirmatory, and path analyses were employed. Factors that were either similar or dissimilar to existing knowledge appear to be important for success in the wine sector. The main success dimensions, in ascending order of importance, include (a) aspects of export competitive advantage (e.g., firm export competence, export channel knowledge, product adaptation, competitive price, and distributor support), (b) environmental factors (e.g., hostility and price competition), and channel relationship antecedents (e.g., information exchange and cooperation). Implications of the findings are discussed.

Determinants of intention to purchase chicken in Italy: the role of consumer risk perception and trust in different information sources

Abstract: The article investigates how purchasing intentions among a sample of Italian consumers are influenced by different levels of risk perception and their trust in food-safety information provided by different sources such as the food industry, government agencies, or consumers' associations. The assessment of the determinants of intention to purchase was carried out by estimating a causal model for the chicken case in which attitudes, subjective norms, and perceived risk play a major role in determining buyer's behavior. In particular, the role of trust in influencing risk perception is highlighted either as a general construct or as specific constructs targeting food chain, policy actors, and the media. [EconLit citations: Q130, Q190, D120]. (C) 2008 Wiley Periodicals, Inc.

Collaborative pull innovation: origins and adoption in the new economy

Abstract: This article argues that collaboration has been a key piston in the engine that is driving economic growth in the new millennium. Innovation in information technology, institutions, and strategic reorientation of technological change has opened opportunity, and competition has put strong imperatives in play for collaborative innovation. First, these imperatives have forced a reorientation of private enterprise from push to pull systems. Second, they have catalyzed a strategic unbundling of integrated firms to create specialized enterprises with enhanced productivity and flexibility, though with increased demand for virtual integration through less formal relationships to establish and manage collaboration. This article presents the hypothesis that these changes induced a fundamentally new dynamic in innovation processes that we label as collaborative pull innovation. This new form of innovation encompasses and directs product, process, and organizational innovation toward fulfilling consumer demand. To examine this hypothesis, the nature of private-sector innovation is assessed within the context of the food sector. This sector is of special interest due to important roles played by small- to medium-sized enterprises. [JEL classification: L11, O31] [EconLit citations: L140, L200, O310]. r 2008 Wiley Periodicals, Inc.

Performance in vegetable supply chains: the role of Guanxi networks and buyer–seller relationships

Abstract: Guanxi is the lifeblood of the Chinese society. It also becomes a hot topic for achieving business success in China. The primary goal of this exploratory study is to empirically investigate the effect of guanxi networks on buyer?seller relationships and market performance for the Chinese vegetable sector. We interviewed 167 vegetable farmers (i.e., sellers) and 84 vegetable processing and exporting companies (i.e., buyers) in Jiangsu Province, P.R. China. The path analysis results reveal that guanxi networks in China directly and indirectly affect buyer-seller relationships and market performance; however, guanxi networks have different effects for vegetable sellers and buyers. Results demonstrate that vegetable sellers and buyers follow different approaches to achieve superior market performan

Costs and risks of conforming to EU traceability requirements: the case of hard red spring wheat

Abstract: European Union (EU) traceability requirements impose added costs and risks on suppliers. A stochastic simulation model is developed to determine optimal testing strategies and marginal costs to conform to EU traceability requirements for exports of non-genetically modified (non-GM) wheat from the United States. The optimal strategy is chosen to maximize an integrator's utility. Cost components include certified seed, certification and auditing, testing, traceability, quality loss, and a premium for the added risk of a dual traceability system over a single non-traceability system. Adventitious commingling risks are defined stochastically. Results indicate that traceability requirements can be conformed to with reasonable buyer and seller risk at a total cost of $18/non-GM mt. [EconLit Subject Descriptors: C150, C610, D810] © 2008 Wiley Periodicals, Inc.

Recent international and regulatory decisions about geographical indications

Abstract: As worldwide consumer demand for high-quality products and for information about these products increases, labels and geographical indications (GIs) can serve to signal quality traits to consumers; however, GI systems among countries are not homogeneous and can be used as trade barriers against competition. Philosophical differences between the European Union (EU) and the United States about how GIs should be registered and protected led to the formation of a World Trade Organization (WTO) dispute-settlement panel. In this article, we discuss the issues behind the dispute, the WTO panel decision, and the EU response to the panel decision leading to the new Regulation 510/2006. Given the potential for GI labels to supply consumer information, context is provided for the discussion using recent literature on product labeling. Implications are drawn regarding the importance of the panel decision and the EU response relative to GI issues yet to be negotiated under the Doha Round.

Producers' complex risk management choices

Abstract: Producers have a wide variety of risk management instruments available, making their choice(s) complex. The way producers deal with this complexity can vary and may influence the impact that the determinants, such as risk aversion, have on their choices. A recently developed choice bracketing framework recognizes that producers are unable to evaluate all alternatives simultaneously and that to manage a complex task, they often group or bracket individual alternatives and their consequences together in choice sets. Data on 1,105 U.S. producers show that producers do not use all available combinations of risk management tools and that the influence of the determinants of producer’s risk management decisions are not necessarily the same across risk management strategies within and across bracketing levels. The findings may help resolve puzzling results on the role that well-known determinants of risk management behavior have on producers’ choices, extending knowledge on producers’ risk management behavior. Further, the findings have managerial implications for policy makers and agribusiness companies that provide risk management services. [EconLit citations: M000, G1000, Q130] � c 2008 Wiley-Liss, Inc.

Management of perceived e-business risks in food-supply networks: e-trust as prerequisite for supply-chain system innovation

Abstract: Vertical coordination in food networks is characterized by dynamically changing supply and marketing relationships. E-business provides support and improvement options for vertical coordination processes in food networks. However, adoption of e-business in food networks is low as available e-business offers, as the communication of safeguards for trust and control as a basis for the transaction decision is not realized appropriately. This article analyzes decision preferences for trust generation as the basis for the design of e-business environments for food networks. The analytic hierarchy process is applied to prioritize preferences for different transaction scenarios in food networks. © 2008 Wiley Periodicals, Inc.

Asymmetric price transmission in the greek agri‐food sector: some tests

Abstract: This article employs a general-to-specific approach to analyze the price transmission mechanism between producers and consumers in the Greek agri-food sector. More specifically, the markets examined are vegetables, fruits and the whole food. Using cointegration techniques, two alternative dynamic models are estimated: an error correction model (ECM) and a LSE-Hendry general-to-specific model (GETS). The results indicate the existence of a long-run Granger–causality relationship running from producers to consumers in the vegetables market, while the opposite applies for food and fruits. In addition, asymmetric price transmission appears to apply for food and vegetables, but not for the fruit case. Both models agree upon the asymmetric nature of food and the symmetric nature of fruits but disagree for the case of vegetables. [JEL Classification: Q110, Q130] © 2008 Wiley Periodicals, Inc.

Determinants of competitive advantage for German food processors

Abstract: This article aims to explain the variation in firm performance in the German food processing industry. Building on the resource-based view, both drivers and outcomes of firm performance were defined as relative concepts. Performance was measured as relative return on assets and sales, relative change in sales, and by combining these variables into an integrated performance measure. Data for the analysis was gathered in an online firm survey and analyzed by means of nonparametric correlation and regression analysis. The survey response was very low and the sample may not be a good representation of the population. However, the results indicate that the main drivers for firm advantages lie within technology and production-related areas. They further suggest that with firm-specific variables, it is possible to explain as much as two-thirds of the variation in profitability. [Q130, L250, D240]. © 2008 Wiley Periodicals, Inc.

Firm, market, and regulatory factors influencing innovation and commercialization in Canada's functional food and nutraceutical sector

Abstract: Factors influencing the development and commercialization of functional food and nutraceutical (FFN) products are explored. Count data models are developed to relate firm, market, and regulatory covariates to the number of FFN product lines firms have under development, on the market, and in total. Canadian firm-level innovation data were taken from Statistics Canada (2003) Functional Food and Nutraceutical Survey. Firms involved in product development/scale-up had more product lines in total and on the market. Firms with a strong and positive perception of the impact of regulatory reform related to generic health claims and harmonization of Canadian regulations with U.S. regulations had fewer product lines in total and on the market. Firms with more positive perceptions of the business impact of structure and function health claims had more product lines on the market. One implication of the study is the importance of developing policies and reforming regulations which better enable use of generic health claims on FFN products. Further, policies which better enable or foster development/scale-up of product lines would increase the Canadian FFN sector's ability to develop new products. [EconLit: O130, L500, Q180]. © 2008 Wiley Periodicals, Inc.

Viability of introducing milk futures contracts in Brazil: a multiple criteria decision analysis

Abstract: The viability of introducing milk futures contracts in Brazil was assessed through a combination of multiple criteria decision analysis and the application of traditional principles from the theory of success and failure of futures trading. Commodity-specific attributes and market-related aspects were analyzed for chilled raw milk, ultra high temperature (UHT) milk, and milk powder. The analytic hierarchy process methodology was used to rank the commodities in terms of their feasibility prospects. Among them, it was ascertained that chilled raw milk is the most suitable for futures trading. Major reasons for this result are the product's high price volatility, the competitive nature of its markets, the absence of competing risk-management tools, and the impossibility of cross-hedging. Complementing the analysis, interviews were conducted with the 100 largest milk producers in the country to assess their perceptions regarding futures trading. Approximately 92% of these farmers expressed an interest in adopting milk futures contracts as price risk management tools. In conclusion, the analysis indicated that the introduction of a milk futures contract in Brazil has a high probability of success. [EconLit citations: Q130, C610, 0220]. © 2008 Wiley Periodicals, Inc.

Beyond agropiracy: the case of italian pasta in the United States retail market†

Abstract: Together with the benefit due to the worldwide increase in consumer interest in traditional European food style, a growing phenomenon of agropiracy has taken place. Firms' marketing strategies tend to concentrate on product purity while we believe there exists a well-defined path worth: 1. introduction of a traditional (original) product on international markets; 2. local firms' imitation of the successful good; 3. local firms redesigning original products according to local consumption models and preferences. A representative sample of American consumers were interviewed in 12 US cities. Econometric analysis results suggest that a strategy aimed at emphasizing the authenticity of the origin of any product may not lead to any improvement in its market share, but it might very likely affect that market as a whole. Products should be offered as part of a sort of traditional product package to promote food habits rather than just commodities. © 2008 Wiley Periodicals, Inc.

The Diffusion of Organic Food Products: Toward a Theory of Adoption

Abstract: This study explores drivers influencing food processors’ decisions to adopt organic practices and the constraints which may limit the availability of food products using the National Organic Program (NOP) organic seal as a marketing tool. A constrained diffusion model is applied to assess seal qualified adoption across food categories. A second model explores market forces that influence variations in the diffusion process. Results suggest that external factors, including new regulation, impact diffusion rates. Future adoption of organic practices will require enhanced informational and physical access for potential adopters. [EconLit citations O330, Q130, Q160]. r 2008 Wiley Periodicals, Inc.

Retailers' response to wholesale price changes: new evidence from scanner‐based quantity‐weighted beef prices

Abstract: Retailers are often criticized for a slow response in retail prices to changes in wholesale beef prices. The unresponsiveness, especially when wholesale and farm prices are declining, is seen as a lack of competitiveness and as a reason for congressional action to regulate behavior of processors or retailers. The validity of the historical analyses of retailer price responsiveness is questionable, however. Traditional Bureau of Labor Statistics (BLS) retail beef prices biased upward and do not account for large volumes sold at discounted prices. This article uses newly available scanner-based quantity-weighted retail prices to suggest that retailers' response to changes in wholesale beef prices is significantly larger and possibly quicker than is shown by traditional BLS measures of retail prices. Recent efforts to prompt legislation to regulate how firms behave along the beef supply chain, which are based only on arguments that retailers are not responding to price changes at the wholesale level, may be inappropriate. [L110, L660, D400] © 2008 Wiley Periodicals, Inc.

Upgrading of Lowland coffee in Central America

Abstract: A persistent fall of coffee prices in the 1990s brought the International Coffee Organisation, national governments, and coffee companies to propose the promotion of good quality highland coffee as the exclusive strategy for Central America to neutralize the negative income effects. This implies that cultivation on low- and medium-altitude lands should be discouraged, which means that 60% of the coffee growers and workers will lose their means of subsistence in this region. We have used a combined environmental-global commodity chain approach to question the new common wisdom. In buyer-driven chains, there are different quality attributes to satisfy consumers wants. As most food products, coffee receives quality premiums for both sensorial and non-sensorial credence characteristics. However, mass consumption markets in developed countries are served by powerful downstream roasters with blends that contain a major part of low sensory quality coffees. Market demand and a credence characteristic as the highly rewarded environmental friendliness should both be considered in assessments. This creates opportunities for lowland growers to stay in business and for mass coffee markets to become more sustainable. [Econlit: L660, Q170, Q560] © 2008 Wiley Periodicals, Inc.

Market integration and convergence to the law of one price in the North American onion markets

Abstract: The North American agricultural markets have become much more integrated; but the level of integration varies across sectors and over time. Differential tariff phasing-out periods and remaining trade disputes are two of many factors contributing to this. This article applies panel data unit root tests to study price convergence and market integration in the North American onion markets. Commodity and variety monthly base price data for the period of 1998 to 2006 are used. Empirical results decisively suggest the existence of price convergence across markets as well as onion varieties. A two-sample period analysis shows an increase in the speed of price convergence over time, suggesting deeper market integration as NAFTA was fully implemented. Further analysis based on a two-country-market basis found that U.S.–Canadian markets have experienced deeper market integration compared with U.S.–Mexican markets as well as Canadian–Mexican markets. [EconLit citations: F150, Q170]. © 2008 Wiley Periodicals, Inc.

A province-level analysis of economies of scale in Canadian food processing

Abstract: Cost functions of three Canadian food-processing sectors (meat, bakery, and dairy) are estimated using provincial data. A translog functional form is used, and the concavity property of the cost function is imposed locally. The Morishima substitution elasticities and scale elasticities are computed for different provinces. Inference is carried out using asymptotic theory as well as bootstrap methods. The evidence suggests that there are significant substitution possibilities between the agricultural input and other production factors in the meat and bakery sectors. Scale elasticities suggest that increasing returns to scale are present in the bakery and meat industries. To account for supply management in the dairy sector, separability between raw milk and other inputs was introduced. There exists evidence of increasing returns to scale at the industry level in the small producing provinces, but decreasing returns to scale in the two largest dairy provinces (Ontario and Quebec). [JEL Classification: D240, C300]. © 2008 Wiley Periodicals, Inc.

Do recommendations matter? social networks, trust, and product adoption

Abstract: Social network analysis allows researchers to capture the dynamics of social interactions, which may influence the impact of word of mouth advertising. This research seeks to combine a regression analysis of stated willingness to try a new food product with social network analysis. The goal of this article is to determine if variables that represent different aspects of group structure can better explain why some participants choose to adopt new food products while others do not. Our findings indicate that social network variables are a significant influence on a person's willingness to listen to a recommendation from someone else within their social network. Both the subject and the recommender's position in the network are influential. Additionally, the characteristics that impact willingness to listen to the recommendation vary depending on the food product studied. © 2008 Wiley Periodicals, Inc.

Public approval of plant and animal biotechnology in South Korea: an ordered probit analysis

Abstract: This study analyzes predictors of South Korean public acceptance of the use of biotechnology to create genetically modified food products. Results indicate that those consumers with above average knowledge of specific outcomes of genetic modification were more likely to approve of the use of plant or animal genetic modification for the creation of new food products than those with inaccurate or no knowledge. Moreover, younger South Korean consumers were more likely than older consumers to approve of the use of biotechnology to create both plant and animal based foods. Further, the study produced evidence of different levels of approval of biotechnology among consumers from different residential areas, income levels and political affiliation. Thus, those living in cities, those with incomes above 40 million Won, and those who described themselves as having a liberal political affiliation were found to have a higher approval level for animal biotechnology. [JEL Classification: Q13, M31, D12] © 2008 Wiley Periodicals, Inc.

Farm price and income policy: lessons from history

Abstract: U.S. farm commodity support programs encompass nearly three quarters of a century and three quarters of a trillion taxpayer dollars. One dividend from that effort is to learn lessons. Farm commodity programs have steadfastly maintained a primary objective of supporting the incomes of a relatively few producers of a relatively few commodities. Nonetheless, farm programs have not been static but have adapted to changing economic and political parameters. Changes in agricultural policy tend to coincide with extremes in the food supply–demand balance. Farm program income transfers leak from their intended beneficiaries to other asset owners. Economic rents, once institutionalized, retain political momentum that sustains the rents. The rise of pressure from the World Trade Organization to provide only non-market-distorting payments may challenge the continued viability of these lessons; however, the lessons also caution against discounting the extant political influence of the farm lobby. [EconLit N500, Q180]. © 2008 Wiley Periodicals, Inc.