The many factors that influence decision-making at the farm and throughout the food system related to animal welfare and responsible production practices were dominant themes at the 2013 Ohio Livestock Coalition (OLC) Annual Meeting and Industry Symposium held in Columbus.
“Ohio’s farming community is committed to ongoing innovation and improvement, so understanding the needs of today’s consumers and customers, and tomorrow’s agricultural leaders, is vital to our continued success,” said David White, OLC executive director. “The annual meeting provides farm organization leaders and farmers from across Ohio with a venue to hear from state and national agriculture leaders on key issues, and provides an opportunity to engage in constructive dialogue and education that help us plan for the future.”
David Fikes, vice president of consumer/community affairs and communications for the Food Marketing Institute, discussed the role of the farm community in helping food industry stakeholders achieve their social responsibility goals to meet consumer expectations.
“The amount of information consumers feel entitled to know about products they purchase is now moving at the speed of the Internet and is dramatically changing the nature of the relationships between producers, manufacturers, retailers and customers,” Fikes said. “The frequent result is a collision of consumers’ right-to-know and expectation of transparency on one hand and a supplier’s proprietary information and operational standards on the other.”
Few think about the role that retail plays as more or less the middle-man for the relationships and conversations between those that produce food and those that consume it.
“On good days our position feels like a bridge that we as retailers present the product to the consumer and they give us inputs and feedback that we can give back to the producers,” Fikes said. “On bad days, it feels like we are caught in a vice of consumers wanting us to tell the producers how their food ought to be produced and producers telling us to tell the consumer how food is going to be produced.”
Fikes says the worst days are when consumer groups think his organization should be able to perform miracles and represent those consumer groups and force their interest and issues onto the way producers do their work.
Dr. Glynn Tonsor, associate professor at Kansas State University’s Department of Agricultural Economics, discussed the growing consumer interest in animal welfare practices and how public perceptions and expectations impact animal agriculture and the food system.
“The economic implications of growing public interest in animal welfare and subsequent responses by the meat and livestock supply chain are growing and diverse,” Tonsor said. “Growing public interest is appearing in the form of meat demand impacts, growing product differentiation efforts, and production restrictions following regulatory and legislative adjustments. Understanding the economic impact of animal welfare discussions on individual firms as well as global comparative advantages is imperative for sound decision making of today’s meat and livestock industry operators and managers.”
With changes in food production comes higher costs in the meat case. Tonsor says consumer choices are swayed by the price tag more times than not, but for some, price is not an object.
“There’s massive heterogeneity out there,” Tonsor said. “An example is a beef roast. There are certain consumers out there that you could literally give them a beef roast and they wouldn’t take it home because they don’t think it is a convenient product. So price isn’t the only thing that will gauge consumer choice.”
When it comes to actual animal welfare issues and consumer choice, Tonsor uses cage-free eggs as an example. Less than 5% of the eggs in the U.S. are cage-free, yet there is a working market for less than 5% and those people will pay a huge premium and absorb the higher production cost.
“Where the economics get a bit messy is if you try to impose the cage-free product on the entire population, which is a result of bans and restrictions,” said Tonsor. “Now you are imposing a higher egg cost on everyone, even if they aren’t willing to pay that premium.”
Tonsor also mentioned during the symposium that higher productions costs are nothing new to animal agriculture. Food safety protocols and EPA restrictions have production cost impacts that, in many ways, are just the cost of doing business in the U.S.