Progress 07/01/01 to 06/30/04
Outputs
Labeling of GMO products has become a major issue worldwide, which can translate into a decrease for support of biotechnology products. Given this growing concern, the current study addressed the desire for labeling schemes to determine the premiums that consumers are willing to pay for each labeling scheme. In spite of consumers' rising concerns, results indicate that consumers were only ready to pay premiums that were, in fact, lower than those required to internalize the total costs of labeling estimated by previous studies. Mandatory labeling simply may not be an economically feasible alternative at this time (assuming it is financed only by consumers), if traceability costs, testing, and segregation costs associated with mandatory labeling are higher than the premiums that consumers are willing to pay. We must acknowledge that the obtained results are only applicable to the households who actually prefer one of two policies presented in this study. As a result, we
would expect that the mean WTP for the entire population for each of the policies would be even smaller. Consequently, it seems that the current FDA policy, which supports voluntary labeling of GM products, may still be a good market solution-as long as GM products are considered substantially equivalent to GM-free products. This shows that US consumers (for the most part) are fairly confident about the safety of food products approved by the FDA. For others, however, GM tests and regulations may not entirely account for the potential environmental externalities caused by the introduction of these crops in the natural environment. Finally, there are some for whom moral considerations should also be taken into account whenever public policy changes are being conducted. Thus, even though our results would seem to back the current FDA policy regarding voluntary labeling, in order to conduct a complete cost-benefit analysis, more needs to be known about the time-preferences of consumers
and potential future risks carried by GM crops. We encourage further studies that employ broader consumer samples and other viewpoints about GM food policy regulation. This would allow for more comparative reactions to GM foods and certification schemes.
Impacts
Direct marketing research on willingness-to-pay for various production attributes, local designation or producer-based certifications (GMO-free, hormone-free, antibiotic-free) has been highly valued by producers throughout the state, and is often used by producers going for private and public support for potential marketing ventures. Several producers have made marketing and business strategies directly based on findings from CSU, which have allowed them to succeed in their new business ventures. We hope to grow this into a Center for Value-Added Agriculture in the future since its potential impact on rural development opportunities (Thilmanys other area of research) is great. Other work that allows us to understand the national and international forces influencing price behavior, market performance for some potential Colorado products (tomatoes grown in hothouses, specialty cheeses) are less directly relevant for individual producers, but allow CSU to provide some
generalizable methods and findings for national and international industries.
Publications
- No publications reported this period
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Progress 01/01/03 to 12/31/03
Outputs
We did a vertical integration study of the potato market in the San Luis Valley. We explored expanding warehouse capacity into a new location while integrating into potato trucking. These investments are meant to overcome geographic, transportation and product degradation challenges in the valley. An additional warehouse/processing facility, located closer to potato resellers, will allow the cooperative to better meet customer needs, and decrease potato losses due to degradation. At issue is how much sales must increase, if at all, to warrant investment in the new facility. We presented our findings via a poster session at the AAEA annual meetings in August and at the NCR-194 cooperative meeting in October. We are continuing our work this next year by submitting two articles on the study and presenting our findings to the Colorado Potato Administrative Committee. We will also continue to look into other ways that the potato producers can further integrate their
markets. We completed publication of willingness-to-pay for natural meat products this year, with a focus on how purchase behavior may vary in urban and rural areas. Subsequently, Thilmanys research in this area has been expanded to explore whether consumers shopping choices are influenced by the type and variety of products that stores carry, an issue of interest to Colorado Homestead Ranches as they expand retail operation under a new USDA Value-Added Grant. This year will also see the culmination of two joint Experiment Station/Cooperative Extension projects: 1) niche marketing for beef producers and 2) CSUs potential role in supporting alternative agricultural producers. I will continue to provide presentations, programming and technical support to a variety of agricultural and specialty food producers in the areas of niche marketing, agribusiness management and distribution/retailing activities. These activities have increased our departments and CSUCEs impact among producers
with non-commodity and alternative production and marketing interests, as well as professionals and businesses in specific segments of the broader food industry (chefs, small food processors, specialty retailers). The Niche Beef Curriculum: I have played a role in developing this curriculum, together with American Farmland Trust and collaborators from CSU, it will provide a nice resource for those wanting to manage their personal brand and I look forward to interacting with producers and supporters of those producers (Extension, Economic Development professionals) in a series of workshops this Spring. This work also supports several regional and county-based personnel, Colorado Department of Agricultures Markets division, Chefs Collaborative and the Slow Food chapters in Denver and Fort Collins. My future directions in this area may move from purely business technical assistance to some local food policy and nutrition/consumer education focus.
Impacts
Direct marketing research on willingness-to-pay for various production attributes, local designation or producer-based certifications (GMO-free, hormone-free, antibiotic-free) has been highly valued by producers throughout the state, and is often used by producers going for private and public support for potential marketing ventures. Several producers have made marketing and business strategies directly based on findings from CSU, which have allowed them to succeed in their new business ventures. We hope to grow this into a Center for Value-Added Agriculture in the future since its potential impact on rural development opportunities (Thilmanys other area of research) is great. Other work that allows us to understand the national and international forces influencing price behavior, market performance for some potential Colorado products (tomatoes grown in hothouses, specialty cheeses) are less directly relevant for individual producers, but allow CSU to provide some
generalizable methods and findings for national and international industries.
Publications
- Grannis, J., Thilmany, D. and Sparling, E. 2003. Regional Demand for Natural Beef Products: Urban vs. Rural Willingness to Pay and Target Customers. Forthcoming, Journal of Agribusiness, 21(December):149-166.
- Grannis, J., Hine, S. and Thilmany, D. 2003. Marketing Premium Food Products in Emerging Economies: The Case of Macedonian Cheese. Journal of International Food and Agribusiness Marketing. 13(Summer 2001):59-76 (Early 2003 actual publication date
- Padilla-Bernal, L. and Thilmany, D. 2003. Price Relationships among North American Fresh Tomato Markets: A Comparison between Mexican and U.S. Markets. International Food and Agribusiness Management Review, 5(Fall 2003). Online publication with no assigned page numbers.
- Loureiro, M.L., Umberger, W. and Hine, S. 2003. Testing the Initial Endowment Effect in Experimental Auctions. Applied Economics Letters. 10, 271-275.
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Progress 01/01/02 to 12/31/02
Outputs
In 2002, a study has been conducted in order to assess marketing opportunities for local vegetable producers. Data was gathered with Dr. Susan Hine in 2001-2002 in a consumer survey about Colorado vegetables. In this research project, the overall consumer response toward different labeling programs was analyzed. Among the different labeling strategies considered, the mean willingness to pay for "Colorado Grown", "Organic" and "Genetically Modified-Free" potatoes were calculated. Additionally, two new research projects were designed and started. The first project deals with the implications of the new country of origin labeling regulation for domestic beef products in the marketing of US beef. A consumer survey will be sent to 2,500 households in the western United States. A preliminary survey was conducted in Colorado, and results obtained from this sub-sample indicate that Coloradoans are willing to pay substantial premiums to obtain beef labeled as "U.S. certified
beef." Thus, preliminary evidence shows that there exists a niche market for US beef. The second research project analyzes the role played by different risk perceptions (environmental, health, and ethical considerations) in the marketing of genetically modified crops. At the moment, a consumer survey that analyzes the effects derived from perceived risks is in the field. The area of study is the western United States. Preliminary results are not available at the moment. This Agricultural Experiment Station project has also sponsored part of the research time employed by the PI on other working papers in the area of niche marketing. In particular, during 2002, the revisions for the articles indicated below were completed, and these articles were successfully accepted for publication.
Impacts
The results of this Agricultural Experiment Station project will help producers and marketers of the state to identify niche market opportunities for different products, as well as their best advertising strategies. Furthermore, results from the different empirical cases were presented in professional meetings and are being cited by other professionals working in the field. The main research findings are shared with extension specialists and growers through extension newsletters or reports made directly available to the different groups.
Publications
- Loureiro, M.L. and Hine, S. 2002. Discovering niche markets: a comparison of consumer willingness to pay for local (Colorado grown), organic and GMO-free products. Journal of Agricultural and Applied Economics. 34(4): 477-487. December.
- Loureiro, M.L., McCluskey, J.J. and Mittelhammer, R. 2002. Will consumers pay for eco-labeled apples. Journal of Consumer Affairs. 36(2): 203-219. December.
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Progress 01/01/01 to 12/31/01
Outputs
A study has been conducted in order to assess consumer response toward value-added products. Initial research involved potatoes and vegetable producers in the state of Colorado looking at new ways of marketing their products. A consumer survey was conducted in the main locations of the State of Colorado. Socio-demographic characteristics that affect consumer preferences and affect consumers' willingness to pay for certain attributes were identified. Results suggest that the attribute 'Colorado Grown' carries a higher willingness to pay than organic and GMO-free attributes when marketing potatoes and vegetables in the State of Colorado.
Impacts
The results of this project will help producers and marketers of the state to identify niche market opportunities for their products, as well as their best advertising strategies. Results are also applicable to other producers in other states looking at creating niche-marketing strategies.
Publications
- No publications reported this period
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