ECONOMIC IMPACTS OF CHANGING ANIMAL WELFARE PRACTICES FOR U.S. LIVESTOCK PRODUCTION

• Sponsoring Institution: National Institute of Food and Agriculture
• Project Status: COMPLETE
• Funding Source: HATCH
• Reporting Frequency: Annual
• Accession No.: 0222354
• Project Start Date: May 1, 2010
• Project End Date: Sep 30, 2014
• Program Code: [(N/A)]- (N/A)

Recipient Organization
PURDUE UNIVERSITY
(N/A)
WEST LAFAYETTE,IN 47907

Performing Department
Agricultural Economics

Non Technical Summary
Consumers today are increasingly sensitive to the processes employed in food production. In particular, livestock products evoke consumer sentiment regarding the treatment and welfare of the animals in the production processes for meat and milk products (Frewer et al., 2005). As producers are facing changes in the production processes available for use in their operations, economic impacts on the cost of production, welfare of producers, and welfare of consumers must be assessed.

Animal Health Component

(N/A)

Research Effort Categories

Basic

(N/A)

Applied

(N/A)

Developmental

(N/A)

Classification

Knowledge Area (KA)	Subject of Investigation (SOI)	Field of Science (FOS)	Percent
315	3910	3010	30%
601	3910	3010	40%
607	3910	3010	30%

Knowledge Area
601 - Economics of Agricultural Production and Farm Management; 607 - Consumer Economics; 315 - Animal Welfare/Well-Being and Protection;

Subject Of Investigation
3910 - Cross-commodity research--multiple animal species;

Field Of Science
3010 - Economics;

Keywords

consumer willingness to pay

producer willingnes to change

consumer demand

animal welfare

production process attributes

producer welfare

consumer welfare

Goals / Objectives
The primary goal is to advance understanding of the economic impacts of changes in the livestock production system initiated to increase or enhance the welfare of farm animals (e.g., housing systems used in swine production and dairy production processes such as tail docking or access to pasture). The specific objectives of this research are: (1) Examine the implications of animal welfare attributes of production systems for efficient production of livestock products; (2) Understand the potential economic impacts of adoption of animal welfare attributes in existing production systems; and (3) Evaluate potential costs and returns of investment in various potential animal welfare production attributes in a range of production systems currently used in livestock production.

Project Methods
To address the general goal of the proposed research requires an interdisciplinary approach in order to explicitly link the productivity of livestock species (e.g., productivity levels of swine, dairy cattle, or poultry management systems) when managed under different production systems and the associated economic consequences of those production system decisions. Specifically, interdisciplinary cooperation is needed to explicitly account for the impacts of alternative handling or management processes used on the productivity of livestock and the associated changes in cost structures of production systems. For example, providing dairy cattle with access to pasture for a specified number of hours per day may yield differences in incidence of lameness (and associated costs) as well as have an impact on milk production (and associated revenues), among many other impacts. Other potential factors for consideration include housing systems, labor requirements, feed efficiency, and productivity under various housing systems for swine or dairy production. Survey mechanisms, and in particular, the use of choice experiments to aid in determining individual's preferences is expected to be used. Choice experiments involve asking individuals to choose from alternative bundles of attributes, as opposed to rating or ranking them (Adamowicz et al., 1998). Choice experiments simulate real-life situations and permit multiple attributes to be evaluated, thereby allowing estimation of tradeoffs among different alternatives (Lusk, Roosen, and Fox, 2003). There are several examples of choice experiments used to determine consumer valuation and preference for livestock products produced under different production systems (Carlsson, Frykblom, and Lagerkvist, 2007a-b; Lijenstolpe, 2008; Lusk, Norwood, and Pruitt, 2006; Tonsor, Olynk, and Wolf, 2009). Upon beginning to understand producer and consumer preferences for production process attributes, potential for and economic impacts of adoption of various welfare-friendly attributes (or combinations of welfare-friendly attributes) can be explored. In order to evaluate the potential costs and returns of investments in animal welfare production process attributes, the preferences for various attributes and willingness to adopt various attributes must be determined. Once preferences for attributes have been identified, potential costs and returns of producer investment in implementing some of the changes preferred by consumers can be assessed. The actual returns to a producer for adoption of animal welfare-friendly handling techniques, for example, will be dependent on the size of the market, cost of provision, and willingness to pay by consumers, among other factors. Consumer preference alone does not enable estimating of the return expected for producers who may adjust their production processes to provide sought-after production process attributes. The number of producers (or relative proportion of producers) willing to provide that production process attribute to the market is also key in determining the return that producers can expect for providing these goods to the market.

Progress 05/01/10 to 09/30/14

Outputs
Target Audience: Target audiences for this reporting period include: Dairy Producers and dairy industry consultants/educators Pork Producers Pork Processors Beef Producers Beef Processors Meat Science Association and affiliated industry representatives Various consumer groups interested in livestock animal welfare Maddie's Fund - Organization focused on welfare and adoptions of pet animal species Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Training to various graduate students (including two who have worked on this area of research as their main area of study) as well as undergraduate students in various capacites. Output from this project has been utilized in various guest lectures for undergraduate students within the College of Agriculture as well as for lectures and seminars to colleagues. Further, various face-to-face meetings have taken place with researchers across the various institutions involved to futher knowledge and capabilities in addressing these questions. How have the results been disseminated to communities of interest? Results have been disseminated to livestock producers (mainly dairy producers and pork producers), industry groups at various meetings across the U.S., and to interested consumers via popular press materials and numerous interactive presentations given in various settings. In addition, decision tools and information generated from this project have been employed in numerous producer training activities and educational semianrs/meetings. What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? Specific goals accomplished include the estimation of consumer willingness to pay for yogurt, ice cream, ham, and ham lunchmeat when produced under various production systems. Specifically individual crates and stalls for pigs, pasture access for pigs and cattle, and verification by industry versus USDA sources have been studied. Specific objectives (1) and (2) have been accomplished for several livestock products.Further, economic impacts of adoption of animal welfare attributes within conventional systems have been evaluated for pork production. Potential costs and returns of investments in "animal friendly" systems have been calcualted for a range of possible investment levels and for a range of possible operating systems; such findings can be utilized in decision making by pork producers and processors when considering investment in technologies for future production.

Publications

• Type: Journal Articles Status: Published Year Published: 2014 Citation: McKendree, M.G.S., C. Croney, and N.J. Olynk Widmar. 2014. Current factors influencing perceptions of animals and their welfare. Journal of Animal Science. 92:1821-1831.
• Type: Journal Articles Status: Published Year Published: 2014 Citation: McKendree, M.G.S., C. Croney, and N.J. Olynk Widmar. 2014. Effects of demographic factors and information sources on United States consumer perceptions of animal welfare. Journal of Animal Science. 92:3161-3173..
• Type: Journal Articles Status: Published Year Published: 2013 Citation: McKendree, M. G. S., N. Olynk Widmar, D. L. Ortega, and K. A. Foster. 2013. Consumer Preferences for Verified Pork-Rearing Practices in the Production of Ham Products. Journal of Agricultural and Resource Economics. 38:397-417.
• Type: Other Status: Published Year Published: 2013 Citation: McKendree, M. G. S., D. Widmar, and N. J. Olynk Widmar. 2014. Quantifying Consumers Perceptions of Lean Finely Textured Beef. Working Paper #14-3. Purdue University, Department of Agricultural Economics.
• Type: Other Status: Published Year Published: 2013 Citation: McKendree, M.G.S. and N. J. Olynk Widmar. Consumer Perceptions of Livestock Products and Animal Welfare. Center for Food and Agricultural Business Research Paper. CAB RP 13.1. July 2013.
• Type: Journal Articles Status: Published Year Published: 2014 Citation: 3. Olynk Widmar, N.J. and D. L. Ortega. 2014. Comparing Consumer Preferences for Livestock Production Process Attributes Across Products, Species, and Modeling Methods. Journal of Agricultural and Applied Economics. 46:375-391.

Progress 10/01/12 to 09/30/13

Outputs
Target Audience: Target audiences for this reporting period include: Dairy Producers Pork Producers Meat Science Association and affiliated industry representatives Various consumer groups interested in livestock animal welfare Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? The project has provided numerous graduate students with mentoring and training opportunities in working with researchers on the project. Further, various face-to-face meetings have taken place with researchers across the various institutions involved to futher knowledge and capabilities in addressing these questions. How have the results been disseminated to communities of interest? Results have been disseminated to livestock producers (mainly dairy producers and pork producers), industry groups at various meetings across the U.S., and to interested consumers via popular press materials and numerous interactive presentations given in various settings. What do you plan to do during the next reporting period to accomplish the goals? Next reporting period we will be looking at a wider range of livestock products and working to evalute the costs/revenues associated with integrating various animal welfare enhancing practices into conventional systems.

Impacts
What was accomplished under these goals? Specific goals accomplished include the estimation of consumer willingness to pay for ham, ham lunchmeat, yogurt, and ice cream products (among other meat and dairy products) for animal welfare attributes of various production systems. Further, economic impacts of adoption of animal welfare attributes within conventional systems have been evaluated for pork production. Specific objectives (1) and (2) have been accomplished for several livestock products.

Publications

• Type: Theses/Dissertations Status: Accepted Year Published: 2013 Citation: McKendree, M.G.S. 2013. Exploring Consumer Preferences for Animal Care and Rearing Practices Across Species and Products. Purdue University, Master of Science Thesis.
• Type: Other Status: Accepted Year Published: 2013 Citation: McKendree, M.G.S., N.J. Olynk and D.L. Ortega. Consumer Preferences and Perceptions of Food Safety, Production Practices, and Food Product Labeling: A Spotlight on Dairy Product Purchasing Behavior in 2011. Center for Food and Agricultural Business. CAB RP 12.1.

Progress 10/01/11 to 09/30/12

Outputs
OUTPUTS: Recent attention to animal well-being and animal rearing techniques which are considered humane has fueled a fierce debate between livestock producers and consumers, as well as among livestock producers. The objective of this ongoing work is to determine consumer preferences for key production practices in the production of ham and ham lunchmeat. In the past Dr. Olynk has assessed consumer preferences for the handling and treatment of cows used to produce fluid milk for sale; then, the focus was shifted to ice cream and yogurt. This year ham and ham lunchmeat were the products chosen for investigation into consumer preferences for hog handling and rearing practices. A total of 800 surveys were administered to a representative sample of the US population in June of 2012. The current focus of this work is on estimating consumer willingness to pay for ham and ham lunchmeat produced from pigs with access to pasture and from pigs not treated with antibiotics. Labeling and verification schemes are important in this analysis, and consumer trust in various verification mechanisms are being assessed. Thus far dissemination of information has been completed through a number of presentations offered both within and outside of the university. Specifically, results have been disseminated to various audiences including audiences through the Center for Food and Agricultural Business and at the Westfield Insurance Agribusiness Exchange, 2012. Analysis and development of further outreach materials is ongoing. PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: Livestock producers and the food processing/retail industry PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
Research being completed currently (resulting from the above survey work) seeks to determine consumer preferences for attributes of swine production systems when purchasing ham and ham lunchmeat (by the pound). Through this work we will discover consumer preferences for pork production process attributes. Previous work completed has focused on dairy products. By addressing pork products, knowledge can be obtained on consumer preferences for swine treatment and handling, informing both producer and consumer decision making processes.

Publications

• Olynk, N. J. and D. L. Ortega. 2012. "Consumer Preferences for Verified Dairy Cattle Management Practices in the Production of Yogurt and Ice Cream." Food Control, 30:298-305.

Progress 10/01/10 to 09/30/11

Outputs
OUTPUTS: Recent attention to animal well-being and animal rearing techniques which are considered humane has fueled a fierce debate between livestock producers and consumers, as well as among livestock producers. The objective of this ongoing work is to determine consumer preferences for key production practices. In the past Dr. Olynk has assessed consumer preferences for the handling and treatment of cows used to produce fluid milk for sale; this year the focus was redirected towards ice cream and yogurt. A total of 1000 surveys were administered to a representative sample of the US population. Approximately 25% of the sample was from Southeastern United States, 20% Northeast, 10% Southwest, 19% West, 26% Midwest and less than 1% from Alaska and Hawaii. When asked how much fluid milk their households purchase in a typical week 9% reported that they purchase no milk, 46% 1 gallon or less, and 45% over 1 gallon of fluid milk. The majority of respondents either purchase two percent reduced fat milk (40%) or whole milk (26%), while 18% buy fat free skim milk and 16% purchase one percent low fat milk. The current focus of this work is on estimating consumer willingness to pay for milk produced from cows with access to pasture and from cows not treated with antibiotics. Labeling and verification schemes are important in this analysis, and consumer trust in various verification mechanisms are being assessed. Thus far dissemination of information has been completed through a number of presentations offered both within and outside of the university. I have employed Audience-Response technology (Clickers) in a number of presentations in which findings were being disseminated to producers and other stakeholders to foster audience interaction. Specifically, results have been disseminated to various audiences including to young farmers and ranchers at the Indiana Farm Bureau 2011 Young Farmer Leadership Conference in January of 2011, dairy producers at the Indiana Milk Quality Conference in Fort Wayne, IN in April of 2011, and audiences through the Center for Food and Agricultural Business. Analysis and development of further outreach materials is ongoing. PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: Nothing significant to report during this reporting period. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
Research being completed currently (resulting from the above survey work) seeks to determine consumer preferences for attributes of dairy production systems when purchasing yogurt (in 6 oz containers) and ice cream (in pint containers). Through this work we will discover consumer preferences for milk production process attributes for yogurt and ice cream. Previous work completed has focused, almost exclusively, on fluid milk consumption. By addressing milk products, knowledge can be obtained on consumer preferences for dairy products versus fluid milk, informing both producer and consumer decision making processes. Further, comparisons between yogurt and ice cream - to fluid milk - will enable increased information to be obtained on the differences in consumer sentiment for varying products.

Publications

• No publications reported this period

Progress 05/01/10 to 09/30/10

Outputs
OUTPUTS: Informing on-farm decisions, and assessing the implications of such decisions on agricultural sectors and consumers, more broadly, requires an integrated approach which incorporates both the biological processes underlying the production systems employed on farms and the economic implications of various input procurement, technology employment, or production practice usage decisions. The current research focuses on both, 1) informing on-farm decision making surrounding technology adoption, input procurement, and the adoption of optimal production practices for various on-farm scenarios, and 2) incorporating producer and consumer preferences for various production process attributes (i.e., animal welfare-friendly attributes, emissions mitigation technology adoption/climate-friendly practices on livestock operations) into on-farm decision making. Outputs of this project thus far focus primarily on educating agricultural producers in the areas of on-farm decision making, potential costs and benefits of alternative production practices, and providing insight into the implications of changing consumer demand and preferences for production practices, specifically those used in rearing livestock for meat and milk markets. Thus far dissemination of information has been completed through a number of presentations offered both within and outside of the university. I have employed Audience-Response technology (Clickers) in a number of presentations in which findings were being disseminated to producers and other stakeholders to foster audience interaction. Multiple presentations have been given on related material, including talks to agribusiness groups, farm bureau audiences, producers, and input suppliers seeking to learn additional information about the changing needs of the producers whom they serve. PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: Livestock producers PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
Research currently underway seeks to determine consumer preferences for attributes of dairy production systems when purchasing yogurt. Through this work we will discover consumer preferences for milk production process attributes for yogurt. Previous work completed has focused, almost exclusively, on fluid milk consumption. By addressing milk products, knowledge can be obtained on consumer preferences for dairy products versus fluid milk, informing both producer and consumer decision making processes.

Publications

• No publications reported this period