Performing Department
Horticulture and Landscape Architecture
Non Technical Summary
Consumers and retailers have responded to the spotlight on fresh produce, resulting in increased purchases, marketing resources and even new legislation to promote Specialty Crop production in the US. Between 1987 and 2000, US per capita consumption of fresh fruits and vegetables rose 15%. Retailers have responded by increasing the size and range of produce sold. The increased popularity of fresh produce represents considerable potential for enhanced marketing revenues to producers if they can recognize and harness opportunities emerging from changes in food purchases. In recent years, increasing numbers of consumers have shown increased interest in foods produced in unique ways, including organic, local, pesticide free, Fair Trade or as functional foods. These individuals and households are also fueling changes in the food system as they seek to purchase their produce through channels as diverse as direct marketing and traditional supermarkets, and with expectations as broad as picking their own produce to highly branded products with 3rd party certifications. This evolution has led a higher number of farmers to consider new marketing strategies including farmers markets, joining a producer alliance, running a Community Supported Agriculture (CSA), beginning their own value-added ventures or producing new crops and cultivars to gain access to specialty niche markets. Little is known about the response of increasingly demanding consumers and food supply chain partners, the changing coordination and supply chain responses of fruit and vegetable enterprises or the response to regulations and policies developed to oversee and guide new innovations in this sector. I * The potential impacts of this work will be in three realms; market information, recommendations on improved marketing performance and insights on costs and benefits of value to policymakers that are considering oversight, grading and certification programs to enhance market activities. * In another case, the need for COOL policies for the full array of food products was motivated by various studies conducted to evaluate potential consumer benefits from labels on source of production. Again, the team's exploration of consumer values associated with labeling strategies would be an impact to those evaluating the program in the future. Finally, a small subteam is interested in the economic impact of some niche supply chains (farmers markets, direct sales wineries). * This focus on economic impact and the new USDA program focused on knowing your farmer also connects well with the relationship several team members have with the Market Maker online directory of producers.
Animal Health Component
(N/A)
Research Effort Categories
Basic
(N/A)
Applied
(N/A)
Developmental
(N/A)
Goals / Objectives
Develop demand and market valuation models for the produce sector that can be used to evaluate effects of increasingly complex product differentiation schemes (organic, enhanced health claims, biodynamic), trade, commodity marketing programs, labeling programs (local, food miles, Fair Trade), traceability systems, and food safety events in the U.S. produce markets.
Analyze the relative benefits and costs, to producers and consumers, of government and industry-led marketing and policy programs (certifications, Leafy Greens marketing order, Country of origin labeling, farmers markets) using both theoretical approaches and empirical evidence from multi-state applied research projects.
Assess the changing coordination and supply chain management strategies being implemented in the fruit and vegetable sector and identify strategic organizational and marketing implications for a set of firms that are diverse in terms of commodity, marketing approach and size of operation (including small and mid size farms).
Project Methods
In produce marketing applications, there are often a large number of product offerings with a wide variety of product characteristics. In order to make policy statements about optimal product assortment or design of new products, it is important to allow for product characteristics or attributes to enter the utility function. There is a consensus emerging from both the developers and appliers of these models to treat product characteristics as endogenous. As with price, product characteristics are typically choice variables of firms, and as such one might worry that they are actually correlated with unobserved components of demand. Participants from Georgia, Florida, Idaho, Indiana, Maine, Nevada, New York, and the USDA will collaborate on fruit and vegetable demand analysis with special emphasis on organics. Methods will include conventional and/or discrete choice demand analysis as well as state-of-the-art price analysis. Methods used to understand the benefits of industry-led marketing programs are also evolving, and one approach that has become increasingly popular and effective involves economic experiments. Economic experiments are divided into treatments, and each treatment examines how consumers (or producers) respond to a change in prices, products, policies, promotional efforts, and other marketing factors. Many of the current and new members in this regional research group have access to labs designed for experimental economics and decision research, and there may be room to replicate, or expand the number of, treatments within an experiment across institutions. A subgroup of the committee intends to coordinate experiments across states (all which have their own programs) from this point forward so that comparative analyses are also possible. The analysis of coordination and management strategies entails a broad range of empirical methods including semi-structured case studies, descriptive assessments, econometric analysis, and simulation techniques. The particular method chosen will vary depending on the context of the specific issue and the data available. Coordination among researchers in multiple states will provide a richness of detail for comparison that is often not achievable through individual efforts. Outcomes are expected to include assessment of changing agri-food structure on competitiveness of U.S. industries. This information is critical for business success, either directly or indirectly, as the balance of power within the marketplace shifts.In Colorado, Delaware, Florida, Georgia, Idaho, Indiana, Kentucky, Maine, Michigan, New Jersey, New York, Nevada, Ohio, Oklahoma, Pennsylvania, and West Virginia team members will develop case studies and best practice research focused on how evolving marketing strategies (buy local campaigns, regional food hubs, organics, marketing orders and retail partnerships) impact the competitiveness and performance of fresh produce enterprises.