Progress 10/01/18 to 09/30/19
Outputs
Target Audience:Extension agents with farm management and livestock responsibilities, state government officials and private sector (poultry industry) management and executives. Changes/Problems:
Nothing Reported
What opportunities for training and professional development has the project provided?
Nothing Reported
How have the results been disseminated to communities of interest?Yes through the publication of scientific journal articles. What do you plan to do during the next reporting period to accomplish the goals?Since this is the final report, no future activities on this specific project are planned.
Impacts
What was accomplished under these goals?
Under major goals (3) first we investigated whether consumers are willing to pay a premium price for animal welfare attributes of foods they eat. To answer this question, we carry out a hedonic analysis of the retail eggs prices in Croatia. Scientific evidence clearly supports the notion that birds' wellbeing is higher in cage-free systems than in a typical cage system. Therefore, there is a clear link between production systems and animal welfare. We use the retail level monthly data for 2017 on sales quantities and unit values of all fresh egg SKUs from all stores belonging to one of the largest retail chains in the country. The estimation results of the equilibrium hedonic price equation model shows that, holding other attributes constant, the clean price premium for cage-free eggs is 15 cents per 10-egg carton or 7.8 percent of the retail price. Although the implicit price premium for cage-free eggs is relatively modest, there are not that many people actually willing to buy them. Because only 2.2% of all eggs sold by the retail chain were actually cage-free, the average per-person willingness to pay for cage-free eggs is only 0.3 cents for a 10-egg carton. Under major goals (3) second,In this paper, we investigate sorting patterns among chicken producers who are offered a menu of contracts tochoose from. We show that the sorting equilibrium reveals a positive sorting where higher ability producersself-select themselves into contracts to grow larger chickens and lower ability types self-select themselves intocontracts to grow smaller birds. We also show that eliciting this type of sorting behavior is profit maximizingfor the principal. In the empirical part of the paper, we first estimate growers' abilities using a two-way fixedeffects model and subsequently use these estimated abilities to estimate a random utility model of contract choice. Our empirical results are supportive of the developed theory.
Publications
- Type:
Journal Articles
Status:
Under Review
Year Published:
2019
Citation:
T. Vukina and D. Nestic. Paying for Animal Welfare? A Hedonic Analysis of Egg Prices. Agribusiness: An International Journal
- Type:
Journal Articles
Status:
Published
Year Published:
2019
Citation:
Wang, Z. and T. Vukina. Sorting into Contests: Evidence from Production Contracts. The B.E. Journal of Economic Analysis and Policy, 19 (1) (Jan. 2019) DOI: https://doi.org/10.1515/bejeap-2018-0049
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Progress 10/01/17 to 09/30/18
Outputs
Target Audience:Extension agents with farm management and livestock responsibilities, state government officials and private sector (poultry industry) management and executives. Changes/Problems:
Nothing Reported
What opportunities for training and professional development has the project provided?There could be an opportunity to develop training modules for hatchery managers. How have the results been disseminated to communities of interest?The effort in this period resulted in the publication of one scientific jourmal article, one Ph.D. dissertation and two conference papers. What do you plan to do during the next reporting period to accomplish the goals?In collaboration with few other regional project members, we started work on the project entitled:"One-two Punch For Organic Poultry Processing: Knocking Out Foodborne Pathogens With Plant Derived Antimicrobials And Featuring Specialized Food Safety And Processing Training" that has been funded by the US Dept. of Agriculture (USDA) - Agriculture Research Service. We expect some preliminary results released in the next reporting period.
Impacts
What was accomplished under these goals?
Two important things were accomplished: First, we investigate whether consumers are willing to pay a premium price for animal welfare attributes of foods they eat. To answer this question, we carried out a hedonic analysis of the retail eggs prices coming from a large retail chain in Croatia. Scientific evidence clearly supports the notion that birds' wellbeing is higher in cage-free systems than in a typical cage system. Therefore, there is a clear link between production systems and animal welfare. We use the retail level monthly data for 2017 on sales quantities and unit values of all fresh egg SKUs from all stores. The estimation results of the equilibrium hedonic price equation model shows that, holding other attributes constant, the clean price premium for cage-free eggs of 8 percent of the retail price. The results also show that the cage-free premium is even higher for consumers with annual income 20% higher than the national average. Second, we investigated the impacts of hatchery management practices on performance of turkey poults. Early poult mortality is a widespread problem in the turkey industry resulting in potential loss of profits and animal welfare concerns. In this study, factors related to pre-placement mortality (PPM), first week mortality (FWM) and cumulative early mortality (CEM) were investigated. Field data collected from six US hatcheries, for a total of 3,562 shipments from various breeder flocks delivered to a total of 1,051 customers over a 22-month period, were analyzed using the ordinary least squares (OLS) regression analysis. PPM was found to be significantly related to hatchery, season and distance traveled from hatchery to farm and FWM and CEM were found to be significantly related to hatchery, season, hatch day, gender, breeder age and distance traveled. Assuming the average truck delivery of 17,000 poults and the average poult cost of $2.00, the counterfactual cost analysis showed that the extra production costs from poult mortality due to young stage breeders ranged from $60 to $128 and each 500 miles of travel from hatchery to brooder farm costs an extra $170 per truck delivery. The results indicate that modifications in management practices coordinated between breeder farms, hatcheries and brooder farms could reduce early poult mortality, leading to cost savings and increased profitability.
Publications
- Type:
Journal Articles
Status:
Published
Year Published:
2018
Citation:
Oh, S.E. and T. Vukina. Substitutability between Organic and Conventional Poultry Products and Organic Price Premiums. Economia Agro-alimentare / Food Economy 20 (1) (2018): 75-92.
- Type:
Theses/Dissertations
Status:
Published
Year Published:
2018
Citation:
Black, S. A. and T. Vukina: Estimating Effects of Hatchery Practices on Early Poult Mortality Using Turkey Industry Field Data. in Performance and Economic Impacts of Hatchery and Post-Hatch Constraints on Poult Quality, Chapter 5, pp: 121-153. R. Beckstead, P. Ferket, L. Dean, F. Edens, T. Vukina, and M. Schwartz, advisors, Ph.D. dissertation, North Carolina State University, Raleigh NC, 2018. http://www.lib.ncsu.edu/resolver/1840.20/35505
- Type:
Conference Papers and Presentations
Status:
Accepted
Year Published:
2018
Citation:
Vukina, T. Organization of Large Scale Animal Agriculture: Contracting the Production of Broilers in Croatia. IAMO Forum 2018, Large Scale Agriculture For Profit or Society? June 27-29, Halle (Saale), Germany.
- Type:
Conference Papers and Presentations
Status:
Accepted
Year Published:
2018
Citation:
T. Vukina and D. Nestic. Paying for Animal Welfare? A Hedonic Analysis of Egg Prices. International Food Marketing Research Symposium, June 13-14, 2018; Bournemouth, UK.
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Progress 10/01/16 to 09/30/17
Outputs
Target Audience:Extension agents with farm management and livestock responsibilities, state government officials and private sector (poultry industry) management and executives. Changes/Problems:
Nothing Reported
What opportunities for training and professional development has the project provided?
Nothing Reported
How have the results been disseminated to communities of interest?Yes, the results of the resreach has been accepted for publication in a reputable international journal: Economia Agro-Alimentare. What do you plan to do during the next reporting period to accomplish the goals?In collaboration with few other regional project members will start working on the new grant entitled: "One-two Punch For Organic Poultry Processing: Knocking Out Foodborne Pathogens With Plant Derived Antimicrobials And Featuring Specialized Food Safety And Processing Training" that has been funded by the US Dept. of Agriculture (USDA) - Agriculture Research Service.
Impacts
What was accomplished under these goals?
Two things were accomplsihed in this segment of the project: (a) the investigation of the behavior of organic price premiums for poultry products and (b) the substitutability patterns between the corresponding categories of conventional and organic products.Our results show that, both in absolute terms and as the percentage of the conventional price, the highest average organic premium is commanded by boneless skinless breast meat. The results show almost no significant seasonal patterns in organic price premiums. We also estimated the Marshallian demand functions for conventional eggs and chickens where the presence of organic prices as the right-hand-side variables enable us to obtain cross-price elasticities of conventional demands with respect to organic prices. In line with the extant literature, our results show highly inelastic and statistically significant own price effects for both conventional chickens and conventional eggs. The cross-price elasticities of conventional chicken meat demand with respect to the price of organic chickens and the cross-price elasticity of conventional eggs demand with respect to organic eggs price, which are rarely found in the literature, confirm the intuitively expected result that the conventional and organic varieties of the same product are substitutes.
Publications
- Type:
Journal Articles
Status:
Accepted
Year Published:
2018
Citation:
Sohae, Eve Oh and Tomislav Vukina: "Substitutability between Organic and Conventional Poultry Products and Organic Price Premiums", Economia Agro-Alimentare, 2018, forthcoming.
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Progress 05/27/16 to 09/30/16
Outputs
Target Audience:Extension agents with farm management and livestock responsibilities, state government officialsand private sector (poultry industry) management and executives. Changes/Problems:
Nothing Reported
What opportunities for training and professional development has the project provided?
Nothing Reported
How have the results been disseminated to communities of interest?Yes, the results were published in the NC State Economist. What do you plan to do during the next reporting period to accomplish the goals?Continue engagement with outher researchers on the project to secure grants to fund research and extension activities in various aspects of organic and conventional poultry production and management. Working onsetting upa cooperative agreement with the USDA-ERS to secure access toGladson UPC data sets which will enable me to estimate the cross-price elasticities matrix of all conventional and organic egg types.
Impacts
What was accomplished under these goals?
In late 2014 and early 2015 a version of the avian flu with a high mortality rate was detected in a number of farms in Minnesota, Iowa and other states. The direct losses of poultry production resulting from that avian flu outbreak has been estimated at $113.6 million in Minnesota alone. Because it is thought the virus is transmitted via migratory birds, the possibility of an outbreak in other states with large a poultry population such as North Carolina is possible. This recent episode rekindled the interest in economic policy circles for the assessment of the economic contribution of the poultry industry to the state's economy, with an objective of measuring the extent of potential losses from such an event. The methodology for estimating economic losses is the same as one used for evaluating economic benefits of a new investment project or policy proposal. In this projectwe used input-output analysis to evaluate the expected economic benefits of the Sanderson Farm new broiler production and processing division soon to open in the eastern part of North Carolina. Our results showthat a $1 million change (either increase or decrease) in output of the poultry processing industry results in an economywide change in total spending in North Carolina of $2.3 million; a $0.69 million change in economy-wide value-added;a $0.46 million change in economy-wide wage income; and an economy-wide employment change of 10.1 workers. Theanalysis indicated the significant economic impact of the broiler industry in North Carolina and consequently projects large effects that the industry's expansion (or a possible contraction) will have on the state economy.
Publications
- Type:
Other
Status:
Published
Year Published:
2016
Citation:
Vukina, T. and M. Walden: The Contribution of the Broiler Industry to North Carolinas Economy: Evaluating The Economic Impacts of Individual Projects. NC State Economist, May/June 2016.
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