Preferences for the Farmer-Owned Label: Evidence from Cheese Consumers in the United States

Grashuis Jasper ()
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Grashuis Jasper: University of Missouri System, 65211, Columbia, MO, USA

Journal of Agricultural & Food Industrial Organization, 2023, vol. 21, issue 2, 109-116

Abstract: Driven by external developments like industry consolidation and price volatility, organized farm producers seek opportunities to generate rent in the value-added segment of the agri-food industry. Given inherent constraints with cost efficiency and product quality, farm producer organizations (FPOs) may use branding to pursue differentiation. An opportunity is facilitated by the farmer-owned label, which constitutes an ownership signal to consumers. However, empirical evidence of the economic viability of the farmer-owned label is limited. Following a choice experiment with 296 cheese consumers in the United States, we specify a random parameter logit model and find a positive willingness-to-pay for the farmer-owned label which is in excess of private and corporate brands in the same product category. In the final model, the mean willingness-to-pay is estimated at $1.74. While the farmer-owned label is proven to be economically viable in a competitive product category, consumer preferences are heterogeneous. Also, there is no compatibility between the farmer-owned label and indicators of family ownership and product origin.

Keywords: farmer-owned; agricultural cooperative; ownership structure; choice experiment (search for similar items in EconPapers)
JEL-codes: Q13 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1515/jafio-2022-0010

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