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Consumer Willingness to Pay for Tennessee Certified Beef

Andrew P. Griffith, Karen DeLong, Kimberly L. Jensen and Meagan G. Merritt

No 302907, Extension Reports from University of Tennessee, Department of Agricultural and Resource Economics

Abstract: Tennessee cattle production is primarily composed of cow-calf producers and secondarily by stocker and backgrounding operations. Given the competitive advantage other regions in the nation have in grain-finishing cattle, most Tennessee feeder cattle are sent to feedlots in Midwestern and Western states to be finished and harvested. In 2016, Tennessee commercial cattle slaughter totaled 64,900 head, which represents 6.8 percent of the 950,000 head of cows and heifers calved in Tennessee during 2016 (USDA National Agricultural Statistical Service [NASS], 2017a; USDA NASS, 2017b). This result indicates a majority of cattle are harvested/slaughtered outside of the state. Over the past several years, consumer demand for local foods has grown, with increased consumer interest in knowing how their food is produced. Recognizing this consumer interest, several livestock producers across Tennessee have delved into direct marketing finished cattle and/or beef products to consumers. Additionally, in December 2013, Tennessee’s governor challenged policymakers and state agricultural leaders to expand state agricultural and forestry industries. This challenge led to four major recommendations, one of which was to “expand marketing opportunities for Tennessee producers and encourage new production systems and agribusinesses” (Johnson, Upchurch, and Arrington, 2016). Thus, evaluating opportunities to expand cattle marketing alternatives is merited to help meet the governor’s challenge. Given the governor’s challenge, consumer interest in local foods, and the consumer’s desire to know the production practices used in food production, the question remains if Tennessee cattle producers can expand marketing opportunities and increase profitability by producing finished cattle and selling their beef under a Tennessee Certified Beef (TCB) program. To answer this question, there are several marketing components in need of evaluation including producer willingness to supply cattle to a TCB program (Griffith et al., 2018), consumer willingness to pay for TCB, and retailers’ (restaurants, grocery stores and other consumer outlets) willingness to stock TCB. At the time of publication, Tennessee has no beef state-labeling program. However, there are several programs in which cattle producers can participate and become certified that influence cattle production practices including Advanced Master Beef Producer (AMBP) and Beef Quality Assurance (BQA). University of Tennessee Extension coordinates and educates cattle producers for the AMBP program. The AMBP program covers topics such as marketing and management, production economics, genetics, reproduction, nutrition, cattle handling and transport, forages, cattle health, and other cattle industry issues. Similarly, the BQA program is a nationally coordinated, state-implemented program for both US beef producers and consumers to better understand animal husbandry techniques and scientific knowledge about emerging herd management methods. However, the level of consumer awareness regarding producer participation in these programs is limited. Because little research exists regarding Tennessee consumers’ attitudes toward and willingness to pay premiums for beef labeled as Tennessee Certified Beef (TCB), information is not available to know whether consumers would be willing to purchase TCB or pay premiums for beef labeled as TCB. The goal of this publication is to convey results of a consumer survey determining Tennessee consumer willingness to pay (WTP) for steak and ground beef labeled as Tennessee Certified Beef (TCB), labled as produced by cattle producers who have completed Advanced Master Beef Producer (AMBP) and Beef Quality Assurance (BQA) programs, and containing other labels that could appear on TCB (e.g., grassfed, Certified Angus Beef [CAB], no hormones administered).

Keywords: Community/Rural/Urban Development; Demand and Price Analysis; Food Consumption/Nutrition/Food Safety; Livestock Production/Industries; Marketing (search for similar items in EconPapers)
Pages: 11
Date: 2018-03-01
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DOI: 10.22004/ag.econ.302907

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