2011 Spring - A private future for food and fibre quality

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FPJ0803 - Umberger, W, Griffith, G - Beef cattle producer strategies to accommodate more concentrated and organised value chains, and more discriminating consumers

The market structure of red meat processing and retailing in Australia is becoming increasingly concentrated. This is causing ongoing concern about the possible abuse of market power against suppliers, especially beef cattle producers. Meat consumers are also changing and significant segments of shoppers are paying greater attention to intrinsic and extrinsic quality attributes. Demand for differentiated meat products which satisfy consumers’ needs in this area is growing. Retailers and processors are increasingly demanding suppliers meet private standards.
These private standards are usually more stringent or extensive than public food safety and quality standards. They are likely justified as consumer demand is changing and retailers are concerned about liability issues related to food safety and the integrity of product claims. While they can create new marketing opportunities for producers who are able to meet the production and/or process requirements and establish and maintain mutually-beneficial relationships with buyers, there are also potential negative implications for producers. For example when there is a substantial cost in meeting the stringent quality and logistical requirements, or when the standards criteria decrease farm productivity. Additionally, there are other concerns regarding the increasing use of private standards: private standards are not necessarily science-based and may mislead consumers, and the ‘top down’ manner in which private standards are imposed on the food supply chains may lead to equity and market access issues as a result of further consolidation and integration of agrifood markets. Nevertheless, there are many other opportunities for producers aside from just being involved in retailer or processor-driven supply chains. A plethora of opportunities remain for other motivated producers who wish to participate in these new marketing systems.

Umberger, Wendy & Griffith, Garry, Beef cattle producer strategies to accommodate more concentrated and organised value chains, and more discriminating consumers, Farm Policy Journal, Vol. 8, Number 3, Spring 2011, A private future for food and fibre quality, Australian Farm Institute, pp. 27-37, ISSN: 1449-2210 (print), 1449-8812 (online).

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