IQF Catfish Retail Pack: A Study of Consumers' Willingness to Pay

The study examined the potential for household-size packs of catfish fillets for grocery sales. Households would purchase 6-fillet packs in various packaging materials except in Styrofoam. The average price households are willing to pay is $4.37/lb. Households that prepare catfish fried have a higher probability of purchasing such retail packs.Consumer/Household Economics,

FORECASTING MARKET SHARE USING A FLEXIBLE LOGISTIC MODEL

There is a strong competition from low-priced imported catfish fillets resulting in a declining market share for domestic farm-raised catfish fillets. To match the competition, catfish processors are embarking on pricing policy measures that are volume-oriented instead of profit- or image-oriented. This could be an effective short-run pricing policy measure for optimal long-run sustainability and profitability of the industry. Volume pricing strategies are aimed at meeting target sales volumes or market shares. This paper explores and compares the performance of the standard logit, the inverse power transformation (IPT) logit and the logarithmic version of the inverse power transformation logit models in terms of generating forecasts for market share of U.S. farm-raised catfish fillets. The results suggest a better performance of the log-IPT in every aspect compared to the linear standard logit and the IPT logit models.market share, forecasting, flexible logit, Marketing, Q130, C250, C530,

Investment Analysis of Agri-Food Ventures: What Risk Premia are Appropriate? The Silence of the Literature

Financial principles of project investment analysis deal with the cost and benefit flows over time. Invariably, the correct future cash flows and exact risks are unknown. The agricultural academic literature devotes substantial energy to discussing the estimation of the cash flows but it is relatively silent on applied estimation of risk. Empirical studies on agri-food ventures have made little or no attempt to estimate appropriate risk adjusted discount rates or other risk measures. Choice of discount rate has been arbitrary. Thus little guidance has been given to practitioners analysing agri-food investments as to the appropriate risk adjusted discounts rates. The Capital Market Line provides a relatively straightforward way to calculate risk premiums for project investments by non-diversified investors. These risk premiums can then be used in Net Present Value investment analysis.Agribusiness, Risk and Uncertainty,

Factors Influencing the Purchase of Live Seafood in the North Central Region of the United States

This study assesses the preferences of shoppers of live seafood products in the North Central Region of the US accounting for heterogeneity in their preferences. The results suggest that quality assurance considerations and high incomes are factors that would increase the probability of higher expenditures on live fish/shellfish. The purchase of saltwater fish and shellfish also increased the probability of higher expenditures. The North Central Region produces freshwater seafood, and maintaining fish quality through the production process is important to this niche market. Shoppers also purchased live seafood frequently, signifying the importance of availability.Live fish, preferences, random parameters ordered probit, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Institutional and Behavioral Economics, Public Economics, Q11, Q21, Q22,

Consumer Preferences for Biopreservatives in Beef and Pork Packaging and Testing the Importance of Product Origin

Recent food science research on packaging at the University of Alberta has focused on the use of biological agents (biopreservatives) to extend meat shelf life. This potential technology involves the introduction of microbial organisms into food packages to control or inhibit the growth of disease causing organisms such as Escherichia coli (commonly associated with hamburger disease). Biopreservatives are not yet in commercial use. The study evaluated Western Canadian consumers' preferences regarding the potential use of biopreservatives in fresh red meat packages (beef and pork). The study also assessed the effect of product origin on consumers' purchasing decisions; in particular, whether there is an increasing or decreasing probability of purchase if a fresh meat product is labeled as a product of Alberta, product of Canada, product of United States or if no origin is displayed. The research objectives were achieved through the collection and analysis of data from mailed survey questionnaires that included stated preference and scaling methodologies. The study used multinomial nested logit models to examine the potential effect of the identified product characteristics on the probability of a product being purchased. It is found that in aggregate, the potential use of biopreservatives in fresh meats packages is currently not acceptable to consumers, although many consumers are not opposed to research in this area. The price reductions required for consumer acceptance of a product packaged with a biopreservative are not currently feasible. The study also finds that Western Canadian consumers are generally loyal to meat products from Alberta and Canada as a whole, relative to fresh meat products sourced from the US or products without any indication of origin. For high quality beef products, Alberta is seen as a preferred source compared to other sources in Canada. Simulation results suggest that the price of beef cuts from other Canadian sources need to be reduced before consumers will be indifferent between that product and a beef cut from Alberta. On average, a price reduction of about 15 percent is required for a high quality beef product from other Canadian sources before consumers are indifferent to a Canadian labeled product versus an Alberta product. For a high quality pork cut and for ground beef, the study results indicate that consumers generally are indifferent between products from Alberta and products from other Canadian sources. Branding Alberta pork for export to other provinces does not appear to provide benefits at this time. A comparison of a US product and a product from Alberta suggests that the US product price would have to be reduced by at least 35 percent, whether for a beef cut or a pork cut, before consumers would be indifferent between these products from the two sources. There is a strong bias towards purchase of local product in meat consumption by Western Canadian consumers as long as the domestic product is perceived to be of the same quality as the US fresh meat product.Demand and Price Analysis,

REPUTATION AND STATE COMMODITY PROMOTION: THE CASE OF WASHINGTON APPLES

A dynamic multiple-indicator multiple-cause (MIMIC) framework was used to estimate the latent variable reputation with price premiums for Washington apples and attributes that covered the period July 1996 to November 1999. A maximum likelihood two-stage approach was employed. For comparison purposes, a hedonic regression was also estimated. Results from the first stage of the estimation procedure in the MIMIC reputation model suggest that price premiums are good indicators of reputation. The indicator coefficients, also called factor loadings, imply that the estimated reputation variable is common to the five indicators chosen and that the measurement of reputation is not likely to be obscured by a wide diversity in the indicators. The common factor issue suggests a possible existence of collective 'Washington' reputation. Results from the second stage of the MIMIC reputation model are compared to those from the Hedonic proxy model. In general, results from the MIMIC reputation model make more intuitive sense and are in line with the theoretical literature on reputation than the results from the Hedonic proxy model. Reputation is found to be stationary and that shocks to Washington's reputation are temporary. In the MIMIC reputation model, all the estimated coefficients on the explanatory cause variables had positive signs, except the Red Delicious variety variable. The magnitude of the coefficient on the logo term is large, suggesting a strong impact on reputation. The estimated constant term in the MIMIC reputation model is negative and relatively large, which suggests that reputation is declining. The concerns of declining perceived "eating" quality in Washington varieties thus appear to be real. It appears then that the apple industry is currently benefiting from past/accrued reputation. The current standards in the apple industry give room for some Washington producers to free ride on the collective reputation. Hence, there may be some justification for minimum quality standards. For efficient public policy purposes, our findings suggest that policymakers and the apple industry as a whole should consider reputation in their cost-benefit analysis for purposes of resource allocation.Marketing,

THE IMPACT OF POST-FARMGATE VALUE-ADDING ON WESTERN CANADIAN AGRICULTURE

Agribusiness,

A Stated Preference Analysis of International Commodity Marketing: South Korean Hotel Meat Buyers' Perceptions of Canadian Beef, US Beef and Australian Beef

International Relations/Trade, Livestock Production/Industries,

Application of porter’s framework to assess aquaculture value chain in Kenya

Aquaculture (fish farming) is an agricultural as well as fisheries activity, competing with other agricultural enterprises and artisanal fisheries for the same basic inputs. Therefore, aquaculture is subject to the same basic resource constraints that traditional agricultural activities face. The literature suggests that competition within a value chain is between chains and not individual actors. This study examined the aquaculture value chain in Kenya, assessing the entire value chain, and determining the appropriate points to participate in economically sustainable ways. The competition analysis assessed attractiveness at each stage of the chain by reviewing the rivalry in terms of five competitive forces within the Kenyan aquaculture industry; competitive rivalry, the threat of new entrants, bargaining power of suppliers, threat of substitutes and bargaining power of buyers. The aquaculture industry in Kenya is assessed using Porter’s model with marketing mix (Ps) and factor evaluation matrix (FEM). Input supply is found to be the most difficult value chain function in which to participate because it requires relatively large initial capital outlays and additional operating funds. Although fish farming is the driving function of the entire value chain, the significant capital investments required could be a barrier to entry. Fish farming has largely benefited from the support of government, NGOs and other regional development initiatives. The study established that the easiest sector to enter (in terms of low barriers to entry and exit and low labour requirements) is the fish marketing sector. This chain function provides the most flexibility and liquidity to participants, whether as full-time or part-time occupation. Overall, participation in the Kenya aquaculture value chain will depend on the prospective entrant’s level of experience, time, capital commitment and financial goal (long term stability versus liquidity). Aquaculture requires a long term commitment and high capital outlays, as well as persistence, and should therefore be considered by those looking for long term stability and not short term benefits. Established fish farmers may consider diversifying into input supply and value addition as well.Key words: Kenya, aquaculture, tilapia, value chai

Demand for Live Seafood in the North Central Region

Demand and Price Analysis,