LEWIS CENTER, Ohio — Livestock and food retail experts continued the discussion about how animal welfare issues are shaping the social and economic realm of the food industry during the annual Ohio Livestock Coalition Symposium, Sept. 6.
David Fikes, a staff coordinator with the Food Marketing Institute, said animal welfare is a “social challenge” and a “social responsibility.”
He said a retailers’ greatest concern is always for their customers. If forced to choose between producers and consumers, he said retailers will side with consumers because those are their buyers.
“The accent that we place is on the consumer,” he said. “And that if given the choice, we will back the consumer. Because we are in the business of selling food and we’ve got to have consumers in order to sell the food.”
But consumer attitudes do not go unscrutinized. Fikes said producers can raise legitimate questions about the volume of the consumer voice and the actual number who are actually concerned.
Glynn Tonsor, an economics professor with Kansas State University, reviewed a recent survey that showed some consumers will support a ban on a livestock practice, but not a higher premium for the food product.He said in some cases, consumers contradict themselves and are not consistent in their answers about what they really want.
“I would contend that animal welfare is not a top-of-the-mind issue for the typical U.S. meat, milk or egg consumer,” he said, based on recent surveys.
Patchwork of regs.
From an economic standpoint, he said many of the nation’s current animal welfare efforts result in an “unfunded mandate” to farmers. And because the nation is divided in what welfare rules it practices on a state-by-state basis, there is a “patchwork across the country.”
And that patchwork, he said, creates unequal costs and opportunities for producers in different states.“At some point in time, you absorb the cost of adjustment that one of your neighbors currently doesn’t,” he said.
While unfunded today, Tonsor said retail prices, in the long-run, will adjust to the additional costs of production, but until then, it is likely some producers will be squeezed out of production.
The same concept is a concern globally, as well. If the United States moves in a particular direction on animal welfare but other countries do not, then the country could be placing a limit on its market competitiveness.
“If you have a cost of doing business in the U.S. that doesn’t occur in other places, (ex. Brazil), that’s disadvantageous for exporting meat out of the U.S. relative to Brazil.”
Other negative effects include the lack of economic information to determine what conversions really will cost farmers and consumers.
This, Tonsor said, “leaves us with less information in hand to make decisions than we’d ideally like to have.”
The same uncertainty reduces investment into research and development.
Tonsor said animal welfare laws also tend to result in fewer and larger farms, which have the resources to adapt to the new laws, as opposed to creating more smaller farms that the activists say they want.
Fikes said the food retail business is constantly changing, but revolves around three things: Cost, convenience and taste. The past five years, cost has been the biggest factor.
He shared what he calls a “profound truth” about the food retail business: “It’s incredibly imitative because it’s so competitive.”
This means that whatever successful things one retailer does, the others must follow if they want to keep up. At the same time, though, he said the real goal of a retailer is to differentiate itself.
He said one of the things weighing on consumer attitudes is the fact most do not work on farms. In 1790, he said about 90 percent of the U.S. labor force was in agriculture. In 1990, that number dropped to about 2.6 percent.
Consumers want more
Consumers are hungry for information, he said, and with tools like the Internet and Google, they can find just about whatever they want.
“They know more and want to know more than at any time before,” he said.
This means the food industry needs to be transparent, something Fikes describes as “having whatever information the consumer wants to know, available whenever they want it.”
The symposium concluded with a message by Erika Poppelreiter of U.S. Farmers & Ranchers Alliance.
She encouraged farmers to continue working together and holding peaceful dialogues about what their industry does. The farmer, she said, holds the greatest potential to secure and keep consumer trust.
“There’s only one human face consumers can relate to and trust … and that’s a farmer and rancher,” she said.