Duration: 10/01/2002 to 09/30/2007

Administrative Advisor(s):

NIFA Reps:

Non-Technical Summary

Statement of Issues and Justification

Consumers are a powerful force in the supply chain for meats. Each day consumers vote through their selection/purchase decisions among alternative protein sources. Huge changes have occurred during the past 25 years in the meat and poultry sectors. Beef lost its preeminent position in an increasingly globally competitive marketplace beginning in the mid-1970s. Per capita U.S. consumption on a retail weight basis dropped from nearly 95 pounds in 1976 to just above 65 pounds in the early 1990s (Purcell, 2000). The beef industry faced major challenges during this period  total cattle inventory declined from about 132 million head to approximately 95 million head. There was significant economic pain being felt by industry participants in the form of low prices and producer losses. Recently there has been a turn-around in beef demand, primarily resulting from shifting from a commodity orientation to providing consumers with product attributes they have wanted - high quality, including safety; consistency; and convenience.

The poultry sector, on the other hand, exhibited a trend inverse to that in the beef industry. Per capita chicken consumption, on a ready-to-cook weight basis, increased from around 40 pounds in the mid-1970s to more than 78 pounds in 2000 (Purcell, 2000). The picture in the pork industry fell between the two extremes observed in the beef and in the poultry sectors. Per capita pork consumption data reflect a reduction in industry capacity and output, beginning in about 1980. Offerings on a retail-weight basis declined from near 57 pounds in 1980 to just below 48 pounds in 1986 (Purcell, 2000). Per capita consumption of pork since the mid-1980s varied between 47 and 54 pounds until 1998, after which slight increases in, or nearly stable, year-to-year consumption patterns have been observed.

More and more meat industry leaders are coming to realize that demand issues (consumers) are important, as they shift from a commodity focus to a product business in the world market place. The consumer, presently and in the future, is and will be facing an on-the-go lifestyle that will demand consistent, high quality foodstuffs and convenience in preparation (Purcell, 2000). These and other attributes are important in driving consumer purchasing of meats. Producers are recognizing that their management practices impact final product attributes, such as quality, at the retail level.

Consumers receive utility from the diverse attributes of a good or service (Lancaster, 1966; Ladd and Suvannunt, 1976). The value of an exchange to parties is the value of the different attributes lumped into the good or service. The shift to more differentiated-attribute-specific products has been partially responsible for changes in the structure of the meat industry and the methods of exchange. When commodities are generic or homogenous, the traditional open production method of coordination, through market prices, adequately sends signals to producers of consumer wants (Barkema et al., 1991). With the growing number of new food products and consumer niches, however, more precision in coordinating the various sectors of the food industry is required. The greater the specialization and the number and variability of valuable attributes, the more weight must be put on reliable institutions that allow individuals to engage in complex contracting, or other forms of tighter vertical coordination (North, 1990). As a result, the trading institutions in the livestock industry have moved from centralized auction trading to private negotiation trading and from spot delivery to forward delivery (Menkhaus et al., 2001). These changes have implications regarding how price is discovered in these industries, including the nature of the competitive atmosphere in which prices are discovered.

To this point it has been established that satisfying consumer wants through specific product attributes is important to the economic health of participants in the meat industry. It also is important to understand that the trend toward more attribute specific products and domestic and international niche markets has resulted in a structure that more tightly links the individual sectors of the supply chain from producer to the consumer. Specific issues related to these broad categories are presented in the next two sections of the proposal.

Specific Attributes Issues

Consumer surveys have shown the needs for attributes such as high quality (including safe and nutritious), consistency, and convenience in preparation. These needs suggest two directions for future research  designing meat products that are tender, safe, nutritious, convenient, etc. and measuring the consumer acceptance and willingness-to-pay for new products and different product attributes.

Food safety has received increasing attention, as awareness of the health risks from foodborne disease has increased over the past 10 years (Crutchfield and Roberts, 2000). Widely publicized outbreaks of foodborne illness caused by such sources as Escherichia coli (E. coli) O157: H7 in hamburger, Listeria monocytogenes (LM) in ready-to-eat products, and Salmonella in poultry have heightened the publics concerns about risks from microbial pathogens in foods/meats. Increasing concerns about foodborne illnesses linked to microbial pathogens in meat and poultry accelerated efforts to modernize and strengthen the Nations meat and poultry inspection system. The new inspection process requires plants to adopt Hazard Analysis and Critical Control Points (HACCP) procedures. Techniques including irradiation, decontamination and ultra-high pressure are being explored to increase the safety of meats. Several approaches to carcass decontamination have been investigated with varying degrees of success being encountered (Dickson and Anderson, 1992). Steam pressure systems have proven to be quite effective for lowering microbial contamination on beef carcasses (Nutsch et al., 1997). Intervention treatments on raw products to be used for comminuted products are being studied. Irradiation has been utilized to great advantage in other countries, its use has been increasing in the U.S. In the future, the meat industry will likely use a combination of prevention and monitoring technologies to control life-threatening pathogens.

Technologies, both existing and new, are and will be important in providing consumers safer and more desired attributes. A highly significant area of research is the addition of vitamin E to meat-animal diets, resulting in reduced lipid oxidation, improved color and shelflife of fresh meat, and the potential role in the development of tenderness. Color is known to influence a shoppers perception of the freshness of retail beef (Pearson, 1994). Although the retention of desirable retail color due to the addition of vitamin E to beef feedlot rations for 100 days has been studied for the last decade in the laboratory setting (Schaefer et al., 1995; Lui et al., 1995; Faustman, 1996), it has just started to be utilized in the beef industry (Certified Hereford). By gaining an extra 1 to 3 days of shelf life for fresh retail beef, meat cases could be stocked with more inventory which would have a positive effect on sales volume. The Strategic Alliance study estimated vitamin E beef ($4 per animal cost) generated savings of $30 per carcass due to improved case life (Westcott et al., 2001). If large numbers of cattle are fed vitamin E (500 IU for 100 days) in the feedlot, available technology would also make it possible to do more centralized packaging of case-ready retail cuts. Furthermore, the addition of vitamin E to a diet has shown advantages in the development of tenderness (Harris et al., 2001). The current hypothesis is that by acting as an antioxidant, vitamin E reduces oxidative stress within muscle cells and protects the calcium induced proteolytic enzymes believed to responsible for tenderness.

Both the beef and pork industry have established quality, consistency and uniformity as major issues to enhance competitiveness, both with the other proteins as well as in the world market. A number of strategies have been used to address these issues. A systems approach to evaluating and quantifying the impact of various production, processing and technology factors has been initiated by Oltjen et al., (2000). Models which capture the influences created by genetic, environmental, and production practices can be used to group animals to enhance consistency.

The relative importance of sensory characteristics offers opportunities to improve quality and consistency at the consumer level. While tenderness has traditionally been considered the major factor influencing customer satisfaction, recent research has shown that flavor is just as important. Killinger (2001), Umberger (2001), and Umberger et al. (2002) have shown that production systems (Argentine grass feeding versus domestic grain-feeding) and meat characteristics (specifically quality grade/marbling) influence consumer perception of beef value.

High-pressure technologies such as hydrodynamic pressure processing (HDP) (Solomon et al., 1997) are being studied as a technique to improve both meat tenderness and food safety. With appropriate shock wave conditions, treated muscle is more tender than control samples. HDP may be technology for the toughness problem in callipyge lamb (Cockett et al., 1996). Basic research on these technologies will continue to evaluate the microstructure of muscle and its impact on palatability factors such as tenderness. Production systems that result in more desirable product attributes also will be investigated.

Preconditioning calves before feedlot entry has received considerable attention by animal and veterinary scientists. The conclusions have been mixed concerning feedlot performance (Pritchard et al., 1987, Lofgreen et al., 1978). Several studies have found a decreased incidence of respiratory disease when calves are preconditioned (Lopez et al., 1984, Woods et al., 1973). Respiratory disease has been linked to reduced feedlot efficiency and carcass quality at slaughter, resulting in reduced market value of animals diagnosed with respiratory disease (Faber et al., 1999; Griffin, 1997). However, the link between preconditioning regimes and animal disease incidence on feedlot production efficiency, carcass quality and meat tenderness, and the market value of finished animals has not been attempted. The literature clearly indicates that ranch-of- origin management factors and animal health affect production efficiency, profitability, and product quality in the beef industry.

Structural Issues

The meat industry is becoming more consolidated, particularly in retailing and processing. Global meat markets also are changing rapidly. A growing share of livestock producers are joining supply chains. These are tightly orchestrated production, processing, and marketing arrangements stretching from seedstock to retailer/institutional user. Traditional commodity markets are by-passed and reliance is on contractual arrangements among the chain participants to manage the transformation of livestock on the farm/ranch to meat in the cooler (Barkema, 1995). These arrangements are most prominent in the poultry and pork industries, but the trend is gaining in cattle feeding as well. Nearly all of the nations broilers and about 80 percent of hogs are produced in supply chain arrangements. More than 20 percent of cattle are marketed under supply chains (Barkema et al., 2001).

Domestic and international consumer preferences for meats, as mentioned, are shifting toward products that are easy to prepare while also promising safe eating, improved nutrition, and greater consistency. The meat industrys efforts to fulfill consumers changing food needs have triggered efforts to maintain or gain a competitive edge by trimming costs. The result is a pronounced trend toward consolidation in all sectors of the supply chain. What are the impacts of this increased consolidation and how should public policy respond? Several issues arise.

Market Power  As the processing sector of the industry becomes more concentrated, can processors push down prices paid to livestock producers? A related issue is whether food retailers have sufficient market power to push up prices at retail, or push down prices paid to meat processors. It might also be argued that while the structural changes in the meat industry increase the potential for anti-competitive behavior, the changes are largely the result of normal economic forces that are occurring throughout the economy (USDA, 2001).

Other issues have been raised by the Grain Inspection, Packer and Stockyards Administration in their annual report to Congress on the general state of the cattle and hog industries (USDA, 2001). These other issues, which merit research attention, include 

Shared Agents  Concerns have been raised by auction market owners and livestock sellers that the use of common buyers by packers, or shared agents, reduces the number of competing buyers for all cattle. Such a practice has the potential to reduce competition in auctions that already lack buyers.

Pricing Methods  Price discovery in the more concentrated and vertically coordinated livestock and meat industries has been a major concern (Koontz and Purcell, 2000). Livestock buyers use a variety of methods to establish base prices in formulas (including grid pricing) used for marketing arrangements and other contracts. These market transactions often are not reported, thus creating a lack of information in the market place. Some of these market transactions virtually disappear as producers enter into contractual arrangements and alliances with packers and in some instances even retail outlets. There is a need to evaluate these alliances and new pricing arrangements that many are using to determine the returns that are being received by producers and analyze the price signals that are being generated.

Thin Markets/ Price Reporting  Increased use of various production and marketing contracts has reduced the number of livestock sold in traditional auctions, creating a small volume of trading activity in a particular market. There is a need to investigate the potential for anti-competitive behavior in such markets, as well as the impacts of reporting prices from such markets. A related issue is how prices reported under the recently enacted Livestock Marketing Reporting Act of 1999 impact the market and the ability of producers to negotiate price in their transactions. Another provision of the Act is to make available volume and price data on specific meat cuts sold through retail outlets.

These and related issues are of current concern to livestock producers and other participants in the livestock and meat industries. Their impacts have been illusive and results from attempts to unravel them from a host of intertwined influencing factors generally have been inconclusive. Such research efforts also have been hampered by the lack of data. Alternative analytical methods to those previously employed are necessary to understand the impacts of these issues and will be a focus of this research.

Successful completion of the proposed research will result in meat products that are safer and more desirable to the consumer. This research also will lead to a better understanding of the impacts of recent structural changes in the meat industry and provide policy makers and regulating agencies with information to formulate new initiatives to help producers prosper. This will almost certainly be a major focus of policy makers in the period ahead (Barkema et al., 2001). This research proposes a multidisciplinary, multistate effort. Meat and animal scientists and agricultural economists will collaborate to provide more depth and breadth to the issues under investigation. For example, meat scientists will play an instrumental role in developing new product technologies and product attributes, while economists will assess consumer acceptance and willingness-to-pay. Analysis of the structural issues will be the responsibility of the agricultural economists on the project. A multistate effort is warranted to establish consistent and reliable procedures/strategies to monitor food safety issues and to more adequately develop procedures for investigating willingness-to-pay and structure issues. Related to the latter, for example, there is a need to pool expertise in the area of experimental economics, which can be a useful procedure for collecting market data via a laboratory approach.

Related, Current and Previous Work

Specific Attributes

Food quality and safety is now a major component of the price/value relationship for retail beef and pork and therefore quality and safety considerations are a necessary component of a marketing strategy. U.S. cattle and hog producers have taken proactive strides toward improving quality, reducing inconsistencies, improving product safety and increasing world market share. The National Beef Quality Audit in 2000 (Gary Cowman, personal communication) found that fed beef composition (cooler data) improved due to continued genetic selection and management efforts to reduce excess external fat, while improving the deposition of marbling. This has been a fine balancing act as tenderness (lack of consistency) problems have increased along with excessive carcass weights. The trend is toward branded beef (Dikeman, 1996) to have incentive to use all available postmortem technology to improve consistency of tenderness. The NCBA successfully initiated guaranteed tenderness programs (money back) by using a combination of postmortem treatments (aging, electrical stimulation, etc.).

Color is the first criterion by which consumers evaluate meat acceptability and quality (Cornforth, 1994). By using available knowledge on vitamin E supplementation of beef (Lui et al., 1995), significant improvements can be made in fresh meat color shelf life and therefore returns to a meat departments bottom line (Westcott et al., 2001).

The tenderness problems reported by Morgan et al., (1991) have been the reason for on- going studies on how to improve assessment techniques for meat texture. Chrystall (1994) lists some of the subjective and objective techniques and speculates that evaluation of raw muscle may be used to predict cooked meat tenderness. Dransfield (1994) is of the opinion the primary research interest should be concentrated in the storage or aging process postmortem.

The beef industry clearly understands they have some major problems in product consistency even though the average tenderness might be acceptable (Morgan et al., 1991; NCBA, 1997). The Beef Long Range Plan lists leverage points and goals as the beef industry plots a strategy to position beef in the market place for the coming century (NCBA, 1997).

The meat industry has been complacent concerning food safety and has perceived that poultry and fish have more safety problems. This position changed dramatically in 1993 when an E. coli O157:H7 outbreak occurred in the Pacific Northwest. The problem continued in 1998 with LM contaminated ready-to-eat products. The deaths and pain of those who survived raised this issue of food safety in national headlines and the public conscience. Thus the need for additional expertise on food safety for meat products is essential.

Research conducted under the previous project, W-177  Enhancing the Global Competitiveness of U.S. Red Meat, related to the topic of specific attributes focused on the following.
- Improving consumer satisfaction for red meat by focusing on food safety, quality, and new technology issues.
- Enhancing the ability of livestock and red meat industries to capture value by reducing industry generated quality defects, extending shelf life, increasing value-added product development, and improving packaging and shipping containers for prevention of product deterioration.

A sample of the accomplishments under the previous W-177 project include the following.

In order to achieve quality and consistency a prediction system for ruminant animal growth and composition which uses parameters equivalent to physiological breeding values, estimates of nutritional and intake selection parameters that vary genetically, was developed. The major non-genetic effector, nutrition, has been characterized as affecting protein content of muscle and viscera differentially (Oltjen et al., 2000).

Killinger (2001) has shown that steaks higher in marbling (but consistent in tenderness) were preferred 2:1 by consumers expressing a preference. Those desiring the high-marbled product were willing to pay significantly more per pound for the product. Interestingly, those who preferred the low-marbled product were also willing to pay a significant premium. This emphasizes the need to identify and produce for specific target markets while understanding system economics.

Studies involving the use of hydrodynamic pressure processing (HDP) for improving the tenderness of beef have shown that type of container (disposable plastic) and shock absorbing steel system (less rigid), as well as location of explosive (closer to the bottom of the container) improve the degree of tenderness associated with this process (Solomon et al., 1999; Solomon and Eastridge, 1999; Gustavson et al., 2001; Solomon and Berry, 2000). Analysis of meat proteins has shown that there is a redistribution of proteinaceous materials from the myofibrillar compartment to the soluble compartment of beef which progressively becomes more tender (Spanier et al., 2000) from HDP. Studies involving HDP processing significantly and instantaneously reduced (4 logs) populations of pathogenic E. coli O157:H7 associated with ground beef. Normal spoilage microorganisms in fresh and temperature-abused ground beef and whole muscle were also reduced (2-3 logs) by HDP technology, and HDP treatment significantly increased the microbiological shelf-life of refrigerated ground been and whole beef muscle (Williams-Campbell and Solomon, 2000, 2001).

A Steam PasteurizationTM System has been adapted and evaluated for low to moderate volume beef processors. The microbial reductions observed for the smaller unit were similar to those observed for the high-volume commercial units (Retzlaff et al., 1999). Repetitive High Energy Pulsed Power (RHEPP) electron beam irradiation has been evaluated for frozen ground beef (Hachmiester et al., 1999). Thiamin and riboflavin were not affected by RHEPP. Treated ground beef samples were evaluated for the potential use of 2-substituted cyclobutanones as markers for irradiation dose. Cyclobutanones are thought to be unique radiolytic products originating from fatty acids contained primarily in adipose triglycerides.

The potential for translocation of E. coli O157:H7 from the surface of whole muscle to the interior of muscle via the blade tenderization process was evaluated. Beef top sirloin subprimals were inoculated with 106 or 103 cfu/cm2 and passed once through a blade tenderization unit. Core samples were analyzed, revealing a translocation of 3-4% of the surface inoculum to the geometric center of the subprimal. Furthermore, the thermal destruction of E. coli O157:H7 in blade tenderized steaks were compared to non-tenderized steaks of three thicknesses using an oven broiling cooking method. Results revealed that with oven broiling to greater than 55 C internal temperature, blade tenderized steaks do not seem to pose any greater risk of E. coli O157:H7 infection than non-tenderized steaks (Phebus et al., 1999).

Continuing studies on providing consumers with recommendations for safe cooking of beef patties have focused on: (1) the use of outdoor gas grills and (2) temperature and color changes during cooking. Termination of cooking at observation of a brown color in a slit made in the outer edge of the fresh, thawed and bulk frozen-thawed patties during cooking resulted in internal temperatures of 65, 67, and 600C, respectively. Studies have revealed that the internal temperature of patties continues to increase once they are removed from the cooking environment; however, with thin patties (0.94 cm), the increases in temperature are often not sufficient to guarantee food safety if the patties are removed from the grill between 66 and 680C (Berry, 1998a; Berry, 1998b; Berry and Liu, 1998; Berry and Bigner-George, 2000).

A prediction system for ruminant animal growth and composition which uses parameters equivalent to physiological breeding values, estimates of nutritional and intake selection parameters that vary genetically was developed. The major non-genetic effector, nutrition, has been characterized as affecting protein of muscle and viscera differentially (Oltjen et al., 2000).

Structure

One of the most comprehensive studies conducted on the effects of structural changes, particularly concentration and related issues in the beef and pork industries, was conducted by the Grain Inspection, Packers and Stockyards Administration (USDA, 1996). The results of this study are unique in that many of the analyses used detailed confidential data taken from meatpackers records. Such data previously have not been available for analysis of structural issues in the meat industry. A summary of the conclusions of this work follows (USDA, 1996, p. 58).

The study concluded that pricing and procurement arrangements (including captive supplies) and structural characteristics affect conduct and performance in the meatpacking industry. Indications are that concentration in the beef and pork industries is likely to remain high, or even increase, and that the use of contracting arrangements will increase, especially in pork. Given the persistence and importance of these issues, there is a continuing need to monitor and analyze behavior and structural changes in the meat industry. Areas identified for future surveillance and analysis include:
7 procurement and pricing practices of industrial firms
7 rivalry and cooperation among firms
7 contracting arrangements and other forms of coordination
7 improvement in methodological capabilities
7 continued assessment of the effects of concentration.
Finally, this study provides initial steps toward a better understanding of the workings of the cattle and pork industries. Critical information needed to understand and more effectively monitor competition in the meatpacking industry is provided. The study shows that there are no quick answers in the complex market structure and behavior issues. As the industry evolves and market conditions change, sustained monitoring and additional analysis are warranted.

Feuz et al., (1993, and 1998), and Fausti and Feuz (1995) have examined the pricing system for fed cattle. They have analyzed live weight, dressed weight, and grade and yield pricing. They concluded that there is a lack of information flow in the live and dressed weight methods and market signals are not effectively transferred from consumers to producers. Furthermore, price risk to cattle producers and meat quality risk to meat packers are inversely related and creates a price differential among the three pricing methods with the live weight method offering the lowest prices and the grade and yield method method offering the highest prices on average. These authors have discussed the implication of their findings with regard to new value based pricing arrangements.

Research under the previous W-177 project evaluated the transmission of economic signals throughout the market by analyzing the efficiency of current market structures and the impact of alternative pricing systems, trading institutions and methods of delivery. Selected findings include the following.

Data from 85 pens of fed cattle (5,520 head total) were collected by the University of Nebraska. These data were analyzed by scientists from the University of Nebraska and South Dakota State University to determine average prices received for cattle under three alternative pricing mechanism. The results revealed that prices tended to be lowest for cattle marketed on a live-weight basis. The next highest prices were received for cattle marketed on a dressed weight basis and the highest prices were for cattle priced using grid pricing, on the average. The variability of revenue on an individual head basis increased with grid pricing compared to the other two pricing methods. Regression analysis was used to explain how individual animal carcass characteristics resulted in price premiums or discounts for alternative grid prices. The maximum premium associated with marbling was identified when marbling was sufficient to change from the mid-Choice to the high-Choice grade (Feuz, 1998; Fausti et al., 1998).

Research conducted at Oklahoma State University using data from the Fed Cattle Market Simulator (FCMS) suggests that non-price vertical coordination strategies in fed cattle markets have an economic return ($15/head). This return is realized primarily from higher revenue from boxed beef sales and lower costs of gain for cattle on feed resulting from coordination (Anderson et al., 1998).

A study was completed at Utah State University examining if USDA production forecasts for beef and pork have improved over time. The findings indicated that during the 1980s the forecasts had a negative bias but that this has since been corrected (Bailey and Brorsen, 1998). During 1998 there was significant public interest in meat price spreads particularly because pork price spreads set several records and hog prices dropped to their lowest level in 50 years. USDA, ERS did an analysis based on Hahns earlier work which suggests the record-setting spreads in 1998 were consistent with past patterns of farm-to-retail price transmission (Hahn, 1998).

Research focused on understanding the impacts of alternative trading institutions and delivery methods on the price discovery process in laboratory market. Other research investigated the influences of forward, spot, and linked forward/spot deliveries in double auction trading. In general, the influences of delivery method overpowered the effects of random shocks in supply and/or demand on prices and quantities traded (Menkhaus et al., 1999; Menkhaus et al., 2000).

The proposed project will expand on the present knowledge base of the red meat industries. Many of the areas of need that have been identified above are addressed by this proposal. The overall objective of this project is to improve the global competitiveness of the U.S. livestock and meat industries by conducting integrated/cross-disciplinary research that addresses the following primary production and marketing issues.

CRIS Search

This project, while related to some Multistate research projects, does not duplicate those currently in progress. A CRIS search completed 5/7/02 of key words (meat, safety, structure, quality, price discovery, competitiveness and value) resulted in 65 records with seven having information potentially pertinent to the current proposal. Four of these seven related to research proposed under Objective 1, two of which terminate in 2002. Three are pertinent to Objective 2; two terminate in 2002. A unique characteristic of the current proposal, relative to existing similar Multistate projects, is the interdisciplinary nature of the proposed research. Animal and meat scientists, as well as agricultural economists, combined provide a unique perspective in addressing current meat industry issues. Another differentiating feature of the current proposal is its focus on meats, rather than foods. Methodologies in this project also are different from those in other projects. Specifically, other research have not used laboratory techniques to elicit willigness-to-pay for product attributes or to study the impacts of structural changes in the meat industry. Ongoing research, and output, from other Multistate projects will, of course, contribute to the success of the current project, in so far as projects are complementary.

Objectives

1. Improve meat quality, safety and value at all levels of the supply chain to enhance competitiveness and to evaluate economic impacts of these new approaches.
   
2. Evaluate the impacts of the changing structure of the meat industry including price discovery under alternative pricing systems, trading institutions and methods of delivery.
   

Methods

Objective 1 Food safety data will be collected by experiment station workers according to standardized published procedures. Examples for food microbial protocols can be found in APHA (2001) and FDA (2000). There will be close collaboration among stations to follow established or develop protocols when needed (Colorado, Iowa, Texas, and USDA-ARS). When appropriate, data collection and sampling will be done in commercial plants during normal operations. Close collaboration with industry to collect meaningful data will help to interact with commercial operations to implement and improve HACCP procedures. Other stations also will be involved with meat safety issues. The red meat industry is plagued by product inconsistency both at the retail meat case and the white table cloth restaurants. Problems arise both from variation in sensory properties as well as product failing to meet acceptable sensory thresholds. Textural differences (especially meat tenderness) will be addressed though research on ultra-high pressure (Wyoming), hydrodynamic pressure processing (USDA-ARS and Virginia), and evaluation of production and grading procedures (Nebraska , Texas, Washington, California, Colorado, and South Dakota). Greater understanding of the biological processes of tenderization will continue (Iowa, Nebraska, Wyoming), including studies on the role of antioxidants (Iowa). A new hypothesis concerning the relationship between proteolysis and drip loss will also be investigated (Iowa and ARS). Textural measures and predictions will include objective techniques like Warner-Bratzler shear, trained sensory panels and instrument grading technologies. Subjective measures will include consumer panel ratings. Research on the relative flavor differences among muscles and factors influencing flavor development will be conducted. The consumer value associated with flavor differences will also be included (Nebraska and Colorado). Appearance issues will include studies on fat and lean muscle color (Hunt et al., 1991; Ringkob, 2001) particularly as they relate to the export market (Wyoming and Nevada). Where appropriate, integration of economic assessments and meat quality characteristics will be attained to characterize consumer willingness-to-pay. There is interest in improving methods of eliciting willingness-to-pay information from consumers, as well as value based marketing in general (Nebraska, Colorado, South Dakota, Texas, and Iowa). These are important in assessing the economic impacts of new/improved product attributes and products and in niche or specialized marketing (domestic and foreign markets). Laboratory experimental auctions are increasingly being used to elicit willingness-to-pay (Umberger and Feuz, 2001, Lusk, 2001). This technique was the subject of discussion in a symposium at the 2001 Western Agricultural Economics Association Meetings participated in by Nebraska, Colorado and Wyoming. The foundation for this methodology is in place, but refinements will be made in the current project. Willingness-to-pay information can be used to assess whether or not consumers will be attracted to products that include selected attributes, as well as if they will pay for any additional costs associated with providing these attributes. Objective 2 Laboratory experimental economics techniques will be one approach used to evaluate the effects of the changing markets in the livestock/meat industries. Understanding the process of price and quantity discovery is central to the issues of evaluating the effects of the changing structure of the meat sector. There is a general concern among market participants regarding the effects that changing structures and coordination may have on the process. Due to the proprietary nature of price data under the coordinated system, experimental economics is an appropriate method to study price and quantity discovery issues. Fundamentally, experimental economics is the study of individual choice in the context of an economic institution. The objective is to design a laboratory experiment which will create a manageable model of a real world phenomenon where adequate control can be maintained and accurate measurements of relevant variables guaranteed. This effort can be strengthened through cooperation among interested stations (Colorado, Nebraska, and Wyoming). Traditional price analysis methods, including econometric and time series approaches, and related methods will be used to investigate the impacts (including impacts on rural communities) of structural and institutional changes in meat markets. Alternative data sources will include market data from voluntary and mandatory price reports and retail scanner data. Data collected from these sources will be shared among the various participants on the project to enhance the coordination of these analyses (USDA-ERS, South Dakota, Nebraska, Utah, Wyoming, and Iowa).

Measurement of Progress and Results

Outputs

• Analytical evaluation of new and existing processes to improve the safety of meats for human consumption.
• Methods to improve quality, consistency, and uniformity of meat products.
• Economic evaluation, via willingness-to-pay, and other measures of consumer preference, for existing and new product attributes.
• Identification and greater understanding of mechanisms affecting meat quality
• Prediction models for carcass parameters.
• Output 6; Laboratory data (prices, quantities traded, buyer/seller earnings) to compare the impacts of alternative structures that are evolving in the meat industry. Output 7; Analyses of alternative means to improve producer bargaining advantage in an increasingly concentrated meat processing sector. Output 8; Global meat demand forecasts with potential markets and competitors. Output 9; Analytical evaluation of current and new market structures and institutions, including mandatory price reporting.

Outcomes or Projected Impacts

• Improve consumer satisfaction of meat products by focusing on food safety issues to enhance the ability of livestock and meat industries to capture value by reducing quality defects.
• Provide means to satisfy the requirements of a critical control point in the HACCP system.
• Better products and consistency due to ability to enhance and predict carcass and muscle attributes.
• Provide producers with information to assess the advantage of alternative pricing systems under which to market livestock.
• Provide background information to assist policy makers and regulatory agencies in enhancing the global competitive economic atmosphere for livestock and meat industries.

Milestones

(2003): Develop a method to characterize fat color.

(2004): Develop and refine technical processes that enhance safety and quality. Refine methodology to elicit consumer willingness-to-pay. Define meat quality changes due to pressure processes. Retail scanner data for meat cut sales (volume and prices) collected and posted on the Web.

(2005): Determine the relative effect of flavor and other sensory traits on consumer perceptions of value. Collect production and market data from industry cooperators, secondary sources and/or experiments.

(2006): Understand and develop methods to optimize meat quality changes due to pressure processes. Conduct laboratory auctions to assess value-added contributions. Analysis of data.

(2007): Continuous efforts to obtain additional funds and to publish results of research findings.

Projected Participation

View Appendix E: Participation

Outreach Plan

Project participants have a history of information sharing activities, cooperation, and productivity. Many of the project scientists have been involved in this effort previously, some for decades. Their expertise and productivity are well documented in previous accomplishment reports. New scientists have been added to enhance the scope and multidisciplinary nature of the project.

Several of the scientists involved in this project have Extension appointments. This will enhance the dissemination of research results to the general public through presentations and popular publications. There are no artificial boundaries where the research component waits for the outreach function to do something with the information generated from project efforts. It is the intention of the technical committee that new questions and information should flow freely between the laboratory and industry to benefit the ultimate consumer. Most project scientists interact with outreach personel at three respective institutions and at regional and national levels. Many of the aforementioned "Outcomes or Projected Impacts" lend themselves to outreach education activities. Various media can be used to educate producers, processor, policy makers, and consumers.

It is intended that preparation of peer reviewed publications, presentations at professional meetings, and other means of disseminating project results to professional audiences be part of the ongoing project effort. This group also will work collaboratively with industry and government leaders to provide additional insight into solutions for many of the emerging challenges facing the livestock and meat industries. This will be accomplished by inviting these individuals to annual meetings and requesting their input into research directions for the future and their critique of ongoing research. When appropriate, published proceedings, or other published work will be released to the appropriate audiences.

Organization/Governance

All members of the technical committee are eligible for office, regardless of sponsoring agency affiliation. The chairperson, in consultation with the administrative advisor, notifies the technical committee members of the time and place of meetings and presides at meetings of the technical committee. The chairperson is responsible for preparing or supervising the preparation of the annual report of the regional project. The vice-chairperson is responsible for the organization of the annual meeting and preparation of the agenda. The secretary records the minutes and performs other duties assigned by the technical committee or the administrative advisor.

Leadership of the technical committee consists of chairperson, vice chairperson, and secretary. Nominations are taken from the floor at the annual meeting for secretary. Secretary moves up to vice chairperson the next year and the vice-chairperson moves up to chairperson.

The design of this project is to facilitate interaction between economists and meat scientists to improve marketing of U.S. meats. The committee is organized to have a balance of committee members from the scientific disciplines of agricultural economics and meat science. Attempts will be made to rotate leadership alternate years between meat scientists and agricultural economists.

Literature Cited

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Attachments

Land Grant Participating States/Institutions

CA, CO, IA, KS, MT, ND, NE, OK, OR, SD, TX, UT, WA, WI, WY

Non Land Grant Participating States/Institutions

Beltsville Area, USDA/ERS