S1088: Specialty Crops and Food Systems: Exploring Markets, Supply Chains and Policy Dimensions
(Multistate Research Project)
S1088: Specialty Crops and Food Systems: Exploring Markets, Supply Chains and Policy Dimensions
Duration: 10/01/2020 to 09/30/2025
Statement of Issues and Justification
- The need as indicated by stakeholders: The research proposed in this project will address stakeholders needs identified by the Association of Public Land Grant Universities, and the Experiment Station Committee on Organization and Policy—Science and Technology Committee, in their 2019 “Science Roadmap for Food and Agriculture” document (https://bit.ly/2K2JNYh). Since S-1067 participants represent various US regions (25 different US states), it was important to identify the needs of US stakeholders as a whole. Below are the stakeholder needs [identified by the APLU committee, and complemented by the views of S-1067 participants] that this project will address:
- The need for US food and agricultural producers to be competitive in a global marketplace.
- The need for food and agricultural systems to be economically, environmentally, and socially sustainable.
- The need for US agriculture to adapt to and contribute to the mitigation of the effects of climate variability.
- The need for resilient supply chains that can adapt to unforeseeable shocks.
- The need for safe, healthy, and affordable foods.
- The need to address global food security and hunger.
- The need to be good stewards of the environment and natural resources.
In addition to these stakeholder needs, project members draw on their working relationships with industry associations and programs in their state/region to frame current research and extension activities, and future collaborative work.
- The importance of the work, and consequence if the work is not done.
Fresh fruit and vegetable consumption has an important role in the efforts to protect individuals against serious and costly chronic diseases such as obesity, heart disease, type 2 diabetes (Center for Disease Control and Prevention (CDC), 2018), and conditions that have been identified by the CDC as some of the underlying conditions that put individuals at a higher risk for severe illness due to COVID-19 (CDC, 2020). Demand for fresh produce has been increasing in the US and growth is expected to continue due to governmental efforts to increase produce consumption per capita, as well as an increased number of marketing and promotional messages focusing on the benefits of eating fresh fruits and vegetables (USDA, ERS, 2020; Food and Nutrition Service, USDA, 2019; Minor and Perez, 2018; Cook, 2011).
Even though currently US individuals are eating more fresh fruits and vegetables per capita than in 1970, the average US diet is still not aligned with the 2015-2020 Dietary Guidelines for Americans for fruit and vegetable consumption (Stewart and Hyman, 2019; USDA, ERS, 2020; CDC, 2018). Therefore, we anticipate government efforts to increase fruit and vegetable consumption will continue.
Over the past five years, a large percentage of retailers have consistently identified the produce department as one of the top three most successful in generating sales and driving traffic (Progressive Grocer, 2019). The popularity of fresh produce offers considerable potential for enhanced marketing revenues if producers can recognize and harness opportunities emerging from changes in food purchases. The produce industry is already taking advantage of the increased popularity of fresh produce among consumers by finding ways to better address consumer needs. For example, a collaboration between Washington State University researchers, tree fruit growers, and industry representatives resulted in a new apple variety (Cosmic Crisp) designed to make “consumers happy” (Hollenbeck, 2019).
Meanwhile, producers and consumers need to be informed about the emergence of new business strategies, regulations, and policies that may influence their confidence in (consumers) or competitiveness within (producers) this quickly innovating food marketing sector. An example of these regulations is the 2018 Food Safety Modernization Act (FSMA), which implicates new quality assurance and safety measures across the entire food supply chain (USFDA, 2020). Food safety incidents reduce produce demand and increase the costs of farms supplying fresh produce in the US; the FSMA is expected to reduce such incidents (Bovay, Ferrier, and Zhen, 2018). Another example is the Farm Workforce Modernization Act that passed in the House of Representatives on December 11, 2019. This act proposes meaningful reforms to the H-2A agricultural guest worker program to better fit the needs of the agricultural sector (US Congress, 2019). Because the produce industry depends heavily on labor, this act has the potential to improve the viability of the produce industry and its capacity to meet the increasing demand for fruits and vegetables (Kroger, 2019). One more example of these regulations is the recently launched (January 2020) GMO labels regulations in the US. This is an important market development for all food categories, including fruits and vegetables, that needs to be studied more closely.
Demand trends and implications for the fresh produce supply chain
Consumers continue showing interest in foods produced in unique ways, including organic, local, pesticide-free, free of genetically modified organisms (GMOs), environmentally sustainable (Bir et al., 2019; Chen et al., 2018; Govindasamy et al., 2018; McFadden and Huffman, 2017; Rana and Paul, 2017). These individuals and households keep fueling changes in the food system as they seek to purchase produce through diverse channels ranging from direct markets (e.g., on-farm markets, farmers’ markets, community supported agriculture, pick-your-own, and roadside stands), to more traditional supermarkets, warehouse clubs, and big box stores (Low and Vogel, 2011), with expectations as broad as picking their own produce to highly branded products with 3rd party certifications. This evolution has led to a higher number of farmers considering new ways of producing and marketing their produce.
The COVID-19 pandemic is an example of how rapid changes in the food systems where consumers changed where and how they consume foods, caused for farmers to be forced to change production and marketing practices to satisfy consumer needs. In the midst of the COVID-19 pandemic, producers have lost substantial sales to foodservice outlets, including restaurants, schools, and hotels, and also adjusted to changes in consumer demands based on various states’ “stay-at-home” orders. The COVID-19 pandemic has led to major shifts in both supply and demand for fruits and vegetables in the United States; some of these may end up being short term effects while others could have long-lasting implications in the produce industry. One of the most immediate and important impacts of the COVID-19 pandemic on the fresh produce supply chain is related to the realignment of this supply chain due to the near closure of all foodservice outlets and the need to satisfy the needs of consumers buying fresh produce almost entirely through the retail channel (Richards and Rickard, 2020). Within the produce sector, we saw increases in fruit and vegetable sales in retail food markets, but witnessed a much larger shift in purchases of frozen fruits and vegetables. Also, since the start of the pandemic, consumers have markedly increased their online food purchases. This shift is expected to affect purchase patterns for consumers, and have potentially large implications for food retailers, especially smaller retailers that participate less in online food sales.
Additionally, there is some evidence that the COVID-19 pandemic has potentially solidified consumer interest in direct-to-consumer market outlets (e.g., CSA) that are likely to be less vulnerable to the food supply chain disruptions we have observed (Hobbs, 2020), yet the long term impacts are still to be determined.
On the supply side, producers are considering production practices, technologies, and technology innovations that target consumer preferences and needs, and align with their profitability and risk preferences. For example, plastic mulches are extensively used in specialty crop production to suppress weeds and conserve water, among other benefits, but as consumers increase their awareness of the risks associated with plastic pollution, they demand or become interested in production practices that reduce plastic pollution (Chen et al., 2019). Producers are using or considering using biodegradable mulches to not only reduce plastic pollution but also to reduce labor associated with end-of-season activities. This addresses consumer preferences, reduces farm risk associated with labor access, and improves farm financial viability and long-term sustainability (Velandia et al., 2020b). Other production practices and technologies addressing these three goals (e.g., consumer preferences, farm business financial viability, and risk) include gene-editing technologies, mechanical aids, among others.
An important concern on the supply side of the fresh produce industry is labor availability that could satisfy production needs and consumer demand. The COVID-19 pandemic has made evident that disruptions to the availability of agricultural labor can have serious implications on the supply (and price) of food products. Because fruits and vegetables are heavily dependent on agricultural labor, any pandemic event that causes a large share of workers to become ill will have significant effects on the supply of produce. This is particularly worrisome in the fresh produce industry given the number of agricultural workers involved and the close proximity for which they work and live. Therefore, it is important to understand how labor availability disruptions could affect the supply of fresh produce, and how producers and distributors adjust to these disruptions in the short and long-term.
Consequences if the proposed work is not done
Despite the expectation that the fruit and vegetable segment of the food market will continue growing, little is known about how consumer preferences and food supply chain partners practices will change in response to new purchasing environments that could be created by climate change, or unforeseeable events such as the current COVID-19 pandemic. Furthermore, little is known about the impact these changes will have on fruit and vegetable producers’ decisions to adopt new technologies and practices, the changing coordination and supply chain responses of fruit and vegetable enterprises, or the response to regulations and policies developed to oversee and guide new innovations in this sector. In short, if this work is not done, producers, wholesalers, and retailers are likely to remain reactionary to domestic and global shifts in consumer behavior, and policy may be developed without a full assessment of potential implications for consumers, producers, and other fruit and vegetable industry stakeholders.
- The technical feasibility of the research
Members of this committee have a long history of building industry and governmental partnerships in their states and nationally to develop research priorities. Moreover, past projects and publications, highlighted throughout this proposal, illustrate their ability to secure competitive grant funding, necessary secondary data, construct primary survey instruments, and develop case studies that are appropriate for the needed research.
However, each type of research approach (e.g., survey, experimental auctions, analysis of secondary retail scanner data, simulations) has its challenges and limitations. One value of working together is that the team can give and receive feedback on survey instruments, compare the characteristics of specialty crop supply chains across states, leverage our collective resources to respond to emerging and pressing research needs, and collaboratively problem solve for the benefit of supply chain stakeholders in our respective states.
The only barriers we see are decreased funding and institutional support for some research activities due to the economic ramifications of the current COVID-19 pandemic and staffing shortages at key government partner agencies (e.g., USDA NIFA and USDA ERS). That said, as researchers, we are problem solvers. For example, even during the current pandemic, members in different participating states, including Colorado, North Carolina, Ohio, Tennessee, and Washington, are mobilizing to support the specialty crop supply chains and other agricultural producers through collaborative research initiatives and partnerships with industry organizations, non-profit organizations, and state agencies.
- The advantages of doing the work as a multistate effort
A multistate effort that facilitates inter-state coordination and collaboration is desperately needed. Research and extension programs focused on economic considerations of fruit and vegetable production and marketing have historically received less attention relative to commodity crops, or meat animal production (in geographic areas where this is concentrated). Many agricultural and/or applied economics programs have one or very few faculty members focused on these products. Given these limited human resources, states face research and extension capacity constraints when trying to respond to the wide breadth of fruit and vegetable issues that need to be addressed.
Although they may differ in their details, many of the economic and supply chain challenges of fruit and vegetable production and marketing are often similar within regions. Thus, obtaining information and resources concerning a specific crop from another nearby state, and adapting it to local circumstances, or conducting research and developing materials through collaborative efforts, offers a more efficient approach to this work. Furthermore, as fruit and vegetable production and processing are seasonal, many industry stakeholders have a presence in several states to assure product availability, resulting in many S-1067 members overlapping in the specific industry stakeholders they support. Finally, assessments of consumer demand frequently examine consumers over a broader geographic area than a single state. Here again, inter-state collaboration offers significant benefits.
We also believe that a multistate approach is justified in terms of pooling research expertise and leveraging the impact of our deliverables through high profile venues. A few examples of this collaboration that have occurred in the current project include:
- A special issue in the journal Choices--on the topic of food loss and waste--guest edited by members Kathryn Boys (NC) and Brad Rickard (NY), with additional contributions from Karina Gallardo and Jill McCluskey (WA).
- A special issue in the journal Choices--on the topic of maturing local food systems--guest edited by members Dawn Thilmany (CO) and Tim Woods (KY), with additional contributions from Margarita Velandia (TN) and Becca Jablonski (CO).
- Successful grant collaboration: WA, NY. 2017-2021. VitisGen2: Application of Next Generation Technologies to Accelerate Grapevine Cultivar Development. PI: B. Reisch (Cornell). USDA-NIFA-SCRI ($6.6 M). This project utilizes plant breeding and genomics approaches to improve grape characteristics and enhance the economic and environmental sustainability of grape production. The economics team evaluates the consequences of introducing new grape traits, including impacts upon cost, yield, revenue, profit, pesticide use, and the environment.
- Successful grant collaboration: WA, MS. 2019-2023. VacciniumCAP: Leveraging genetic and genomic resources to enable development of blueberry and cranberry cultivars with improved fruit quality attributes. PI: M. Iorizzo (NCSU). USDA-NIFA-SCRI ($6.4 M). This project aims to establish a nationwide coordinated transdisciplinary research approach to develop and implement marker assisted selection (MAS) capacity in Vaccinium crops (blueberry and cranberry) breeding programs, to enable breeders to select and pyramid fruit characteristics (FCs) that positively contribute to fruit quality and market value. The economics team aims to enlarge market potential, and increase consumption of Vaccinium fruits by using socio-economic knowledge of consumer preferences to inform breeding.
- Successful grant collaboration:KY, SC. 2018-2020. Measuring and Building on Local Food System Vitality for Communities in the South. USDA-NIFA ($493,560). This project refines and uses an assessment tool - a Local Food System Vitality Index - to evaluate how different aspects of a local food system (LFS) are 1) valued by resident consumer and producer groups and 2) performing according to stakeholder expectations, in 16 communities in the US South. Results from this study are being used to suggest LFS development strategies for these 16 communities.
- “Communities of Practice” were built to analyze the economics of local foods with partners in NY, VT, IA, TN, WI, MI, FL, WA, NC, IN; outlined in the Toolkit to Assess the Economic Implications of Food Systems.
- 35 joint paper sessions at agribusiness, food distribution, agricultural economics, and food system conferences.
These examples reflect the significant legacy of leveraging collaborations that have been generated by the previous iteration of this project. Moving forward, it is anticipated that the S-1067 team will develop at least one multi-state research project during the next project’s term (by 2024). This proposal will target one of the relevant USDA’s competitive grant programs, such as the NIFA AFRI Foundational Program or Specialty Crop Research Initiative. In addition, as several of our committee members also have extension roles, we plan to collaborate on three to four grant proposals to support farmers’ markets, local foods, price discovery in alternative markets, and adoption of production practices or technologies addressing consumer needs. Finally, the project team will collaborate in developing a special issue in a peer-reviewed journal, highlighting the outcomes resulting from the objectives proposed in this project.
- Likely impacts of successfully completing the work
The research generated by S-1067 members will have benefits reaching all aspects of fruit and vegetable production and processing practices, marketing, and consumption. Consumer demand drives fruit and vegetable production, processing and marketing decisions. A majority of consumers share concerns about fresh and processed fruit and vegetable product availability and quality, caloric and nutritional sufficiency, and product safety. Layered upon this, consumer tastes, preferences, and values can shape consumer purchase and consumption decisions. This has resulted in the proliferation of food production, process, and handling standards, certifications, and labels with claims concerning socially and environmentally responsible production characteristics, geographic origin, organic status, and other attributes. The use of these voluntary programs enables firms to transform fresh commodities into high value differentiated food products.
Outcomes of this project proposed objectives are expected to provide benefits for businesses, government agencies, and technical assistance providers who seek to improve the performance of the industry with better information and assessment of areas where market performance could be more efficient or effective. The research generated by S-1067 will be a valuable input to improve the ability of the USDA, food companies, and university researchers and extension programs that support producers and food manufacturers to develop products that target consumer preferences and needs. The information and resources generated by the S-1067 team members will enable these programs to better help producers understand the cost and benefits of adopting production and processing practices that address the changing production environment and consumer preferences and needs, as well as labels that aim to address those consumer needs.
Project team members will develop and update studies related to marketing issues that affect both producers and consumers, including studies which assess producer acceptance and willingness to use production/processing practices, novel technologies, technology innovations that address consumer needs; short- and long-term costs and benefits of adopting these practices and technologies at the farm and industry levels; benefits and costs to producers of government and industry-led programs; the impact of these programs on farmers' production and technology adoption decisions, global supply, trade, and consumer preferences; consumer demand for various products attributes; and supply chain innovations.
From a consumer perspective, it is essential to focus on the understanding of how consumer perceptions and consumption decisions are influenced by various types of marketing information. Examples of marketing information include differential nutrition, food safety, implied economic implications to family farms, and carbon footprint of different production systems. A better understanding of food labeling strategies offers significant benefits to firms and entrepreneurs involved in food manufacturing and processing, as well as researchers in the health science arena that examine factors affecting linkages between nutrition and health outcomes. Importantly, many of these attributes relate to environmental and social concerns, including such aspects as “fair trade” for fair treatment of workers, “locally” grown or sourced, wildlife and biodiversity preservation, and sustainability of agricultural production and transportation. Understanding drivers of consumer demand for these product attributes has important implications for the well-being of agricultural workers, those engaged in smaller-scaled agricultural production systems (both domestically and internationally), small-holder farms, animals, and the environment.
The specialty crop marketing channels that connect consumers and producers take many different forms and present a variety of unique research needs. Our work will help inform producers, consumers, and intermediaries about the benefits and cost of participating in these marketing channels. Our research results can also enhance the effectiveness of these marketing channels by providing evidence about the methods, policies, organizational structures that yield the best outcomes for producers, consumers and marketing channel intermediaries. Also, in partnership with industry, government and non-profit organizations, we will help facilitate and evaluate new marketing channels for specialty crops.
Related, Current and Previous Work
An overview of CRIS Search
Searches were conducted using several different key terms, including produce, marketing, supply chains, and consumer demand. Results showed many complementary studies to the proposed S-1067 project, with a significant share in the states (and with partners) that also participate in this project:
- Fresh produce supply chain. We found 23 records, with four active at this time – not including the previous S-1067 project, and a majority in states or with investigators that directly or indirectly participate in this project.
- Fresh produce consumer demand. There were only 10 records, and none are currently active.
- Fresh produce and consumer behavior. This search revealed four records, with two active at this time.
- Fresh produce and health. Twenty-two active and 28 terminated records resulted from this search; a majority focused on food insecurity.
- Fresh produce and sustainability. One record was found focusing on post-harvest spoilage of fresh whole and cut produce.
- Fresh produce and global. This search identified one active record, and two terminated records. The active record focuses on labor management in specialty crop operations.
- Specialty crop production practices. This search identified two active records, and nine terminated records. One of the active records focuses on production practices that allow increased production on- and off-season to satisfy consumer demand. Four of the terminated records focused on season extension technologies, the production of new vegetable crops, and the adoption of production practices that could meet consumer preferences and demand.
- Specialty crop novel technologies. This search identified one terminated record. This record focused on the use of unmanned aerial vehicles in the production of fruit and vegetable and nut crops. The motivation of this record was not necessarily tied to consumer preferences and needs.
This committee's relationship with other regional research committees
Several research projects appear to complement our work but are no longer active. They include:
- NC-219: Using Stage Based Interventions to Increase Fruit and Vegetable intake in Young Adults.
- NC-222: Impact of Technology on Rural Consumer Access to Food and Fiber Products.
- NC-1036: Research and Education Support for the Renewal of an Agriculture of the Middle.
- NE-165: Private Strategies, Public Policies, and Food System Performance.
- NE-185: Commodities, Consumers, and Communities: Local Food Systems in a Globalizing Environment.
- NE-183: Multi-disciplinary Evaluation of New Apple Cultivars.
- NE-505: Private Strategies, Public Policies, and Food System Performance.
- NE-1008: Assuring Fruit and Vegetable Product Quality and Safety Through the Handling and Marketing Chain.
- NE-1012: Sustaining Local Food Systems in a Globalizing Environment: Forces, Responses, I
- NE-1023: Improving Plant Food (Fruit, Vegetable and Whole Grain) Availability and Intake in Older Adults.
- S-1016: Impacts of Trade and Domestic Policies on the Competitiveness and Performance of Southern Agriculture (S-287).
Some of our members have served on these committees in the past, and priorities that resulted from work in those teams influenced the objectives chosen for this project.
There are also several active projects that may be useful for us to interact with, or reach out to, as our work progresses.
- NC-140: Improving Economic and Environmental Sustainability in Tree-fruit Production through Changes in Rootstock U
- Several S-1067 partners actively work on wine grape marketing issues and continue to look for specific means to link it with corresponding production research.
- NCCC-212: Small Fruit and Viticulture Research.
- S-294: Quality and Safety of Fresh-cut Vegetables and Fruits.
- NCERA-210: Improving the Management and Effectiveness of Cooperatively owned Business O
- W-3150- Breeding Common Bean (Phaseolus vulgaris L.) for Resistance to Abiotic and Biotic Stresses, Sustainable Production, and Enhanced Nutritional Value; new W_TEMP_4150: Breeding Phaseolus (common) Beans for Resilience, Sustainable Production, and Enhanced Nutritional V
- NE-1749: Enhancing Rural Economic Opportunities, Community Resilience, and E
- NC-1034: Impact Analyses and Decision Strategies for Agricultural R
- WERA-72: Agribusiness Scholarship Emphasizing Competitiveness.
- SERA-47: Strengthening the Southern Region Extension and Research System to Support Local & Regional Foods Needs and Priorities.
In sum, there are commonalities with other regional research committees in the CRIS system. When looking closely at the projects that center on similar topics as S-1067, we found that most of them are related to health aspects of specialty crops, supply chain, production practices, and consumer behavior. There are not very many projects covering the areas of consumer demand or novel technologies, therefore the impending need for S-1067.
Although multistate projects NC-140, NCCC212, and W3150 focus on specific production practices and novel technologies that might be considered in the S-1067 project, they do not explore the connections between these production practices and consumer demand, and the overall farm costs and benefits of adopting these practices and technologies. We are likely to interact with members of these projects, as these groups might be interested in exploring the demand implications related to the production practices and technologies they are exploring, as well as the relative costs and benefits of adopting these practices and technologies at the farm level. By strengthening the connection of the S-1067 project with these projects in this way, we are helping expand the impacts of the abovementioned projects.
The rest of the active projects listed in this section are directly or indirectly related to objectives 2, and 3, due to their focus on business models, value chain innovations, and food systems. However, none of them focus specifically on specialty crops. We will collaborate with members of other projects in specific publications and other project outputs when appropriate.
Research by previous S-1067 committee members
Between 2015 and 2019, previous S-1067 members obtained 51 grants that resulted in the authorship of 213 refereed journal articles, along with 217 outreach industry presentations, 150 extension/outreach industry publications, 121 academic presentations, 27 books or book chapters, 22 refereed conference proceedings, 30 reports to states, stations or agencies, and 41 blog posts. While the extent to which these outputs have increased economic profitability for domestic fruit and vegetable producers and marketers is not known, the academic contributions have advanced the assessment of the implications for consumers and producers of domestic and global shifts and have contributed to improving the adaptation of producers, wholesalers, retailers, and consumers to new dynamics.
Below we provide several examples of research that the S-1067 members have worked on or are currently working on to address issues related to the production, marketing and consumption of fruit and vegetables. These examples are organized according to the stakeholder groups affected by and benefiting from this research.
- Agri-food production, marketing, sales enterprises, and related industry associations
- At Purdue University, Ariana Torres collects weekly prices of specialty crops sold at farmers’ markets in Indiana in collaboration with Purdue AGSEED and the Indiana Vegetable Growers Association. Data has been accessible to farmers, farmers’ market managers, and farmers’ market customers, via the Horticulture Business Extension Program website since January 2017. Similarly, Tim Woods at the University of Kentucky and Margarita Velandia at the University of Tennessee have collaborated in collecting prices of specialty crops sold at various Kentucky and Tennessee farmers’ markets since 2013 (the University of Kentucky has been collecting prices since 2004), and posting them weekly at the University of Kentucky Center for Crop Diversification website.
- Zoë Plakias, at Ohio State University, and Dawn Thilmany and Becca Jablonski, at Colorado State University, are engaged in several projects using data from the National Farm to School Census and other national data sets to understand the role of K-12 schools in the US as buyers of local foods.
- Esendugue Greg Fonsah (University of Georgia) led the economic productivity and profitability analysis for whiteflies and tomato yellow leaf curl virus (TYLCV) management options that revealed an expected profit margin of $1,958/acre for growers who adopt these management techniques. This study further depicted that farmers adopting this technique could earn up to $4,802/acre 7% of the time with an 85% chance of obtaining profit. The impact of this study is worth over $50 million to the tomato industry.
- S-1067 members Brad Rickard (Cornell University) and Karina Gallardo (Washington State University), are collaborating with researchers at UC Davis to launch a consumer survey to assess consumer demand for specific table grape cultivars. This work is funded by USDA-SCRI project VitisGEN2. Continuous improvements in genetics and varietal innovation for table grapes require researchers to uncover the traits that are most important to inform the plant breeding choices in this industry. Rickard plans to conduct similar work studying traits in patented hops varieties that are becoming increasingly popular with craft beer producers in the U
- S-1067 members from Rutgers University (Ramu Govindasamy), Pennsylvania State University (Kathy Kelley), and Cornell University (Brad Rickard) have worked on wine promotion, particularly wine produced in NJ, PA, and NY.
- Organizations involved in facilitating fruit and vegetable marketing and risk management
- Research by Kathryn Boys (North Carolina State University) looks at product liability and product contamination insurance for specialty crop producers who are often involved in the marketing of the products to final consumers or institutions. Insurance products for this type of risk are new, and premium levels are not well related to risk levels. A better determination of a fair premium and insurance contracts to address liability risk from foodborne illness outbreaks would be useful for farmers and insurance companies alike. These new insurance products are independent of the federal crop insurance program.
- Government researchers and administrators, Industry representatives; 5. Elected officials
- Dawn Thilmany (Colorado State University) was part of the team, together with the National Sustainable Agriculture Coalition and USDA ERS, to call attention to the impact of the COVID-19 pandemic on small farms. The team identified a projected $689 million decline in sales over three months based on projected losses from farm-to-school sales, food hubs that aggregate food from small farms to sell to restaurants and other institutions, and shuttered farmers’ Several policymakers noted this and acted upon the information, including Rep Chellie Pingree (D-Maine), Farm Aid, the Heal Food Alliance, and former staffers of Senator Elizabeth Warren’s (D-Massachusetts) presidential campaign, who urged lawmakers to include credit and debt relief for farmers and access to emergency grants and loans. Based on this work, the Executive Director of the Farmers Market Coalition, Ben Feldman, advocated to introduce flexibility into Federal programs that support small farms, like Value-Added Producer Grants and Farmer’s Market and Local Food Promotion programs. Extensions of this work are currently underway through collaborations with S-1067 members from Colorado and North Carolina.
- Brad Rickard (Cornell University) examines consumer demand for diversity in the wine market in regions with different policy environments using market scanner data. The focus of this research is on the role public policies play in determining consumer purchasing patterns. His research results show clear evidence that consumers purchase a wider array of wines (and beer) when wine (or beer) is more widely available. He tested various hypotheses using a subset of consumers that belong to the Nielsen panel and have moved between policy environments. He found that among these so-called “movers” there is additional empirical evidence that consumers in states with less restrictions on the retail availability of wine and beer are more likely to seek a wider range of products. The impact of this study centers on a key policy issue across many states that are considering liberalizing regulations that govern where alcohol can be sold. The research is offering guidance to policymakers on how such deregulation will affect consumer choice.
- At the request of the Georgia Fruit and Vegetable Association (GFVGA), Esendugue Greg Fonsah (University of Georgia) estimated the cost per acre of bare-ground vegetable production damaged by Hurricane Michael in Georgia on October 1, 2019. He submitted the results of this study to the Georgia Commissioner of Agriculture, Mr. Gary Black, who subsequently forwarded it to the congressional offices in Washington to secure Disaster Relief Assistance Funds to support affected bare-ground vegetable growers in this state.
- Whole Supply Chain
- In Nebraska, John Beghin, Lia Nogueira and Kate Brooks initiated a multidisciplinary research program on pulse markets. The program considers the whole supply chain, from producers to food processors and final consumers, integrating economics with agronomic and food science components. The project analyzes the sustainability and global competitiveness of US pulses. The target audience for this project includes pulse farm operations, policymakers, commodity groups such as the Nebraska Dry Bean Commission, the Northern Pulse Growers Association, and the American Dry Bean Council, among others, the University of Nebraska Extension, and the food industry.
- S-1067 members from the University of Kentucky (Tim Woods), and Clemson University (David Lamie) are collaborating in creating a local food systems vitality index that may serve as a tool to assess the performance of and benchmark local food systems in various communities.
The proposed research in the renewed regional project will address new and emerging consumers' concerns on process attributes and cultural dimensions of specialty crops, complementing previous research, such as those of local food, the carbon footprint of food, and food safety (post-pandemic focus). It will also address the rapid technological progress in specialty crop production, such as genomics and new breeding methods, and their use in the production of novel specialty crops. These imply tradeoffs for consumers between benefiting from new traits, but at the cost of accepting new technologies with which they are not comfortable. Finally, the aftermath of the COVID-19 pandemic will be significant. The balance of preparation and consumption of food away from home and at home has changed dramatically, including for foods based on specialty crops. Supply chains for specialty crops and processed food based on them will be reorganized to save on labor and to reorient products to be consumed at home rather than in restaurants and food services. These consequential changes will be analyzed.
Analyze the relative benefits and costs for fruit, vegetable, and other specialty crop farmers of:
Comments: a) the adoption of production and processing practices (e.g., organic, biodynamic farming, adaptation to climate-extremes) and novel technologies at the field level (i.e., mechanical harvesting, biodegradable plastics, gene-edited varieties) that address both the changing production environment and the consumer preferences and needs that will be explored in Objective 2; and b) government and industry-led programs aiming to address consumer preferences and needs while guaranteeing the viability of farm businesses (e.g., certifications, plastic pollution regulations, Farm Workforce Modernization Act).
Investigate the policy and market factors that affect the demand for fresh and value-added specialty crop products, including consumer understanding, perceptions, and behavioral response to non-conventional systems of agri-food production (e.g., organic, biodynamic, hydroponics, vertical growing), and the production and processing practices, and some of the novel technologies explored in Objective 1; commodity and regional marketing programs; voluntary labeling schemes (e.g., Fair Trade, Bee Friendly Farming, SIP Certified, geo-identified, integrated or “stacked” labels); product country of origin; international trade, food safety incidents and food safety risk-reducing practices (e.g., traceability systems), among others.
Identify drivers and implications related to the use of various specialty crop marketing channels at the local, regional, national and international scales, including profitability of participation by farmers and intermediaries; benefits and costs for consumers and communities to participate; impacts of various sources of risk and uncertainty; the role of institutional marketing innovations; presence and impacts of market power; implications of supply chain management practices; resiliency of supply chains to shocks; and costs and benefits of policies that impact specialty crop marketing channels.
Methods<p>In this section, we discuss methods that correspond to each of the preceding objectives. </p> <p><strong>Objective 1</strong> We will address producers' acceptance and willingness to use production and processing practices, novel technologies, and technological innovations that address consumer needs. We will also evaluate the short- and long-term costs and benefits of adopting these practices and technologies at the farm and industry levels. In addition, we will explore the relative benefits and costs to producers of government and industry-led programs, as well as the impact these programs have on farmers’ production and technology adoption decisions, global supply, trade, and consumer preferences. Although we will cover a variety of topics, we will make a particular emphasis on labor issues faced by the produce industry, as this issue is one of the most important issues facing this industry, and is one that has a direct impact on produce availability, wages, and, ultimately, prices paid by consumers (Hertz and Zahniser, 2013; Richards, 2018). The COVID-19 pandemic revealed the importance of labor on the production of fruit and vegetables, forcing slight temporary modifications on the H-2A program (Velandia, Wszelaki, and Bailey, 2020) to guarantee an appropriate labor supply to avoid additional disruptions in the fruit and vegetable supply chain. Mechanization as a short and long-term alternative to solve labor issues, and ultimately disruptions in the produce supply chain will also be evaluated.</p> <p>We will use a broad range of methods, including experimental economics with choice experiments and other survey methods, like the ones used in Velandia et al. (2020a, 2020b) to evaluate the factors correlated with the use of biodegradable mulches among fruit and vegetable farms and Mulibi et al. (2019) to assess the factors influencing the adoption of sustainable agricultural practices; partial budget analysis (Velandia, Wszelaki, and Galinato, 2019); feasibility studies; risk assessment; and econometric analyses using data collected from surveys and other sources.</p> <p>Partial budget analysis and feasibility studies will use innovative crop budgets. Three innovative components of these budgets will include: 1) scale-appropriate information that addresses different farm sizes and different targeted customers; 2) revenue streams that are closely linked to WTP studies to highlight how changes in consumer demand affect farm-level profitability; and 3) interactions between biophysical, climatic, and management factors and the costs of production. We will combine field trial, on-farm experiment, and secondary data to develop deterministic budgets (Velandia, Wszelaki, and Galinato, 2019; Fonsah et al., 2018; Kaninda et al., 2018; Ahmadiani et al., 2016). We will also use stochastic budgeting to analyze the risk associated with producer’s decisions (Awondo et al., 2017).</p> <p><strong>Objective 2 </strong>We will use a variety of demand analysis methods to understand and predict consumer behavior in the specialty crop markets of interest.</p> <p>We describe these methods according to the main goals of demand analysis - forecasting, measurement, and testing the impact of policy or marketing strategy changes on demand (Chintagunta and Nair, 2010). Demand estimation and forecasts are important for predicting future firm or aggregate market sales and growth, firm inventory planning, and revenue and profit consequences of alternative marketing strategies (e.g., pricing strategies) and can be used to understand consumer reactions to novel products or changing market conditions. Analyses focused on measurement assess a variety of measures, from observed data such as consumer welfare, beliefs, risk, or other preferences. These analyses can be structural, with explicit assumptions on preferences and information on consumer characteristics (i.e., demographic information, beliefs, preferences), or impose minimal structure such as experiments which use randomized control trials with a marketing intervention as the treatment. A third option is to use nonparametric models of demand. When combined with information on exogenous variation in demand, nonparametric approaches can address some common issues with the approaches described above, and measure casual effects with minimal assumptions (“causal-effects” or “reduced-form” analyses). Finally, analyses may be focused on testing or evaluating the impact of policy, or marketing strategy or tactic changes on consumer demand for raw or processed fruit and vegetable products. For example, these analyses might examine the impact of providing online ordering options to visits at Pick-Your-Own fruit operations, or the impact of a bundled product pricing strategy. While randomized experiments are ideal, simple models that exploit exogenous variation are also used for these analyses (Chintagunta and Nair, 2010). Sensitivity testing is often used to assess if the results are robust to model assumptions.</p> <p>It is worth noting that much of the consumer demand analyses that will be undertaken by S-1067 members will be tackled through interdisciplinary research or which have important interdisciplinary implications. A variety of research techniques can be used to offer insights into consumer preferences and tradeoffs, which, in turn, can inform the development of new production practices, plant varieties, and fruit and vegetable products, and marketing techniques. Economic experiments, for example, can make use of sensory evaluations to understand how much consumers value taste, mouthfeel, and other palatability attributes, and preferences can adapt to repeated exposure (experience). A collaboration among project members in Washington and New York (among other states) is using economic approaches to estimate table grape consumers’ trade-offs between fruit quality and production characteristics, and the acceptability of novel technologies such as gene editing. Another collaboration between project members in Washington and Mississippi is assessing consumers’ most preferred sensory quality traits for blueberries, and processed cranberries. Other interdisciplinary work includes a project being led by collaborators in North Carolina, which integrates a multi-disciplinary team of agricultural economists, sociologists, biological engineers, and horticulturalists to quantify farm-level food loss for several types of produce crops common in the US Southeast, and estimates the monetary impact of this loss. </p> <p><strong>Objective 3 </strong>To undertake this objective, our S-1067 members will engage in numerous types of analysis. Descriptive assessment of current fruit and vegetable market structure and production trends can provide a benchmark for evaluation of changes in marketing strategy, either <em>ex-ante </em>or <em>ex-post</em> (e.g., Jablonski, Sullins, and Thilmany McFadden 2019)<em>.</em> Case studies, anecdotal evidence, literature reviews, qualitative analyses, and econometric analyses are all tools also likely to be employed in descriptive models, and econometric analyses can also be employed in both descriptive models and causal inference (e.g., Boys and Fraser 2019; Cleary et al. 2019; Plakias, Demko and Katchova 2019). Simulation methods may adopt game theoretic techniques to provide an analysis of strategic interaction between agents in marketing channels. Game theory allows such interactions to be modeled in a context of imperfect competition and can be used to analyze agents' behavior in domestic, bilateral, or multinational policy setting arenas (e.g, Rickard et al. 2018). Results will contribute to a better understanding of the underlying market structure in fruit and vegetable industries and may increase the multi-state research effort of transferring insights to other cases, firms, or industries. Specific examples of how these methods will be employed by current members are included below. </p> <p>Qualitative research undertaken by members in Colorado, Kentucky, North Carolina, Ohio, and Tennessee, including interviews and participatory supply chain mapping activities with specialty crop supply chain stakeholders, will help us better understand motivations and barriers of these stakeholders in complex local and regional supply chains and marketing channels. For example, researchers in North Carolina are interviewing supply chain stakeholders to assess opportunities for developing new marketing channels that move imperfect produce from producers’ fields to consumers’ plates. Researchers in Colorado and Ohio are taking advantage of qualitative data collected from public school nutrition directors to understand procurement practices by public K-12 institutions, and the implications for specialty crop producers and supply chain businesses. Researchers in Tennessee are interviewing organizations with a food justice mission that have innovative business models connecting small, limited-resource farms with low-income food insecure households to evaluate the ability to replicate their marketing channel models in the southeastern US in a financially viable way.</p> <p>A wide variety of reduced-form and structural econometric methods will also be used to analyze primary data and secondary data collected from food system stakeholders. These methods will be used by S-1067 members in states, including Colorado, Kentucky, Indiana, New York, North Carolina, Ohio, Oregon, and Tennessee, to answer important questions and test key hypotheses related to this objective. New primary data will be collected via surveys, and research will facilitate the collection of transaction data from specialty crop marketing venues, including farmers’ markets and produce auctions. Also, members will continue to develop and update new data products that can be used in a variety of analyses by all of our S-1067 members. For example, researchers at the University of Kentucky have developed a Local Food Vitality Index that can help inform specialty crop supply chain actors and local food marketing channel development (Rossi, Woods, and Davis, 2018). While this index considers the characteristics of local food systems, researchers in Colorado are cataloging the specific characteristics of state policies around the US that support Farm to School programming so that the impacts of specific policies or policy combinations on supply chain actors can be better understood. </p> <p>In addition, simulation models calibrated with data on trade flows, agricultural production, marketing practices, and other variables will be used by researchers in states including Indiana, Ohio, and Nebraska to conduct <em>ex</em><em>-ante </em>analyses to understand the possible impacts of policies or other shocks that may affect specialty crop marketing channels and conduct benefit-cost analyses to inform supply chain stakeholders. Researchers in Indiana are also conducting a cost-benefit analysis of expanding marketing windows for specialty crop producers. </p> <p>Finally, a combination of these methods will be used by researchers in Colorado, Kentucky, Nebraska, and Ohio to understand and facilitate marketing opportunities for specific specialty crops (for example, hemp and pulses), and to develop and evaluate innovative specialty crop marketing channels. Examples of the latter include providing local produce through employer-based wellness programs and rural corner store initiatives. </p>
Measurement of Progress and Results
- ● Several realistic and substantial outcomes are expected from project members’ individual and combined efforts, which will be disseminated through peer-reviewed publications, association journal articles, popular press articles, extension presentations and organized research sessions. It is important to note that the project team is not merely focused on scholarly channels but is also committed to developing materials informed by research outcomes that are accessible and relevant to stakeholder groups. These groups include: industry associations, retailers, food processors, direct marketers, farm organizations, and interested consumer audiences at national, regional and state-level meetings. As a team, we will also strive to engage with one new, relevant stakeholder group within the first two years of the S-1067 project.
- ● We will disseminate research results to academic, government, and supply chain stakeholder audiences via: (1) a diverse series of publications (e.g., journal articles, case studies, industry reports, fact sheets, extension bulletins, online publications, and webinars); (2) decision tools and policy briefs; (3) integrated data series and market databases that provide market assessment and coordination tools for stakeholders; and (4) presentations at professional, industry, and extension meetings.
- ● Members will also contribute a number of additional valuable outputs for academic and non-academic stakeholders. We will collaborate on and distribute survey instruments, experimental auction scripts, and other research tools in order to ensure all our members are engaged in “best practices” and to enable cross-state comparisons in our research. We will develop joint proposals for organized symposia through the Specialty Crop Economics; Agribusiness Economics and Management; Community and Regional Economics; Extension; Food and Agricultural Marketing Policy; or Food Safety and Nutrition track sessions at future Agricultural & Applied Economics Association meetings, and present our findings at the Food Distribution Research Society meeting, which generally coincide with the S-1067 annual meeting. In addition, members also frequently participate in the annual meetings of other groups such as that for the Southern Agricultural Economics Association, the Western Agricultural Economics Association, the International Association for Food Protection, the Food Safety Consortium at which findings derived from the S-1067 project results may also be presented. We will also submit a proposal for a “special issue” to Choices, the Journal of Agribusiness, the International Food and Agribusiness Management Review, or the Journal of Food Distribution Research in year three, and at least two other "theme" issues in the agricultural and applied economics or agribusiness fields over the term of the project. Other collaborative publications will focus on local and regional specialty crop supply chains, emerging issues related to sustainability in these supply chains, specialty crop quality and safety, and the role of specialty crops in relation to health and wellness. We will also prepare and submit at least one multi-state grant proposal to a USDA National Institute of Food and Agriculture program based on one of the team’s specific objectives.
Outcomes or Projected Impacts
- ● The potential impacts of this work are threefold. We will: (1) generate new insights about costs and benefits associated with various aspects of specialty crop production, demand for specialty crops, and specialty crop supply chains; (2) enhance and facilitate coordination among specialty crop supply chain participants; and (3) provide actionable recommendations that can be used by policymakers and supply chain stakeholders to improve outcomes for specialty crop producers, consumers, and supply chain businesses.
- ● Previous work by committee members has been used by a broad set of stakeholders to make marketing and business planning decisions, inform strategic planning exercises, assess potential implications of proposed policy measures, and substantiate demand for growing market segments. Future work will provide important resources by building on the substantial existing research and expertise of our members to address emerging topics of interest and concern among stakeholders such as: o Local and regional specialty crop supply chains (e.g., farm to school policy impacts, institutional and municipal “buy local” policies, etc.) o Sustainability in specialty crop supply chains (e.g., use of plastic in agricultural production and packaging, food waste throughout the supply chain, etc.) o Specialty crop quality and safety (e.g., new systems for traceability, fraudulent food labels, etc.) o The role of specialty crops in relation to health and wellness (e.g. produce Rx programs, employer-funded Community Supported Agriculture programs, etc.) o Resilience and innovation in specialty crop supply chains (e.g., due to the Covid-19 pandemic)
Milestones(2021):Members will propose at least one track session for submission to the 2022 Agricultural and Applied Economics Annual Meeting.
(2022):Members will develop ideas for a special issue journal devoted to one of our three identified objectives, to be published by 2023.
(2023):Members will develop at least one symposia or session to disseminate research results to relevant stakeholder groups outside academia.
(2024):Members will frame at least one coordinated project by the Fall 2024 meeting, with proposals developed for 2025 USDA, industry, philanthropic, or other (e.g., NIH, community health) grant programs.
(2025):Members will frame at least one coordinated project by the Fall 2024 meeting, with proposals developed for 2025 USDA, industry, philanthropic, or other (e.g., NIH, community health) grant programs.
Projected ParticipationView Appendix E: Participation
Results will be published in peer-reviewed journals, extension publications, trade publications, and popular press publications, and will be made available on the internet. Committee members will make a special effort to participate in meetings targeting underserved populations including female, part-time and small and mid-sized producers and supply chain businesses, and other minority groups.
A broad-based outreach plan will be developed to assist trade organizations, producers and supply chain businesses with accessing and using the results of members’ applied research. Business models, marketing strategies, and decision tools informed by committee members’ research will provide producers and supply chain businesses with the ability to assess the economic costs and benefits of adopting different production, marketing and business strategies and distribution approaches. In addition, fact sheets produced by members will help provide accessible information about applied research outcomes and enable specialty crop stakeholders to make evidence-based decisions. Extension publications will be developed, published, and posted on the internet. Possible online venues for such factsheets and publications, include members’ respective web pages, the MarketMaker web page, and eXtension. Members will also make presentations to marketing, horticulture, and certification organizations. Several team members have had summaries of their research published in trade association newsletters, or they have been invited to present the findings at annual meetings. This is expected to continue within this project, given the applied nature of the research.
The committee governance structure consists of a chair and chair-elect, both of which serve two-year terms. Nominations are requested in the Fall, with terms beginning in October (when typically the group meets along with the Food Distribution Society annual meetings). Duties performed by the committee leadership include organizing the annual meeting and requesting its authorization from the administrative advisor, conducting the annual meeting, completing and submitting the annual report, recruiting new members, and facilitating the organization of special issues in academic journals, symposia, presentation sessions, and similar research/outreach activities. Research planning and coordination will be conducted by establishing subcommittees for each project objective
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