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Agricultural News

Willingness to Pay Drops Across the Board in Latest OSU FooDS Survey

Thu, 17 Nov 2016 11:29:46 CST

Willingness to Pay Drops Across the Board in Latest OSU FooDS Survey The November 2016 edition of the Food Demand Survey (FooDS) is now out and Dr. Jayson Lusk of Oklahoma State University has blogged about it:

"The regular tracking portion of the survey suggest lower food demand overall. For example, willingness-to-pay for all meat products fell by at least 8%, and reported spending on food at home and away from home fell by 5.7% and 10.5%, respectively. Some of the WTP declines may be due to post-election uncertainty (the surveys were completed on November 10 and 11). In addition, reported consumer awareness of all 18 issues we track fell in November relative to October as did reported concern for the same set of 18 issues.

"Three sets of new ad hoc questions were added this month.

"The first question came about as a result of discussion with my OSU colleagues Damona Doye and Dave Lalman who have been exploring some alternative cattle production systems. At issue is what the new systems should be called. Thus, participants were asked: "Imagine shopping at your local grocery store for ground beef. What is the most you would be willing to pay ($/lb) for a package of ground beef that had the following labels? (Note: The current average price of ground beef in the U.S. is around $3.66/lb)"

"Participants stated they would be willing to pay the most for ground beef labeled as "grass fed" at an average WTP of $4.26/lb followed by ground beef labeled "organic" at an average WTP of $4. 24/lb. Semi-free range was valued more than semi-confinement ($3.78 vs. $3.28). Participants stated they would pay the least amount for unlabeled ground beef at an average price of $2.92/lb. The sampling error for each WTP value is about +/- $0.15/lb with 95% confidence (thus, if two means are $0.30/lb apart or more, they are statistically different).

"Next, participants were asked: "Farmers rely on fertilizers to promote plant growth and grow more food. How desirable or undesirable would you consider it to eat a fruit or vegetable grown with the following fertilizers?" Individuals responded on a five-point scale: 1=very undesirable, 2=somewhat undesirable, 3=neither desirable nor undesirable, 4=somewhat desirable, or 5=very desirable.

"Over half of the participants (correctly) believed that the use of animal manure as a fertilizer was allowed in organic agriculture. About 38% of respondents (incorrectly) believed fertilizer created through a process that uses natural gas and nitrogen air was an allowed fertilizer in organic agriculture. Only 13% of participants thought that municipal waste was an allowed fertilizer in organic agriculture (see here for a discussion of allowable fertilizers in organic). The sampling error is about +/- 3% with 95% confidence.

"A couple comments. First, it is curious that the fertilizer most respondents thought was allowable in organic (manure) only only believed to be allowable by about 50%. It raises the question: how do respondents think organic producers fertilize their crops? Perhaps I should have allowed that as a response option (e.g., something like "no added fertilizers are allowed in organic production"). Second, comparing the two graphs above, it is curious that the most desirable type of fertilizer (created via Haber-Bosch) is disallowed in organic agriculture - a fact that roughly 61% of respondents appear to recognize."

You can review Dr. Lusk's blog by clicking here- and you can see the complete Food Demand Survey for mid November by clicking here.



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