GMO-Free Cheese and Consumer Education: A Whey Forward.

A few things caught my attention on Twitter and elsewhere this week.  One thing I liked (maybe as it fits my beliefs that firms should be able to do what they want with their own money) is Gord Gilmour’s op-ed on GMO-free cheese by Manitoba firm Bothwell.  While the science is overwhelmingly clear that GM products pose no health risk for humans, there are still some folks who do not wish to consume these products.  Bothwell took this as an opportunity to work with those in their supply chain (farmers) to see if they could source some milk produced using GMO-free feed.  It seems enough farmers agreed that they could make this work that the plan was set in motion. I’ll be interested to see how the market responds.

http://www.manitobacooperator.ca/editorial/editorial-on-marketing-consumers-and-gmo-free-cheese/

http://www.producer.com/2016/11/manitoba-company-to-make-gm-free-cheese/

Some say that the industry should educate consumers (everybody’s an educator now, I guess) instead of providing products and services that consumers demand.  I generally have two issues with this line of reasoning.  First, what is the plan if after the consumer is ‘educated’ they still want the product that you are not producing? Do you then produce it as the education plan was not effective or do you pass on the opportunity to create a customer?  Either choice could be correct based on firm-level economics, but it is overly simplistic to think that consumers can be brought back to the commodification of retail food products through education.  Secondly, and this is more from a marketing theory perspective, as stated by Peter Drucker, the purpose of the firm is to create a customer. This is done through marketing and innovation.  It’s somewhat hard to do that when a portion of the marketing budget is directed at telling significant amounts of prospective customers that they are in need of more education.

http://www.forbes.com/2006/06/30/jack-trout-on-marketing-cx_jt_0703drucker.html

IF firms within the agricultural supply chain are adamant that they want to be in the education game, then they need to first listen to the customer to see where the information provided can help steer them to your product.  Going on about the safety of GM technology or the features of reduced pesticide application through the technology is irrelevant if this information does not add value or otherwise benefit the customer. Sure, it benefits the producer and perhaps the supply chain, but the information must clearly indicate how this product or process or whatever adds value to the customer.  If the education and advocacy blitz does not solve a problem they have, then it is ultimately not going to have the intended effect.

http://www.businessinsider.com/how-brands-can-educate-customers-2013-4

http://www.forbes.com/sites/williamcraig/2015/04/10/dont-market-to-your-customers-educate-them-instead/#302526d14f61

 

Friday Assorted Links

I’ve always liked what Tyler Cowen and co. do at Marginal Revolution with their assorted links posts, so I thought I would give it a try.

  1. http://www.amestrib.com/sections/opinion/columns/geoff-schumacher-the-great-butter-margarine-controversy.html
  2. http://www.foodbusinessnews.net/articles/news_home/Regulatory_News/2017/01/FDA_gives_guidance_on_link_bet.aspx?ID=%7B9A1F7AEA-D02C-46BF-A836-67518BD32E33%7D&cck=1
  3. http://www.producer.com/2017/01/case-made-for-labelling-but-questions-abound/
  4. http://www.cbc.ca/news/health/how-to-give-babies-peanut-based-foods-to-cut-allergy-risk-1.3922263
  5. http://www.forbes.com/sites/themixingbowl/2017/01/06/why-robotics-will-change-agriculture/#79b2f3d87cda

Reviewer Number Three!

I and a colleague recently had a paper published in Agricultural Systems that examined absorptive capacity and social capital affect the number of new practices adopted on Western Canadian farms.  If you’re interested in reading such things, you can find it here.

Anyway, as I am now ‘known’ to the editors of AGSY, I’m now in their universe of reviewers.  Recently I was asked to review a paper on a topic in my research area for AGSY. Come to find out, I am reviewer number three (gasp!).

First a little background on publishing.  How publishing works is authors devote many hours writing/sharing/presenting/editing a paper, and then they submit it to a journal in their field.  The editor(s) then look at the paper and give it an initial review where they decide to either send it to review or to politely (or not) reject it as not suitable for that publication.  The reviewers are then given some time (2 months, 6 months, whatever) to conduct the peer review and offer comments on revisions to the authors and their opinion if the paper should be published to the editor.  Typically there are two reviewers, but I have seen more (as editors may ask for multiple reviews in case of a slow reviewer but they all come back ‘on time’).

What really burns authors is when REVIEWER NUMBER THREE parachutes into the process after the first round of revisions.  Now the authors have already made changes that R1 and R2 have asked for, but when the 2nd revision comes back, we have these comments from R3 coming out of left field.  Reviewer Number Three is so much of a thing that they have actually made a Downfall parody on it. Watch it here.

I’m not sure what the editors are looking for…do they want a real review or a Reviewer Number Three review?  So conflicted.

 

 

Transforming new practice to new profit

My inbox is telling me it is that time of year again…agricultural show season.  In Saskatchewan, where I work, summer is a good time for producers to become aware of new products, technologies, and ideas that are gaining prominence in agriculture.  Within the past month, producers have had the opportunity to attend the Crop Production Show in Regina, the Western Beef Development Centre’s summer field day, and in a few weeks Ag in Motion will be held just outside of Saskatoon.  Through these events, input suppliers and manufacturers can increase awareness of new tools that farmers can use in their operations.

While the technology and ideas presented at these shows are often fantastic, the entire adoption process has evolved.  Gone are the days of hybrid seed corn when a farmer could simply change the variety that they are planting and still reap a large portion of the benefits of the technology.  With the growth of app-based management tools, becoming a subscriber is just the entry fee; simply owning or subscribing to the technology will yield little benefits.  More likely the benefits will be negative as there are costs to subscribe but few if any returns unless the manager is able to assimilate and exploit the technology for gain.  For profit maximizing firms, this outcome often leads firms to postpone the adoption decision until they can work out how to make the sum of the discounted cash flows of the investment positive.

Recently, I and a colleague at the University of Saskatchewan published a paper on the factors affecting technology adoption in Western Canada.  Using a survey of farmers in Alberta, Saskatchewan, and Manitoba, we found that adoption of new agricultural practices was a function of the firm’s network with others in their community, the life cycle of the farm (is it growing or winding down), and the manager’s ability to become aware of, make sense of, and make use of the technology in question.  The last point is one worthy of greater exploration as that is where there may be untapped potential for future productivity gains in commercial agriculture.  This is especially true as the technologies that come online and currently in development are increasingly interconnected and therefore increasingly complex.  In order to take full advantage of these new technologies, managers may have to begin cultivating their social capital.  Just as financial and human capital enable managers to invest in new ideas and understand new processes, social capital may enable firms to more fully exploit complex systems that are unrelated anything that has been used on the farm previously.  The reason may be that firms with greater social capital may be better positioned to look for the right connections within their networks to help them solve whatever the issue is the manager is facing.

This brings me to an important unresolved question: how many bushels/dollars/hours are we leaving on the table because the technologies we have purchased are not being used to their full potential? What makes those producers who are able to fully exploit new technologies different from those who adopt, but only garner some (but not all) of the benefits?  If you have thoughts on this, please feel free to comment below.