Meat Slaughter and Processing Plants’ Traceability Levels Evidence From Iowa

Hypothesis 1: The more credence attributes, as opposed to experience and search
attributes in the marketing of meat products include, the more stringent the traceability is
for verification purposes.

Hypothesis 2: The branded meat is associated with more stringent traceability than
commodity meat for quality control purposes.

Hypothesis 3: Being exporter requires more stringent traceability adoption.

Hypothesis 4: Relying more to spot-market, as opposed to contracting, for supplier base
facilitates less stringent traceability.

Hypothesis 5: The level of traceability adopted increases with the risk of food safety
failure in meat products.

Hypothesis 6: Having an already a quality assurance system in place such as ISO 9001
(2000), Quality Assurance Systems (QAS) lead to more stringent traceability.

Hypothesis 7: The sizes of firms matter for the level of traceability they adopt.

Hypothesis 8: The more capital intensive plants adopt a more stringent traceability level.

Hypotheses 1), 2), and 3) refer to product specific factors, 4) is for organizational factors,
5) is for food safety related factors, and 6), 7), and 8) are for plant specific factors. We
elaborate on these hypotheses in the following:

For hypothesis 1); credence attributes such as claims on geographical origin, animal
welfare, humane treatment of animals, no use of antibiotics or growth implants, feed
related (naturally fed), genetics (e.g. Angus beef), need to be verified at the farm level in
order to be credible (Latvala and Kola, 2003). For experience and search attributes (taste,
tenderness, palatability, freshness, appearance, color), consumers are presumed to be able
to discern these attributes. If promised quality is not delivered in terms of these attributes,
the product may not receive the repeat purchase. Branding can communicate the
experience attributes well. Buhr (2003) compares traceability as a means of resolving
information asymmetry in the supply chain to traditional means, such as, branding, repeat
purchases, third party certification (could be USDA grading or non-profit organizations
such as Food Alliance ⁸). He argues that branding can be solution for information
asymmetry at retail-customer interface but not necessarily at interfaces at upper stream,
(such as supplier and processor). The reason given for the latter is that retailers do not
have full control over raw materials and quality uncertainty. He suggests that traceability
will be preferred more over the traditional means if there are more information
asymmetry in the upstream versus downstream process, lower task observability, higher
production quality/quantity uncertainty in the upstream suppliers, and higher supervision
and/or monitoring costs of tasks and attributes. He also argues that for credence attributes
⁸ More information about this organization can be found at http://www.foodalliance.org/ .

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