and pre-existing vertical production coordination factors, traceability and traditional
means can be equally desirable.
For hypothesis 2); Meat brands have recently proliferated as part of efforts for
differentiating products and targeting niche markets. Examples for brands include
Target’s Sutton and Dodge, Oregon Trail Beef, Rancher’s Reserve, and Niman Ranch
Beef. USDA Agricultural Marketing Service (AMS) defines branded beef product as
“those boxed beef that are produced and marketed under a corporate trademark or under
one of USDA’s meat grading and certification branch certified programs where the basis
of brand is the quality, yield, or breed characteristics of the product which are not unique
to any one packer and can be produced by anyone in the industry, regardless of the brand
(i.e. CAB® or Sterling Silver®)” (Stone, 2004). The packers, fabricators, distributors,
and restaurants must be licensed in order to produce or sell products under the latter
brands.
Brand can be considered as the implicit contract between customer and the firm.
Sustainable profitability from branding requires consistently delivering the promised
level of quality. This can be achieved with input and process controls, such as adopting
quality assurance systems, and monitoring the compliance with production protocols with
suppliers. Antle (2001) considers identity preservation (a close notion to traceability)
along with testing, inspection, and process control as quality control instruments. With
traceability, the principal firm can better control average quality or variation in quality for
specific supplier, and improve its monitoring. For example, Niman Ranch group’s nearly
500 suppliers must comply with strict production protocols. This brand’s niche is based
on the presumption of good taste is mostly determined by good husbandry (all natural
feed, avoiding stress on animals, humane treatment, etc) of animals along with breed
effects. Furthermore, as seen in recent pet food poisoning incidences, branding may
provide a shield against food safety problems to externalize the food safety problems to
other brands (Thomsen, Shiptsova, Hamm, 2006) but that requires credible demonstration
of a brand’s control over its supply chain.
For hypothesis 3); export markets Europe and Japan adopted more stringent and
sophisticated traceability systems compared to other countries (Souza-Monterio and
Caswell, 2004). In order to qualify to export to Japan, producers should verify age of
their animals via Process Verified Programs (PVP) or Quality System Assessment (QSA)
Programs, which facilitates traceability of cattle to production records. For European
Union, there are specific requirements regarding hormones and feed (non-hormone
treated cattle program) that U.S. beef exporters must meet. In meeting the demands of
Export markets, because self-certification would not be enough, meat slaughtering and
processor plants would need to have a traceability procedure in place to verify the
claimed credence attributes.
For hypothesis 4); contracting is used for quantity and quality control, and management
of supply chain by retailers or packers. It might specify the production methods, and the
type of inputs used. Benefits to producers include financial stability and lower risk. The
downside of contracting include less flexibility over production, less price exploration
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