Survey shows willingness to pay varies by certification scheme.

Consumers say they will pay more for pork products meeting environmental and antibiotic-use requirements, but not for animal welfare, says a Purdue University survey.

Purdue's Agricultural Innovation and Commercialization Center used U.S. Department of Agriculture funds to poll consumers on whether they would pay more for a certified pork chop in the retail counter, says Ken Foster, Purdue agricultural economist.

The responses represented a broad cross-section of U.S. residents. The survey targeted the primary household shopper; 61% of the respondents were women. The average age, household income and household size in the sample was 53 years, $55,000 and 2.52 members, respectively.

The survey identified three groups of pork consumers (Table 1). The first group, representing 16% of respondents, showed the highest overall willingness to pay more for pork products certified as environmentally friendly and antibiotic-free, but less so for certification of animal well-being, says Foster.

However, this first group, “while having a huge willingness to pay more for certified pork, doesn't eat much pork to start with,” Foster explains.

Interestingly, this small group of consumers indicated they would pay even more if the product was certified for multiple attributes.

The second group of respondents, representing 41% of shoppers, is referred to as the price-conscious group, says Foster. They had the lowest willingness to pay for certification.

The third group, referred to as concerned shoppers, represented 43% of respondents. This group indicated a willingness to pay more for certified pork chops. But they wouldn't pay as much of a premium as the first group, and would opt for the conventional product if the pork price was too high.

Overall, the positive message from the survey results was that more than half of the respondents indicated some willingness to pay more to purchase certified pork products, says Foster.

“The other thing we found interesting was how these people viewed the attributes of these pork products. It was pretty clear that they view the environment and the antibiotics issue as personal risks, whereas, animal welfare doesn't really have the same personal impact,” he notes.

One problem with animal welfare issues, such as sow stalls, is that many consumers may not have a clear understanding of what a sow stall is, so the concern really doesn't register with them, says Foster.

Certification programs carry costs for farmers, packers and retailers, including program fees, increased production costs and shelf space. Producers and packers must segregate batches if there are both conventional and certified live animals in the facility. Farm costs rise due to stricter rules on housing and manure disposal, he says.

Moreover, not all cuts can be certified because many pork products contained mixed ingredients and cannot be kept separate from conventional products during processing.

Foster estimates that if just fresh pork primal cuts were sold at retail, the marginal production costs increase by 80¢/lb. for the environment, $1.60/lb. for animal welfare, 56 to 96 cents/lb. for antibiotics, and from $2.12 to $2.32/lb. for the triple combination.

Pork producers who want to pursue this form of niche marketing must develop a set of protocols that are proprietary in order to maintain identity.

That task has become more challenging as a growing number of large production integrators, such as Cargill and Premium Standard Farms, have entered the marketplace selling specialty pork products under USDA's Process Verified Program, Foster explains.

Table 1. Willingness to Pay More for Certified Pork in U.S. Dollars/lb.
Class/Program Class 1: Attribute conscious Class 2: Price conscious Class 3: Concerned shoppers
ENV $2.582 $0.240 $1.447
WEL 0.242* 0.259 1.814
ANT 2.660 0.194 2.496
E&W 5.705 0.532 3.187
E&A 5.601 0.406 3.592
W&A 4.641 0.427 4.121
EWA 10.464 0.671 5.143
Notes: a * indicates that the value is not statistically different from 0 at the 5% level. ENV, WEL and ANT are the certification schemes for the environment, animal welfare and antibiotics schemes, respectively. E&W, E&A and W&A are the certification schemes for the combinations environment & welfare, environment & antibiotics and welfare & antibiotics, respectively. EWA is the certification scheme for all three programs.