A publication of AAEA

A publication of AAEA
Pink Slime,Marketing, Uncertainty, and Risk in the 24 Hour News Cycle

Pink Slime,Marketing, Uncertainty, and Risk in the 24 Hour News Cycle

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Editors’ note

This Choices issue contains a theme set of three articles examining the impacts of the “pink slime” incident on the food and agricultural sectors. There are also three submitted articles—including one policy issue article on implementing dietary goals and guidelines by Palma and Knutson; one on trade distorting impacts of the U.S. Renewable Fuel Standards, by Yano, Blandford and Surry; and one on the shifting to developing countries of productivity growth in global agriculture, by Fuglie and Wang.

In addition to these peer-reviewed articles, Ahearn and Shoemaker provide an article based on an interview with Dr. Sonny Ramaswamy, Director of USDA’s National Institute of Food and Agriculture. The subject is the critical issue of adequately funding the research and education system which has substantially contributed to making the United States the competitive force it has been in supplying food security worldwide in recent decades.

Emerging economies are ramping up funding to increase productivity-enhancing research and education, while the United States has been dismantling its system which has long been the envy of the world. Concerned about this trend, the President’s Council of Advisors on Science and Technology last month issued A Report to the President on Agricultural Preparedness and the Agriculture Research Enterprise. The Report calls for increased public investment in agricultural research to enable creation of an “innovation ecosystem for agriculture” that combines public and private R&D efforts. Dr. Ramaswamy has some important messages for policy makers and all those concerned with maintaining U.S. agriculture’s productivity growth to enable the United States to continue its role as a major contributor to food security as the world’s population expands and demand increases for higher quality diets from developing country consumers with growing incomes.

The article by Fuglie and Wang provides significant supporting information related to Dr. Ramaswamy’s insights. Based on a series of case studies, they find that while crop yield growth rates for some of the major grains started slowing during the 1970s, total factor productivity for the global agricultural sector as a whole does not appear to be slowing. In developed economies, the public investment declines in agricultural R&D have been in part offset by growth in private sector investment to keep productivity growing. But continuing growth in private R&D cannot be relied upon indefinitely, without increased public investment to open up new technological opportunities for commercialization. For developing countries, yield growth continues across a broad range of crop and livestock commodities and the sector total factor productivity is quite robust, although large variations exist across countries and regions. Rising productivity in these countries has been supported by policy and institutional changes, improved infrastructure, and particularly increases in public investment in research and development and the dissemination of new technologies and practices. The declining importance of staple food commodities vs. a broader array of food commodity crops, fruits and vegetables, and livestock products means that productivity must continue to increase across a broad array of commodities to provide future food security needed for societal well being. An important challenge is to raise productivity in low-performing countries and regions, especially sub-Saharan Africa.

We trust that the collection of articles in this Choices issue will add to your understanding of some important challenges facing agriculture and the food sector.


Theme Overview: Pink Slime, Marketing, Uncertainty, and Risk in the 24 Hour News Cycle

J. Ross Pruitt and Joshua D. Detre

Concerns about "pink slime," or lean finely textured beef, illustrate the apparent lack of transparency in the U.S. agricultural supply chain. Higher prices for consumers result from its abandonment. This issue explores the implications to the cattle and agribusiness industries that used LFTB and the legal battle that is beginning.

Assessing the Impact of LFTB in the Beef Cattle Industry

J. Ross Pruitt and David P. Anderson

Media attention on lean finely textured beef has focused additional scrutiny food processing practices. Consumer reluctance to accept this product has implications for the cattle industry and the broader agricultural supply chain for transparency in the future. The adjustment process to the loss of LFTB is ongoing.

Did the "Pink Slime" Controversy Influence Publicly Traded Agribusiness Companies

Joshua D. Detre and Michael A. Gunderson

Of importance to agribusiness companies is the effect negative publicity can have on their financials. We examine how the "pink slime" event has influenced short-term financial performance, and stock value, of publicly traded companies which have been involved in the event.

Pink Slime and the Legal History of Food Disparagement

Erika K. Eckley and Roger A. McEowen

The lawsuit filed by Beef Products, Inc. versus ABC News regarding "pink-slime" is another incident of a news story garnering traction and adversely affecting food producers. Food disparagement lawsuits arising out of these episodes are somewhat novel and encompass first amendment issues as well as the changing nature of agriculture.

Webinar: Cleaning Up the Slime: Science and Substantiation

Date: February 15, 2013
Time: 2:00 ET/1:00 CT/12:00 MT/11:00 PT