Future of Indiana Future of Indiana Animal AgricultureAnimal Agriculture

Farm Policy Study GroupFarm Policy Study Group

December 7, 2010

AgendaAgendaggIntroduction Introduction –– Nicole OlynkNicole Olynk

Trends in Livestock Production Trends in Livestock Production –– Chris HurtChris Hurt

Environmental Pressures Environmental Pressures –– Tamilee NennichTamilee Nennich

Social PressuresSocial Pressures Nicole OlynkNicole OlynkSocial Pressures Social Pressures –– Nicole OlynkNicole Olynk

A Producer Perspective A Producer Perspective –– Dave HardinDave Hardin

Introduction/Setting the StageIntroduction/Setting the StageIntroduction/Setting the StageIntroduction/Setting the Stage

Animal agriculture has experienced aAnimal agriculture has experienced aAnimal agriculture has experienced a Animal agriculture has experienced a number of recent challenges number of recent challenges

Feed costsFeed costs Feed costsFeed costs Volatility in marketsVolatility in markets

Environmental pressuresEnvironmental pressures Environmental pressuresEnvironmental pressures Social PressuresSocial Pressures

Animal WelfareAnimal WelfareAnimal WelfareAnimal WelfareRegulatory changes versus market changesRegulatory changes versus market changes

33

GoalsGoalsGoalsGoals

Updates on trendsUpdates on trendsUpdates on trendsUpdates on trendsImplications for livestock going forwardImplications for livestock going forward

What areas do we need to be aware of What areas do we need to be aware of moving forward?moving forward?

Discussion!!! Discussion!!!

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Animal Agriculture Looking O d S i l POutward: Social Pressures

Nicole Nicole Olynk Olynk Dept. ofDept. of Agricultural EconomicsAgricultural EconomicsDept. of Dept. of Agricultural EconomicsAgricultural Economics

Purdue UniversityPurdue UniversityPhoto Source: Indiana Pork, http://www.indianapork.com/

Before we get startedBefore we get startedBefore we get started …Before we get started …

Nicole Olynk; nolynk@purdue eduNicole Olynk; nolynk@purdue eduNicole Olynk; nolynk@purdue.eduNicole Olynk; nolynk@purdue.edu

Cli kCli kClickersClickers Instant responseInstant response AnonymousAnonymous

How long did you travel to get How long did you travel to get here today?here today?

20% 20% 20%20%20%20% 20% 20%20%20%

11 Less than 1 hourLess than 1 hour1.1. Less than 1 hourLess than 1 hour2.2. 1 1 –– 2 hours2 hours33 22 3 h3 h3.3. 2 2 –– 3 hours3 hours4.4. 3 3 –– 4 hours4 hours5.5. Greater than 4 hoursGreater than 4 hours

771 2 3 4 5

Neighbor Relations and Social PressuresNeighbor Relations and Social PressuresNeighbor Relations and Social PressuresNeighbor Relations and Social Pressures

Farms are under Farms are under increased pressureincreased pressure Environmental concernsEnvironmental concerns

Health concernsHealth concerns Health concernsHealth concerns Animal welfareAnimal welfare Socially acceptable Socially acceptable

titipracticespractices Neighbor concernsNeighbor concerns Volatile input prices (i.e. Volatile input prices (i.e.

fuel and fertilizer)fuel and fertilizer) Volatile output pricesVolatile output prices

Source: alsart.org/images/pics/Farm%20near%20City.jpg

MotivationMotivationMotivationMotivation

Production agriculture is facing increasedProduction agriculture is facing increasedProduction agriculture is facing increased Production agriculture is facing increased pressure to adopt significant changes to pressure to adopt significant changes to production processesproduction processes Pressure for changes relating to the “production Pressure for changes relating to the “production

process” rather than the “output characteristics of the process” rather than the “output characteristics of the product”product”productproduct

This isThis is notnot unique to agricultureunique to agricultureThis is This is notnot unique to agricultureunique to agricultureThis is This is notnot unique to foodunique to foodThis is This is notnot unique to livestockunique to livestock

MotivationMotivationMotivationMotivation

Need better understanding ofNeed better understanding of consumerconsumerNeed better understanding of Need better understanding of consumerconsumerperceptions, beliefs, and behaviors perceptions, beliefs, and behaviors Is there a perceived quality difference in the product?Is there a perceived quality difference in the product? Do consumers have a positive willingness to pay for Do consumers have a positive willingness to pay for

processes?processes?

Perception is RealityPerception is Reality

MotivationMotivationMotivationMotivation

Assessment of currentAssessment of current producerproducer sentiment issentiment isAssessment of current Assessment of current producerproducer sentiment is sentiment is needed to: needed to: Assess ability and willingness to respond to changes in Assess ability and willingness to respond to changes in

consumer perceptions and demandconsumer perceptions and demand Examine economic impacts from potential adjustmentsExamine economic impacts from potential adjustments

Motivation

P d R litProducer Reality

Consumer Reality

Summary of Survey QuestionsSummary of Survey QuestionsSummary of Survey QuestionsSummary of Survey QuestionsSurvey respondents were:

71% femaleAvg Age of 53 years0 35

0.4

When was their last farm visit?61%

Avg. Age of 53 yearsAvg. household:

2 d l0 2

0.25

0.3

0.35

Res

pond

ents

2 adults0.5 children0 05

0.1

0.15

0.2

Prop

ortio

n of

R

0

0.05P

Never visited 10 + Years Ago 6-10 Years Ago 1-5 Years Ago Within the lastyear

Have you seen a label like this?Have you seen a label like this?Have you seen a label like this?Have you seen a label like this?

50%50%

11 YesYes1.1. YesYes2.2. NoNo

1414

 Yes

 No

Have you seen a label like this?Have you seen a label like this?Have you seen a label like this?Have you seen a label like this?

50%50%

11 YesYes1.1. YesYes2.2. NoNo

1515

 Yes

 No

Have you seen a label like this?Have you seen a label like this?Have you seen a label like this?Have you seen a label like this?

50%50%

11 YesYes1.1. YesYes2.2. NoNo

1616

 Yes

 No

What are we really talking about?What are we really talking about?What are we really talking about?What are we really talking about?

Food safety?Food safety?Food safety?Food safety?Animal welfare?Animal welfare?

Wh t i i l lf ?Wh t i i l lf ? What is animal welfare?What is animal welfare?HandlingHandlingHousingHousingHousingHousingConsumer perception of animal wellConsumer perception of animal well--beingbeing

1717

Consumers are concerned with Consumers are concerned with the wellthe well--being of animals?being of animals?

25% 25%25%25%25% 25%25%25%

1.1. Strongly AgreeStrongly Agree1.1. Strongly AgreeStrongly Agree2.2. AgreeAgree33 DisagreeDisagree3.3. DisagreeDisagree4.4. Strongly DisagreeStrongly Disagree

Agree Agree

Disag

ree

sagre

e

1818

 Stron

gly A  A

 Dis

 Stron

gly Di

sa

Farm animals should be treated in a way that Farm animals should be treated in a way that t th f i i it th f i i iprevents them from experiencing pain.prevents them from experiencing pain.

25% 25%25%25%25% 25%25%25%

1.1. Strongly AgreeStrongly Agree1.1. Strongly AgreeStrongly Agree2.2. AgreeAgree33 DisagreeDisagree3.3. DisagreeDisagree4.4. Strongly DisagreeStrongly Disagree

Agree Agree

Disag

ree

sagre

e

1919

 Stron

gly A  A

 Dis

 Stron

gly Di

sa

Farm animals should be able to Farm animals should be able to lay down, lay down, stand up, and fully extending his or herstand up, and fully extending his or herstand up, and fully extending his or her stand up, and fully extending his or her

limbs and turn around freely for the majority limbs and turn around freely for the majority of any given dayof any given dayof any given day.of any given day.

50%50% 50%50%

1.1. Agree/YesAgree/Yesgg2.2. Disagree/NoDisagree/No

2020

 Agre

e/Ye

s

 Disa

gree/

No

California Proposition 2California Proposition 2California Proposition 2California Proposition 2

SECTION 2. PURPOSEThe purpose of this Act is to prohibit the cruel confinement of farm animals in a manner that does not allow them to turn around freely, lie down, stand up, and fully extend their limbs.

SECTION 3. FARMANIMALCRUELTY PROVISIONSChapter 13 8 (commencing with Section 25990) is added to Division 20 of theChapter 13.8 (commencing with Section 25990) is added to Division 20 of the Health and Safety Code, to read:

CHAPTER 13.8: FARMANIMALCRUELTY25990. PROHIBITIONS.- In addition to other applicable provisions of law, a person shall not tether or confine any covered animal, on a farm, for all or the majority of any day, in a manner that prevents such animal from:(a) Lying down, standing up, and fully extending his or her limbs; and

2121

(a) Lying down, standing up, and fully extending his or her limbs; and(b) Turning around freely.

Regulation versus MarketplaceRegulation versus MarketplaceRegulation versus MarketplaceRegulation versus Marketplace

Motivations changes when we move into aMotivations changes when we move into aMotivations changes when we move into a Motivations changes when we move into a legal arenalegal arena

There is a distinct difference between There is a distinct difference between d th ti blid th ti bliconsumers and the voting publicconsumers and the voting public

2222

Research is ongoing at PurdueResearch is ongoing at Purdue

Collaborative efforts between Ag Econ andCollaborative efforts between Ag Econ andCollaborative efforts between Ag Econ and Collaborative efforts between Ag Econ and Animal ScienceAnimal Science

Determine profitability of providing welfareDetermine profitability of providing welfare Determine profitability of providing welfare Determine profitability of providing welfare attributesattributes

Assess market forces versus legislativeAssess market forces versus legislative Assess market forces versus legislative Assess market forces versus legislative changes in animal welfare arena changes in animal welfare arena

Unique approach: If we can understand theUnique approach: If we can understand the Unique approach: If we can understand the Unique approach: If we can understand the demands of the consumer, we as producers demands of the consumer, we as producers can adapt to provide those attributes which can adapt to provide those attributes which can be provided profitablycan be provided profitably

2323

Nicole J. Olynk

A i t t P fAssistant Professor

Dept. of Agricultural EconomicsEconomics

nolynk@purdue.edu