Presented at the 2004 American Agricultural Economics Association Annual Meeting: Denver, CO, July 1, 2004. 19 pages.
Copyright © 2004 by James Kliebenstein, Sean Hurley, Ben Larson and Mark Honeyman. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies.
Niche markets of agricultural products are experiencing rapid growth. One such niche market is organic pork. Organic pork production is a relatively new and expanding segment of the pork industry. Similar to some other niche markets, it has also experienced rapid growth (Organic Trade Association).
It is well known that the cost of organic pork production is greater than for traditional pork production due to increased feed costs and decreased swine performance. The industry has dealt with this by paying premiums to induce producers to produce the organic product. However, it is not clear on what level or how the premiums should be paid to producers to provide an incentive to produce and market a steadier flow of product throughout the year. With premium structures currently used for organic pork production there are more hogs being produced using summer farrowing than with winter farrowing. This uneven pig flow causes instability of supply and creates product flow problems throughout the industry. This instability can lead to problems of slaughter capacity scheduling and/or utilization as the industry grows and matures. Also, at certain time periods the demand for fresh organic pork products may not be met. During other times, the availability of fresh organic pork may exceed demand. These issues create problems for a developing industry, which is attempting to establish and maintain a reliable consumer base.
Agribusiness | Agricultural and Resource Economics | Business