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Food Safety Regulation, Product Pricing, And Profitability: The Case Of Haccp

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Listed:
  • Nganje, William E.
  • Mazzocco, Michael A.
  • McKeith, Floyd K.

Abstract

This paper assesses the impact of mandatory Hazard Analysis of Critical Control Points (HACCP) regulation on output price for small meat processors and packers and evaluates implications for firm-level profitability. The importance of HACCP regulation and pricing is an issue that deserves in-depth analysis because of its implications for the survival of small firms in the meat industry. To investigate this issue a survey was sent to meat processors and packers in the United States to collect data on HACCP expenses, output price before and after HACCP implementation, and inputs prices and quantities. Although output price did not increase significantly to compensate for HACCP expenses, analysis of the translog profit function revealed that small firms were more profitable after HACCP implementation. Other than price increase, these results suggest that HACCP provide incentives like reduced product rework to small firms.

Suggested Citation

  • Nganje, William E. & Mazzocco, Michael A. & McKeith, Floyd K., 1999. "Food Safety Regulation, Product Pricing, And Profitability: The Case Of Haccp," AE Series 23077, North Dakota State University, Department of Agribusiness and Applied Economics.
    • Handle: RePEc:ags:nddaes:23077
    DOI: 10.22004/ag.econ.23077
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    References listed on IDEAS

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    1. Julie A. Caswell & Eliza M. Mojduszka, 1996. "Using Informational Labeling to Influence the Market for Quality in Food Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(5), pages 1248-1253.
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    3. John M. Antle, 1996. "Efficient Food Safety Regulation in the Food Manufacturing Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(5), pages 1242-1247.
    4. Michael A. Mazzocco, 1996. "HACCP as a Business Management Tool," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 770-774.
    5. Marvin L. Hayenga, 1998. "Cost Structures of Pork Slaughter and Processing Firms: Behavioral and Performance Implications," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 20(2), pages 574-583.
    6. Hayenga, Marvin L., 1998. "Cost Structures of Pork Slaughter and Processing Firms: Behavioral and Performance Implications," Staff General Research Papers Archive 1254, Iowa State University, Department of Economics.
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    Cited by:

    1. Ragona, Maddalena & Mazzocchi, Mario, 2008. "Measuring the Impacts of Food Safety Regulations: A Methodological Review," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43864, European Association of Agricultural Economists.
    2. Liu, Feng & Rhim, Hosun & Park, Kwangtae & Xu, Jian & Lo, Chris K.Y., 2021. "HACCP certification in food industry: Trade-offs in product safety and firm performance," International Journal of Production Economics, Elsevier, vol. 231(C).
    3. William E. Nganje & Mounir Siaplay & Simeon Kaitibie & Emmanuel T. Acquah, 2006. "Predicting food safety losses in turkey processing and the economic incentives of hazard analysis and critical control point (HACCP) intervention," Agribusiness, John Wiley & Sons, Ltd., vol. 22(4), pages 475-489.
    4. Ragona, Maddalena & Mazzocchi, Mario, 2008. "Impact Evaluation of Food Safety Regulations: A Review of Quantitative Methods," 110th Seminar, February 18-22, 2008, Innsbruck-Igls, Austria 49887, European Association of Agricultural Economists.
    5. William E. Nganje & Linda D. Burbidge & Elisha K. Denkyirah & Elvis M. Ndembe, 2021. "Predicting Food-Safety Risk and Determining Cost-Effective Risk-Reduction Strategies," JRFM, MDPI, vol. 14(9), pages 1-18, September.
    6. Hobbs, Jill E. & Gervais, Jean-Philippe & Gray, Richard S. & Kerr, William A. & Larue, Bruno, 2005. "On-Farm Food Safety and Environmental Farm Plans: A Conceptual Framework for Identifying and Classifying Benefits and Costs," Economic and Market Information 55297, Agriculture and Agri-Food Canada.

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