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Supply Chain Competency: Recipe For Cereal And Livestock Marketing In Alberta?

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  • Lee, Michelle
  • Unterschultz, James R.
  • Lerohl, Mel L.

Abstract

This study examines the nature of Supply Chain Management (SCM) in the Canadian barley industry, economic theories related to SCM, identifies SCM drivers and reviews the Canadian barley marketing system. Two surveys were conducted; one on the feed barley segment of the market; another on the malt barley segment of the market. These surveys provide an outline of the attributes sought by buyers of feed barley in Alberta and by buyers of malt barley in Canada and the United States. A further goal of these surveys was to assess the extent of motivations for SCM in the barley supply chain. Study methods include scaling, factor analysis and stated preference techniques to analyze purchasers' preferences for specific product attributes, business relationships and product source. The major attributes of feed barley sought by Alberta feed manufacturers appear to be physical characteristics such as moisture level, absence of foreign material, high bushel weight and uniform appearance of kernels. Features identified as of moderate importance included levels of certain key amino acids, starch level in the barley sample, as well as such seller characteristics as whether the seller was personally known to the buyer, and willingness of the seller to enter into a long-term supply contract. At the level of the Alberta feed mill industry, results therefore indicate that physical, readily identifiable attributes dominate in the selection of feed barley. As a result, the study identified that SCM is not yet a part of the awareness of barley buyers at feed mills. Among buyers of malt barley, physical or easily assessed attributes such as size of kernel, germination percentage, variety and location where produced ranked highly in a factor analysis as important to malt barley buyers. While results from the sample of Canadian and US buyers did not indicate strong potential for SCM in the malt barley sector, the study found there to be differences in attributes desired by US versus Canadian malt purchasers. Main differences were the concern of US buyers with the region where the barley was grown, and the apparently much higher willingness of US buyers to obtain their malt barley from more than one source. These differences may suggest a potential for SCM in malt barley focused on procuring supplies from regions identified as preferred locations for barley used in malt production.

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Bibliographic Info

Paper provided by University of Alberta, Department of Resource Economics and Environmental Sociology in its series Project Report Series with number 24050.

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Date of creation: 2001
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Handle: RePEc:ags:ualbpr:24050

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Postal: 515 General Services Building, University of Alberta, Edmonton, AlbertaT6G 2H1
Phone: (780) 492-4225
Fax: (780) 492-0268
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Web page: http://www.rees.ualberta.ca/
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Keywords: Industrial Organization;

References

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  11. Abraham Hollander, 1990. "Quota Leasing as a Competitive Strategy: A Story of Chicken Feed, Laying Hens, and Eggs," Canadian Journal of Economics, Canadian Economics Association, vol. 23(3), pages 617-29, August.
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  13. Unterschultz, James R. & Quagrainie, Kwamena K. & Veeman, Michele M., 1996. "Consumer Preferences for Biopreservatives in Beef and Pork Packaging and Testing the Importance of Product Origin," Project Report Series 24043, University of Alberta, Department of Resource Economics and Environmental Sociology.
  14. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-61, October.
  15. Martinez, Stephen W., 1999. "Vertical Coordination in the Pork and Broiler Industries: Implications for Pork and Chicken Products," Agricultural Economics Reports 34031, United States Department of Agriculture, Economic Research Service.
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