IDEAS home Printed from https://ideas.repec.org/p/ags/uersrr/212888.html
   My bibliography  Save this paper

Economic Incentives to Supply Safe Chicken to the National School Lunch Program

Author

Listed:
  • Ollinger, Michael
  • Bovay, John
  • Guthrie, Joanne
  • Benicio, Casiano

Abstract

This report examines the food safety performance of establishments supplying raw chicken to the National School Lunch Program (NSLP) through the U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service’s (AMS) Poultry Products Purchase Program over 2006–12. This report focuses on the effectiveness of reputation as an incentive for producers to control Salmonella. To sell chicken through the Poultry Products Purchase Program, establishments must be registered with AMS and be in compliance with the standards imposed on all slaughter establishments by the USDA, Food Safety and Inspection Service (FSIS). Suppliers may exceed the FSIS standard, depending on their incentives. Raw chicken suppliers to AMS for the NSLP have an incentive to attain strong performance on Salmonella tests in order to ensure that they do not suffer product recalls, which, being associated with a highly visible customer, could harm their reputations for food safety and adversely affect profitability. However, suppliers also have an incentive to reduce costs, including those associated with food safety practices, to improve their profit margins. Findings indicate that AMS supplier concerns about increased scrutiny and the associated reputation effects when supplying the NSLP offset any incentive to underinvest in food safety to lower the costs of production.

Suggested Citation

  • Ollinger, Michael & Bovay, John & Guthrie, Joanne & Benicio, Casiano, 2015. "Economic Incentives to Supply Safe Chicken to the National School Lunch Program," Economic Research Report 212888, United States Department of Agriculture, Economic Research Service.
  • Handle: RePEc:ags:uersrr:212888
    DOI: 10.22004/ag.econ.212888
    as

    Download full text from publisher

    File URL: http://ageconsearch.umn.edu/record/212888/files/ERR202.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Nicholas E. Piggott & Thomas L. Marsh, 2004. "Does Food Safety Information Impact U.S. Meat Demand?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 154-174.
    2. Michael R. Thomsen & Rimma Shiptsova & Sandra J. Hamm, 2006. "Sales Responses to Recalls for Listeria monocytogenes: Evidence from Branded Ready-to-Eat Meats," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(4), pages 482-493.
    3. Michael Ollinger & Danna L. Moore, 2008. "The Economic Forces Driving Food Safety Quality in Meat and Poultry," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(2), pages 289-310.
    4. John M. Antle, 2000. "No Such Thing as a Free Safe Lunch: The Cost of Food Safety Regulation in the Meat Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 310-322.
    5. Golan, Elise H. & Roberts, Tanya & Salay, Elisabete & Caswell, Julie A. & Ollinger, Michael & Moore, Danna L., 2004. "Food Safety Innovation In The United States: Evidence From The Meat Industry," Agricultural Economics Reports 34083, United States Department of Agriculture, Economic Research Service.
    6. Michael Ollinger & Danna Moore, 2009. "The Direct and Indirect Costs of Food-Safety Regulation," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(2), pages 247-265.
    7. A. Colin Cameron & Douglas L. Miller, 2015. "A Practitioner’s Guide to Cluster-Robust Inference," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 317-372.
    8. Ollinger, Michael & Guthrie, Joanne & Bovay, John, 2014. "The Food Safety Performance of Ground Beef Suppliers to the National School Lunch Program," Economic Research Report 262211, United States Department of Agriculture, Economic Research Service.
    9. Michael Rothschild & Joseph Stiglitz, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, Oxford University Press, vol. 90(4), pages 629-649.
    10. Ollinger, Michael & Mueller, Valerie, 2003. "Managing For Safer Food: The Economics Of Sanitation And Process Controls In Meat And Poultry Plants," Agricultural Economics Reports 33975, United States Department of Agriculture, Economic Research Service.
    11. Michael R. Thomsen & Andrew M. McKenzie, 2001. "Market Incentives for Safe Foods: An Examination of Shareholder Losses from Meat and Poultry Recalls," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 526-538.
    12. Starbird, S. Andrew & Amanor-Boadu, Vincent, 2006. "Do Inspection and Traceability Provide Incentives for Food Safety?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 31(1), pages 1-13, April.
    13. Victoria Salin & Neal H. Hooker, 2001. "Stock Market Reaction to Food Recalls," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 23(1), pages 33-46.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Agribusiness; Agricultural and Food Policy; Food Consumption/Nutrition/Food Safety; Health Economics and Policy; Industrial Organization; Marketing;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:uersrr:212888. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: http://edirc.repec.org/data/ersgvus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.