Tuesday, November 4, 2014

Capitalism Works: Producers, Retailers Increase Supply Of Antibiotic-Free Poultry And Meats To Meet Market Demand: No Government Regulation Needed

From The Wall Street Journal, "Meat Companies Go Antibiotics-Free as More Consumers Demand It: Food Producers Increasingly Offer Chicken, Beef and Pork Raised Without Antibiotics, Responding to Consumer Concerns About Resistant Bacteria" by David Kesmodel, Jacob Bunge and Betsy McKay:
"I was pretty apprehensive," the Kentucky farmer [Brandon Glenn] says of instructions three years ago from Perdue Farms Inc. to halt almost all antibiotic use. "How are we going to keep these chickens alive without giving them their medication? But Perdue said: ‘This is what the market is going to.’ "

Perdue is among a growing array of food producers moving to limit the routine use of antibiotics in livestock production—less in response to regulatory action than to consumer pressure.

Competitor Tyson Foods Inc. launched a brand of chicken without antibiotics last year and also markets antibiotic-free beef. Retailers where people now can buy meat raised without antibiotics include Wal-Mart Stores Inc. and BJ’s Wholesale Club Inc. Fast-food chain Chick-fil-A Inc. says it is phasing out all chicken raised with antibiotics over five years.

Sales Of Chicken Without Antibiotics: 2009-2014
Source: The Wall Street Journal

As US per capita GDP increased over the years and as US poverty declined as government programs, such as SNAP (Food Stamps), supplemented the income of the poor, there is a consistent tendency of better-off consumers to change their consumption preferences to items that they perceive as higher quality. In this case, consumers are switching their consumption to a perceived higher quality meat and poultry that are antibiotic free.

At first consumers wanted low cost, readily available meats and poultry and the producers responded by increasing the supply and lowering the cost by increasing productivity at the farm level. Now that consumer product preferences and views about antibiotics are changing, the suppliers are responding to the new consumer wants for a product without antibiotics.

No comments:

Post a Comment