Looking beyond value‐based pricing of beef in North America

Abstract

Purpose

Quality traits desired by consumers may not be adequately captured by beef industry standards associated with grid or value‐based pricing alone. Aims to demonstrate this shortcoming by examining strategies of selected companies in North America at the four supply chain levels of cow‐calf genetics, feedlot feeding, processing, and retailing that have been proactive in producing desirable beef attributes efficiently to better meet consumer beef demand.

Design/methodology/approach

The vertical alliance between Ralphs retailing, Sunland Beef processing, and a handful of feedlots using narrowly defined beef genetics are examined to illustrate how consumer market research and coordination throughout the supply chain may address many shortcomings associated with current value‐based pricing of beef criteria.

Findings

Better information sharing and coordination between seedstock and retail industries could help assure that consumer preferences of beef palatability and consistency are met while meeting high production efficiency standards.

Practical implications

Cow‐calf, feedlot, and packing industries need to better track and manage information flows of genetic‐management paths from consumer to seedstock producer in order for the beef industry to be more competitive.

Originality/value

Experiences of our case companies suggest that the beef industry will need to look beyond the North American grid or value‐based pricing of beef in order to maintain or improve market share with competing pork and poultry sectors.

Citation

Tronstad, R. and Unterschultz, J. (2005), "Looking beyond value‐based pricing of beef in North America", Supply Chain Management, Vol. 10 No. 3, pp. 214-222. https://doi.org/10.1108/13598540510606278