The benefits to the Australian Pig meat industry from an increase in demand for a hypothetical low cholesterol pork product

This is the third of a series of papers examining the potential economic effects from the introduction of a hypothetical low cholesterol pork product into the Australian market. Here, a newly updated pig meat model reported by Griffith et al. (2010) is used to model the industry wide impacts of the Bellhouse et al. (2010) survey results on consumer willingness to pay for this new pork product. Six different scenarios are examined that are combinations of a 10, 20 or 30 per cent increase in consumer demand, with and without a 10 per cent increase in the costs of producing the more valuable pork. The simulation results for the various scenarios indicate total annual industry benefits of some $450m for an increase in aggregate willingness to pay of 30 per cent and no cost increase, down to $88m for an increase in aggregate willingness to pay of 10 per cent and a 10 per cent cost increase. Australian consumers receive about 80 per cent of total benefits, pork producers receive about 7-8 per cent and all other market participants together receive about 12-13 per cent. These values provide a guide to the size of the annual investment that could be justified by pork producers to produce a pig that is low in cholesterol.


Issue Date:
2010
Publication Type:
Journal Article
DOI and Other Identifiers:
1442-6951 (Other)
PURL Identifier:
http://purl.umn.edu/114415
Published in:
Australasian Agribusiness Review, Volume 18
Page range:
152-160
Total Pages:
9
Series Statement:
Volume 18
Paper 9




 Record created 2017-04-01, last modified 2017-08-26

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