Dermot Hayes is a native of Ireland. He joined the Economics Department at Iowa State University in March 1986. Research interests include food safety, livestock modeling, demand analysis, commodity markets and trade policy.

Q What role does food safety play in international competitiveness?

A Most countries impose stringent standards on food imports, so food safety is necessary for market access. Perceptions about food safety are very important. For example, pork products from the United States are popular in Mexico because Mexican consumers believe that U.S. food is safer than the Mexican alternative.

On the other hand, Asian consumers believe imported products are less likely to be safe, which can cause shifts away from imported products. For example, when Japan has outbreaks of food poisoning, U.S. exports suffer even though the outbreaks so far have come from Japanese sources.

Q How will food safety issues affect U.S. pork producers' opportunities in international markets?

A To date, the United States has had two enormous advantages in supplying pork. First, our large-scale plants were able to process pork at a much lower cost than our competitors. Second, the high food-safety standards that our domestic market imposed has translated into a selling advantage in international markets.

However we do not have trace-back abilities. Producers know that once the meat enters the plant the source becomes anonymous.
If the Europeans capitalize on their new trace-back systems and begin offering food-safety guarantees that we cannot, then they may capture the more lucrative markets. Here, the large-scale packing plants may work against us.

Q What food safety issues do U.S. pork producers need to address to remain competitive internationally?

A The commingling of hogs that occurs in our packing plants means that we cannot offer incentives to producers who work to provide a safer product. Europe now guarantees a trichinae-free pork product; soon it should be able to offer branded products guaranteed to be free of pathogens and needles. They also will be able to provide details of the medical program for each animal, and if necessary, be able to show that certain animal welfare practices were followed. They may begin to denigrate the U.S. commodity product, and Asian consumers may begin to listen.

Q How have other countries solved some of their food safety issues?

A A visit to a wet market in Asia can be a stomach churning experience. Middle-class consumers in many developing countries are starting to turn away from these traditional meat sources and this may offer an enormous opportunity to countries that can provide chilled, hygienic products.

The European response to "mad cow disease" was to impose a process on the meat system that allowed retail consumers to trace the animal back to the producer. These systems are now being implemented, and once they are reliable, the Europeans could have an enormous marketing advantage.

Q What's the payoff for producing safe pork?

A In a commodity system there can be no individual payoff but the entire sector can benefit. Producers get paid based on the average (or minimum) level of food safety and some bad apples can ruin it for everyone else. If we can solve the traceability problem then the market will put incentives in place and payoffs will exist.

Q Are consumers willing to pay more for food safety attributes, such as irradiation?

A We sold irradiated chicken breast in Kansas and Iowa and it sold well. The key seems to be to avoid the scare tactics used by some of the opponents.
The ground-beef industry needs irradiation because it cannot test for E-coli without destroying the meat. Now that a large-scale source of irradiated beef is available fast-food outlets will start using it to avoid lawsuits. When consumers get used to irradiated ground beef then pork will be next.

The Europeans had some problems with antibiotic resistance to a drug that had been used in animal feed (a drug not approved here). They believe that it establishes a link between feed-grade antibiotics and resistance issues. European consumers are willing to pay premiums. I don't think the U.S. consumer is currently willing to pay premiums associated with antibiotic-free pork. However, all it would take is a few headlines and everything could change.

In a recent survey of individuals in the meat chain we discovered that the market may be willing to pay as much as 30 cents per pound for a branded, customized, guaranteed and marketed pork product.