Blockchain‐based traceability and demand for U.S. beef in China

Abstract

Amid stringent traceability requirements and a nearly 14‐year ban, the U.S. beef industry is rebuilding its market presence in China. Blockchain technology offers a responsive means of meeting Chinese import traceability requirements while also addressing consumers' food safety concerns. We evaluate Chinese demand for U.S. beef and blockchain‐based traceability and find that a sizeable segment of the market (37%) is willing to pay a premium for U.S. beef that is traceable using blockchains. Results indicate that investments in traceability systems that utilize blockchain technology may be an effective way for producers to capture a significant market share in China.

Consumer valuation of blockchain traceability for beef in the United States

“…Substantial attention in recent literature and in popular media has focused on meat product attributes and traceability (Pendell et al, 2013; Schroeder et al, 2007; Ates & Lusk, 2020; Ortega et al, 2020; H. E. Shear & Pendell, 2020; Lin et al, 2022), specifically beef, which is why beef steak makes an ideal medium to test the effects of BC traceability on consumer preferences, which in this case have implications not just for business implementations of BC technology but also for policies relating to how the technology is managed and governed. To investigate the potential value of BC traceability to consumers and consider governance factors, a discrete CE was designed similar to previously implemented methods (Liu et al, 2019; Fiebig et al, 2010; Balcombe, Fraser, and Falco 2010; Ubilava & Foster, 2009).…”

“…Moreover, traceability in beef supply chains is expensive for producers (H. Shear et al, 2019; H. E. Shear & Pendell, 2020), which is partially the reason for the United States lagging behind other countries in developing more robust traceability systems. However, it could provide a means to add value based on product information and label validation (Lin et al, 2022; Schroeder & Tonsor, 2012).…”

“…BCs may provide internal, business‐to‐business (B2B), and business‐to‐consumer (B2C) efficiencies that save both time and money. BC could benefit a number of agricultural and food applications, including farm data tracking and digital agriculture (Griffin et al, 2021), international trade and policy (Guerra & Boys, 2022; Lakkakula et al, 2021), fresh produce supply chains (Collart & Canales, 2021), and demand for international traceability with country‐of‐origin information (Lin et al, 2022). Additionally, companies may extract price premiums in cases where consumers value product information and certification.…”

How might broad adoption of blockchain‐based traceability impact the U.S. fresh produce supply chain?

“…Given the technology's initial investment and maintenance cost, companies will need to perceive sizeable benefits (e.g., protection from liability and product recalls, consumer premiums) to be willing to adopt and pay for it. Some studies suggest that consumers may be willing to pay premiums for the implementation of smart contracts in the insurance sector (Nam, 2018), blockchain-based QR tags on extra virgin oil labels (Violino et al, 2019), blockchain verified lamb (Williamson, 2019), and blockchain traceable beef (see Lin et al 2022 in this issue). However, whether consumers are willing to pay premiums for access to blockchain-based information in products like fresh produce remains an open question.…”

Three Digital Agriculture Problems in Cotton Solved by Distributed Ledger Technology

“…The cotton industry as a case study contrasts food products with respect to opportunities for DLT because it is a relatively lower value‐added product (see Collart and Canales, 2020 and Lin et al, 2022 in this issue for discussions of DLT opportunities in the specialty crop and beef industries, respectively). However, this does not disqualify it from being an industry where DLT has valuable applications.…”