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The Benefits of Retail Trace Back Programs

The Benefits of Retail Trace Back Programs

Look for added incentives funneling back through the supply chain

Grain farmers may think they don't need to be concerned about retailer protocols or trace-back programs. Generally speaking they can sell the grain - and forget about it.

If that's your approach you may be missing the boat, says David Hughes, emeritus professor of food marketing at Imperial College in Great Britain.

Look for added incentives funneling back through the supply chain

"In the past five years we have seen more grain assurance programs that trace back to the farm," he says. "When something like that is announced, there's a roar of rage back to the farm community - it will add cost, who will pay for it? My experience is, at the farmer level, we found there were benefits of being associated with these programs, but the benefits are hard to quantify compared to the costs.

"Good farmers embrace crop traceability type programs because it improves their yields and management, and reduces their costs in terms of inputs. So my advice is to be open-minded about it."

This may not be hitting U.S. farmers yet, but it could someday. The positive side of any trace-back program is that it makes the supply chain more robust, adds Hughes. That means your product - whether it's a steer, bushel of grain, whatever - should be in higher demand.

"That supply chain has higher integrity than other supply chains," he adds. "If you are a commodity wheat producer and you are good, there will be a sub group of producers who are willing to look at special varieties, traits, values, that require more management, and that is a group you want to be in. You want something more difficult to grow, and that gives a higher value."

David Hughes

Retailers are looking to give their products more attributes than just price. So, it's not only about price for shoppers. It's about values and that includes ethics, sustainability, heritage or performance. The grower of the grain that goes into those products may have a leg up if they follow certain protocols that offer these attributes to consumers.

Despite the global financial crisis, values remain a strong factor in food buying. Brands like Wal-Mart now put together value platforms that will, in effect, look at everything that goes into food, from animal welfare to sustainability and water use. "By the time that product has the Wal-Mart name on its label, the consumer can trust that their values and concerns have been vetted," says Hughes. "That is their way of building brand trust."

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