Food & Consumer Demand in the 21 st Century Mid-South Agricultural Finance Conference University of Tennessee-Martin Matthew C. Roberts, PhD | www.kernmantlegroup.com 9 August 2017
US Wealth Continues to Rise
US Wealth Continues to Rise: Disposable Income
US Wealth Continues to Rise: Disposable Income
If you had to choose among the following things, which are the two that seem most desirable to you? 1. Maintaining order in the nation. 2. Giving the people more say in important political decisions. 3. Fighting rising prices. 4. Protecting freedom of speech
Maslow’s hierarchy of needs:
This is where Maslow’s hierarchy of needs: food comes in.
I must study politics and war that my sons may have liberty to study mathematics and philosophy. My sons ought to study mathematics, philosophy, […] commerce, and agriculture, in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry, and porcelain. --John Adams
I must study politics and war that my sons may have liberty to study mathematics and philosophy. My sons ought to study mathematics, philosophy, […] commerce, and agriculture, in order to give their children a right to create hashtags such as #Resist and #OccupyWallStreet, spend thousands on tattoos and piercings and organize anti-globalist protests at Starbucks on their MacBooks. --John Adams [paraphrased]
Belongingness and Esteem: • We are more connected than ever. • We are more alone than ever.
How do you explain who you are? Farmer Mom Banker Christian John Deere Owner Volunteer Golfer Hunter Dad Coach
When I was a kid, identities were: • Church • School/town • Work
Where do we find our community? • More Americans bowling than ever. • Fewer members of bowling leagues.
In 2017?
Belongingness and Esteem mean radically different things for food. • Food is our identity, not just sustenance.
But this has happened in many other industries: • Ford’s Model T • Clothing • Shoes • All are attempts to break away from commoditization.
The joys of price discrimination… One price for all Total Revenue = Price x Price Quantity Quantity
The joys of price discrimination… Price Beef Quantity
The joys of price discrimination… Filet Mignon NY Strip T-Bone Freezer Beef & Ground Beef Offals Quantity
What does this mean for you? • Identification through consumption is a luxury good. • There will always be commodity channels: • Differences in wealth dictate that. • We are more alone than ever. • We have substituted `social’ media for social interaction. • We live in a culture searching for comfort, ease & belonging. • And we use $$$ to try to get it.
How should we react as an industry? • Recognize that some fill a personal need through their food choices. • Unequivocally support those who try to meet these needs…we might be them one day. • Continue to support consumer sovereignty while educating on the facts. • Distinguish between ethics, nutrition, and safety.
What does this mean for you? 1. Recognize the value of segmented commodity channels: 1. Young & Beginning Farmers 2. Urban/Suburban Sprawl 3. Keeping ‘alternative ag’ in the fold. 2. Let’s happily give consumers what they want: 1. Organic 2. Non-GMO 3. Free-range 4. Happy Cows 3. While explaining the trade-offs involved…
What does this mean for you? 4. Constantly evaluate opportunities for *your* farm: 1. Do you like people? 2. Do you have more labor than capital? 5. Make the choice which market to serve based on *business* conditions. 1. And encourage others to do the same. 6. We are in a new era of agricultural production: 1. Organic 2. Non-GMO 3. Beef for Chinese Market 4. 😊 ‘Medical’ 😊 marijuana
Questions? Matthew C. Roberts, PhD | www.kernmantlegroup.com | @YourEconProf
The children now love luxury; they show disrespect for elders and love chatter in place of exercise. Children are tyrants, not servants of the households. They no longer rise when their elders enter the room. They contradict their parents, chatter before company, gobble up dainties at the table, cross their legs, and tyrannize over their teachers . --Aristophanes (but often incorrectly attributed to Socrates)
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