Introduction
Food loss is a complex issue in the United States that affects all aspects of the supply chain, from growers to consumers. Although many resources have been devoted to understanding how food loss occurs at the consumer level, understanding of how much food never makes it to this final stage of the supply chain is more limited. Deeper knowledge of losses at the farm and pre-retail sectors, and the underlying economic factors that drive these losses, can help shape the conversation around food in the United States and address existing knowledge gaps.
Given the broad heterogeneity among agricultural sectors, we focus this book on food loss in produce from the farm to the pre-retail or consumer level. Earlier literature indicated that on-farm losses were higher for produce than for other agricultural commodities in developed countries (FAO, 2011). We address the lack of subsequent empirical research on this topic by focusing on the economics of food loss in produce experienced early in the supply chain. The discussion focuses on the market decisions that underlie loss and the impact on various aspects of the food supply chain. This book lays the foundation for future empirical research by addressing and documenting the difficulties encountered, the primary drivers of food loss, and the relevant findings within the current literature. Additionally, it draws out lessons from those who have encountered these issues by illustrating how past local, regional, or national estimates of food loss have been conducted with varying degrees of success.
Food loss has become a topic of considerable discussion in the economics literature. Much of the focus has been on the consumer or retail end of the supply chain in developed countries, as these are the sectors where the bulk of losses are believed to occur (Parfitt et al., 2010; Buzby and Hyman, 2012). It may be true that the majority of losses occur later in the supply chain in developed countries, but without a critical examination of the supply chain from the farm to final consumer, we cannot know if researchers are focusing their efforts efficiently or if they are simply looking where the most easily accessible data exists. Because relatively more effort has been spent understanding retail and consumer behavior as it relates to food loss, we focus on the less-examined pre-retail supply chain. Our evaluation focuses on economic factors that influence food loss, loss mitigation strategies, and potential options to reduce food loss in produce.
Existing literature that does examine on-farm food loss is largely focused on environmental impacts (Hall et al., 2009; Cuéllar and Webber, 2010). Although resource use is certainly an important aspect to consider, there is little focus on why the current set of outcomes (e.g., resource use, environmental impacts, and observed food loss) exists. Discussion of actual economic decision-making on the part of the grower or producer is largely absent from the literature. In this book, we provide an economic context for the discussion of food loss as a viewpoint that has not been prevalent in the broader conversation, yet is critical to ultimately reducing food loss. Growers, packers, and other produce handlers make decisions in a high-risk environment; it takes very little change in volume to move prices rapidly, and in most cases global produce markets are highly integrated. However, harvest is costly and often relies on the availability of hand labor. Growers calculate whether additional revenues will cover the cost of each harvest and may decide to leave some produce in the field. In other cases, growers may harvest the product but not haul it, and simply feed it to available livestock or leave it to compost in the field. Each of these strategies has different implications for food loss, and understanding them more fully will help explain why we see losses occurring in the marketplace and what strategies might be undertaken to make changes effectively.
This book provides a critical examination of the reasons for food loss pre-retail and adds to the discussion where knowledge gaps exist. The individual chapters and findings explored in this book coalesce into a picture of why losses occur in a supply chain and what steps might be taken to effectively reduce those losses. Throughout, the book assumes that market outcomes, including some food loss, are rooted in rational choices made by profit-maximizing, risk-minimizing individuals. As a result, some mitigation strategies may not be profitable in a specific sector of the market, thus making them unlikely to be adopted. Additionally, some strategies that are profitable in a single sector may come at the expense of another and may not improve overall market well-being. By providing a rounded viewpoint of food loss on the farm through the early supply chain and examining losses from a variety of perspectives in that supply chain, rooted in economic rigor, we provide a unique perspective on the issue and its possible mitigators.
