AREC 384 grading and standards

standards
- agreed upon language that simplifies the marketing process
- often includes commonly agreed upon yardsticks of measurement
- need some type of enforcement for standards to be credible
why are standards necessary?
- facilitate the automated processes of modern agriculture
- so people know what they're getting
impacts of standards
- operating efficiency
- pricing efficiency
three types of standards
- mandatory
- permissive (recommended)
- tentative (needs further study)
grading
- sorting of similar but not identical products into uniform categories according to a set of predetermined standards
- grading is common but not universal
why is grading necessary?
- allows differentiation of food products in terms of their value to consumers
- consumers have different preferences and WTP for goods of different qualities
grades, unlike standards, are based on __________
- marketing concepts
- heterogeneous preferences
grading must be...
- cost-effective (always consider marginal benefit vs marginal cost)
- objective
- meaningful
problems with food grading
- standards may not be easily measurable
- some criteria are subjective making it hard to come up with standards
- quality at a time/place of measurement may not reflect actual quality at time of purchase/consumption
hedonic analysis
- concerned with the study of the effect of a commodity's characteristics on price
- explains the price of a good in terms of its traits
- ex. housing price models

Author

hcunning

324938

Card Set

AREC 384 grading and standards

Description

lecture 18

Updated

2016-10-26T01:52:46Z

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