Value Generation and Capture in the Agri-Food Value Chain
How do food and agribusiness firms capture more profit in their value chain? How do innovative managers identify attractive adjacency and disintermediation opportunities? What options are available to a manager facing these questions and what economic incentives might motivate their strategic behavior? This study sought to address these timely questions, more effectively understand the strategic decisions facing food and agribusiness managers relative to value chain profit pools, and uncover some of the hidden dynamics between chain participants. Specifically, this study defines and quantifies the U.S. animal protein industry value chain across three species – hogs, cattle, and broiler chickens. The study found evidence to suggest that governance structure has strong ties to value generation and that intra-value chain dynamics impact price transmission between chain nodes. Further, this study creates a foundation for other researchers to continue examining agri-food value chain dynamics and its link to firm-level profitability, value capture, and long-term sustainability.