overview
A search for the birthplace of the cows whose meat went into a particular pound of hamburger or for the farms that grew the wheat used in a box of cereal may seem like looking for a needle in a haystack. But U.S. ranchers, farmers, food manufacturers, and distributors have a number of incentives to keep records tracking food production and distribution. These records provide information on the flow of food and food products throughout the U.S. food supply system and aid in tracking food to its source.

contents

• Market incentives to establish traceability
• Private sector traceability systems balance costs and benefits
• Industry and government response to market failure

features
Traceability in the U.S. Food Supply: Economic Theory and Industry Studies—This report describes the results of an investigation into the amount, type, and adequacy of traceability systems in the United States, focusing particularly on the fresh produce sector, the grains and oilseeds sector, and the cattle/beef sector. The results stem from research into the market studies literature, interviews with industry experts, and on-site interviews with owners, plant supervisors, and/or quality control managers in fruit and vegetable packing and processing plants; beef slaughter plants; grain elevators, mills, and food manufacturing plants; and food distribution centers.

The investigation also finds that traceability systems vary across industries as firms balance the private costs and benefits of traceability to determine the efficient level of traceability. In cases of market failure, where the private sector supply of traceability is not socially optimal, the private sector has developed a number of mechanisms to correct the problem, including contracting, third-party safety/quality audits, and industry-maintained standards. The best-targeted government policies for strengthening firms' incentives to invest in traceability are aimed at ensuring that unsafe or falsely advertised foods are quickly removed from the system, while allowing firms the flexibility to determine the manner. Possible policy tools include timed recall standards, increased penalties for distribution of unsafe foods, and increased foodborne-illness surveillance. A related brochure highlights the report's findings.

Country-of-Origin Labeling—This feature contains resources related to country-of-origin labeling research and issues, including the report Country-of-Origin Labeling: Theory and Observation, which examines the economic rationale behind the various claims about the effect of country-of-origin labeling and indicates that mandatory country-of-origin labeling would likely generate more costs than benefits. Voluntary country-of-origin labeling is an option, but food suppliers have generally discounted the U.S. label as a quality attribute that can attract sufficient consumer interest.

recommended readings
Economics of Food Labeling—Traces the economic theory behind food labeling and presents case studies of government intervention in labeling (nutrition information and "dolphin-safe" tuna) as well as examples of proposed or pending government intervention (country-of-origin labeling and genetically engineered food labeling).

Traceability for Food Marketing and Food Safety: What’s the Next Step?—Food suppliers and government each have several motives to document the flow of food and food products through production and distribution channels—and to differentiate foods by characteristics and source. An area where traceability has received considerable attention—mandatory tracking of genetically engineered crops and food—is not among the practical or efficient uses of traceability.

The U.S. Food Marketing System: Competition, Coordination, and Technological Innovations Into the 21st Century—Focuses on recent trends in the food supply chain (manufacturing, wholesaling, grocery retailing, and food service) and provides a detailed overview of developments in structure, performance, information/traceability systems, new technology, and foreign direct investment.

See all recommended readings...

related briefing rooms

• Agricultural biotechnology
• Cattle/beef
• Animal production and marketing issues
• Economics of foodborne disease
• Farm and commodity policy
• Food market structures
• Government food safety policies
• Organic farming and marketing
• U.S. agricultural trade
• Industry food safety actions
• Information policy

related link
United States Department of Agriculture—Provides information on food labeling, food safety, and related issues.

for more information, contact: Elise Golan
web administration: webadmin@ers.usda.gov
page updated: March 18, 2004