Innovation drives food business – Audio

Paul Mitchell, Extension Agricultural Economist
Department of Agricultural and Applied Economics
UW-Madison College of Agricultural and Life Sciences
pdmitchell@wisc.edu
(608) 265-6514, (608) 263-3964
NOTE: Third in a series for 2017 Wisconsin Agricultural Outlook Forum Jan. 19
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AGENDA & REGISTRATION

2017 Wisconsin Agricultural Outlook Forum

2:56 – Total Time
0:19 – Food and beverage in Wisconsin
1:05 – Specialty cheese lead by example
1:40 – Craft beer improves margins
2:05 – Value added benefits
2:46 – Lead out

TRANSCRIPT

Sevie Kenyon: Taking a look at Wisconsin’s strong food and beverage industry we’re visiting today with Paul Mitchell, Department of Agricultural and Applied Economics, University of Wisconsin-Madison/Extension in the College of Agricultural and Life Sciences and I’m Sevie Kenyon. Paul, start out by giving us a snapshot of the food and beverage industry in Wisconsin.

Paul Mitchell: There’s a lot of food production in the state that happens, I mean obviously with the cheese and dairy. There’s other industries the same thing I’m thinking of the meat industry, we think of Johnsonville and the bratwurst stuff like that but there’s lots of smaller meats going on there as well as other large companies. Another sector is we’re a major canning and freezing of vegetables and that industry has been going through consolidation and shrinking but, we’re still a major player in that globally there’s certain parts of the world that love our canned sweet corn we ship a lot of it to Japan. The other one is fermentation a lot of the beverages we make, there’s a lot of pickles and pickled food, sauerkraut is another major crop here. People don’t think of those and that’s all what I call after the farm gate processing.

Sevie Kenyon: And what’s the status of these businesses in the state?

Paul Mitchell: There’s so many specialty cheeses now and that’s a major innovation that’s going on in the dairy sector and we’re seeing the same thing going on in the meat sector as a business operation and even in the vegetable industry struggling with it I think, the canned vegetables that’s just not as popular anymore. We moved much more to fresh and frozen, but especially fresh and I think we can compete in that, we have to figure out how. We need some more work on innovation and these industries are working hard at this cause that’s what they do businesses always have to innovate to survive.

Sevie Kenyon: And our beverages?

Paul Mitchell: Yeah fermentations, I’m thinking of all the micro breweries again that’s another one that we’re doing very well in that. There are issues in all these industries between labor supply, technical skills, import export issues and things like that. These are all important and they can impede or accelerate an industry and help us out tremendously if that sector grows even bigger.

Sevie Kenyon: What are the benefits of going to value-added processing?

Paul Mitchell: When you produce a commodity product you only make a little bit for each unit you produce so each pound of Velveeta cheese you make; you make only a little tiny bit. IF you can make an artisanal cheese and sell the same number of pounds you’re getting a much thicker margin that means more income staying in the state, that means more jobs, it usually takes more people to make that artisanal cheese. The key in all that, that creates that margin that’s more income retained and captured it’s the need for innovation and that takes a lot of thinking and getting a head of the curve on the innovation is very difficult. We’re trying to help industry innovate and that’s the crux of the issue is coming up with these new ideas that work.

Sevie Kenyon: We’ve been visiting with Paul Mitchell, Department of Agricultural and Applied Economics, University of Wisconsin-Madison/Extension in the College of Agricultural and Life Sciences and I’m Sevie Kenyon.