Abstract for: When and Where Does Reducing Food Loss Make Sense? A Dynamic Supply Chain Analysis

It is often asserted that reducing food losses is unambiguously beneficial to supply chain actors (often with a focus on the benefits to farmers) and to the environment. However, these assumptions may not accurately reflect the responses of supply chain actors when losses are reduced, nor do they indicate where in the supply chain the reductions will occur. We describe a dynamic model representing multiple interacting supply chain decision-makers (farm, wholesalers, and retailers) using leafy greens (e.g., lettuce) as an example of a perishable food product. Our analyses make explicit the assumptions about the location, extent and costs of reducing food loss, and consider alternative behavioral responses throughout the supply chain. We find that the dynamic impacts on prices and profits for supply chain actors and the cumulative environmental impacts depend on the behavior of supply chain actors—the degree and speed of adjustment to a new stream of orders and the magnitude of any cost changes for reducing loss, the degree of coordination among supply chain actors, and the location in the supply chain where the reduction occurs. Our model of the leafy greens supply chain suggests that common assumptions about the benefits of food loss reduction may be unwarranted. Additional empirical evidence would extend our model to other product sectors and make the results more specific.