Predicting Firm Diversification in Agri-Food Value Chains

Diversifying agri-food value chains and the firms within them is one proposed strategy for increasing resilience within the global agri-food sector; however, adapting policy to specific firms based on their level of diversification is challenging in practice due to frequent data limitations. We investigate whether more easily observable firm characteristics can predict diversification for firms in the agri-food value chain, thereby facilitating policy targeting. Using regression analysis of survey-based data from roughly 200 agri-food firms in the United States, we find that few firm characteristics reliably predict diversification, but engagement in direct-to-consumer sales is positively correlated with firm diversification.