ECONOMICS OF FOOD

By Rusudan Kareli, Sara Stenard, Jacqueline Melton, Nika MeyersEcon 203- Environmental Economics

Spring 2010

OUTLINE:

Food has become an increasingly important issue in today’s society. In this presentation we explore a series of topics to find out what we are (and more importantly, what we aren’t) paying for at the checkout in supermarkets.

We present four examples of some of the hidden costs of food:

1.Waste - How the food industry developed to supply such incredible quantities of food and the environmental and economic consequences of its waste.

2.Obesity - The influence that powerful food monopolies and advertising have over what we eat.

3. Government subsidies - How they hide the true costs of food to both producers and consumers and the implications of these artificial costs.

4. Meat production and consumption - Inefficiencies of the industry for this staple part of the average American diet.

We conclude by stressing the importance of using this information to make educated decisions about food.

Food Consumption in Monetary Terms

• US GDP is 13.84 trillion • US spends 70.8% of its GDP on Personal Consumption Expenditures

• Nondurable Goods – Food and Beverage Purchase for Off-Premises Consumption• 5.5% of GDP• 7.8% of Personal Consumption

• Services – Food Services and Accommodation• 4.2% of GDP• 6% of Personal Consumption

Adding just the food components together (disregarding accommodation) the US spends

approximately 7% of total GDP on food and beverages annually. This mounts up to around $900

billion every year.

http://www.motherearthnews.com/uploadedImages/Blogs/Relish!/Food-Safety.jpg

Historical Context of Overproduction and WasteBlessed with fertile top soils, mild climates, and reliable water sources, the United

States was an ideal place for agricultural expansion. In light of westward expansion and a need for economic development, the government allocated huge land plots to farmers. The combination of large land plots and the adoption of mechanical technology paved the path for agricultural development in the United States. “In 1837, a farmer needed 148 hours of labor to produce a single acre of wheat; by 1890, he was getting it done in just thirty-seven hours

The Green Revolution was perhaps the catalyst of the food waste issue. During the 1940’s through the 1970’s the development of high-yielding crop varieties, irrigation and cultivation technology, and synthetic pesticides and fertilizers allowed for increased agricultural production. Especially in the case of fertilizers and pesticides. After the war, a huge amount of ammonium nitrate, used for making explosives, remained along with poison-based gases developed for the war. Under USDA direction, the two chemicals became what we know today as fertilizers and pesticides respectively. “Between 1950 and 1980, farm use of nitrogen jumped by a factor of 17.”

The promise of increased yield and an abundant food supply concealed the true incentive for these new practices as evidenced by the evolution of the food system.

Food waste is one aspect of the industrialized food system that we tend to be remiss about. Yet, in light of the growing population there are increasing concerns about food security.

Food security is the availability and accessibility to food. A household is considered “secure” when living without hunger or threat of starvation.

In the United States, 35 million people live in household that do not have food security.

However, there is a myth that is perpetuated by the industrialized food system – that there is not enough food to feed the population and we must compensate by increasing production. As you will learn, the truth is quite contrary. There is an overproduction of food and under-consumption of that food due to unequal allocation of resources.

Food Waste

The United States is one of the largest consumers of food but also one of the biggest wasters. “There are nearly one billion malnourished people in the world, but the approximately 40 million tonnes of food wasted by US households, retailers and food services each year would be enough to satisfy the hunger of every one of them.” –Tristam Stewart

The disparity between

the amount of food

produced and those

who are able to consume

it is growing.

US Food Waste

This graph gives a more comprehensive breakdown in terms of commodity, waste in tones per year, calories wasted (in billions) and the number of people who could have been lifted out of hunger at 250 calories per day

US Food Waste continued

What are the Impacts of Overproduction?

The capitalistic system that drives such production and consumption (or lack there of) is extremely inefficient and is rife with externalities.

• The ability of increased food production leads to an increased supply of the agricultural product on the market.

• Each item of food is handled in the way a commodity would be - “produced wherever costs are lowest, shipped wherever demand is highest.”

• This is allowing us to produce great amounts of food. However, instead of solving the pressing world hunger issues (which is also an important problem in the U.S.), vast amounts of food are wasted by Americans each day!

But what are the hidden costs of overproduction and under-consumption of food as it relates to the environment?

Source: http://www.cerpa.appstate.edu/environment.php

Source: http://www.deeptime.net/blog/wp-content/uploads/2007/12/monoculture01.jpg

Problems:• It makes the entire crop vulnerable to disease or natural disturbances. The neat rows makes it easy for

pests to attack the crop than in a more diverse system.• The heavy machinery used on these fields in combination with the reliance on pesticides and fertilizers

are removing the precious topsoil (needed for productive growth) and contaminating our waters both for drinking and future use. Soil degradation and erosion from hyper intensive farming is wasting millions of acres of farmland a year.

• Not only is this economically inefficient but it lowers the net social benefit for all. This is because industrialized agriculture is bearing huge costs to the environment without reflecting these externalities in the cost of the food.

Monocultures are defied as “large areas planted with a single species or even a single strain or subspecies such as a single hybrid of corn. The use of monocultures is a profit-based decision, because the plants can grow closer to each other thus increasing yield. Typically, these plants grow in strict, defined rows so that the cultivation machinery can easily pass over the field.

Hidden Costs of Overproduction - Monocultures

Eutrophication is the result of a an excess of nutrients in a body of water that cause a bloom of plant life and a death of animal life due to the lack of oxygen. The agricultural run-off containing pesticides and fertilizers most often causes this.

Source: http://www.tamug.edu/research/Biofuels/louisiana_delta_satimage.jpg

 

Desertification is perhaps the most destructive and irreversible threat to agricultural land. Desertification is caused by overusing the land in order to overproduce. The land becomes so nutrient poor and biologically inactive, it is basically transformed into a desert. Problem: Because of desertification, the species that once inhabited the area cannot survive or adapt to current conditions and therefore detract further from biological diversity.

As we can see, consequences of overproduction effect both the economy and the environment

  

Source: http://www.cawater-info.net/all_about_water/en/?p=197

The displacement of soils• Not only does the local quality of the soil degrade, but also –

the eroded soils have to go somewhere and the United States rivers carry about 4 billion US tons of sediment a year.

• Nearly 75% of this sediment is coming from agricultural lands. They fill in productive bodies of water, destroy fisheries, and in tropical regions near the ocean, these sediments can often wipe out entire coral reefs.

• Erosion promotes the sedimentation into bodies of water as previously discussed and can lead to more eutrophication.

Other Hidden Costs of Overproduction

Land Degradation and Genetically Modified Organisms (GMOs)

Many monocultures plant GMO’s in order to meet the ever-increasing (artificial) demand.

Problems: • Their capacity to wipe out native species. • They also may contain substances that are harmful to humans. • Their recent introduction into agriculture and the lack of time that is needed to properly

conduct studies means we don’t have enough data on the adverse effects. • Cross-contamination – for example, if an organic farmer is situated next to one of the

transgenic crop fields and by some unpredictable gust of wind or rainstorm patented seed across are carried to the organic farmers field, the organic farmer is now at risk of patent infringement and is subject to lawsuits and in the worst case-scenario the loss of his field and entire livelihood. Unfortunately this has taken place in our world and many farmers are still at risk.

• The real issue is the fact that although the markets are believed to have “self correcting” nature, these technologies are actually harming the economical ecology of food production and there are also many unknown consequences and intervention and regulation is clearly needed.

Source: http://www.scq.ubc.ca/wp-content/uploads/2006/07/genetransferring.gif

Source: http://politicolnews.com/wp-content/uploads/2009/08/GMO-CORN.bmp

Other Hidden Costs of Overproduction

Resource consumption is one externality of agricultural production that is irreversible and threatens sustainability on all levels. Resource consumption of both renewable and non-renewable resources puts sustainability at danger:water and oil are the heaviest consumed resources .

¼ of all water consumed in the United States is wasted on food that will never be eaten.

• “On average, every ton of grain we grow requires a thousand tons of water.” (Roberts 227)

1,000 tons

1 ton

http://www.purcellmountainfarms.com/Brown%20Teff%20Grain.htm http://www.auburn.edu/projects/sustainability/

newsletter/020909.html

Hidden Costs - Resource Consumption

Water contamination is yet another environmental cost of industrialized agriculture. Not only are we consuming extensive amount of water, but we are also contaminating it. Water is comparable to land in terms of food producing factors because without clean water, we will not have food.

• Fertilizers are especially detrimental to water because it has the potential to bind with oxygen and become nitrous oxide “a major greenhouse gas and three hundred times more potent than carbon dioxide.” (Roberts 18)

• From an economic perspective, the consequences of just the surface water contamination cost the United States $16 billion every year (Roberts 21).

• Groundwater is where most of drinking and irrigation water originates from, yet in 17 states, factory farm runoff has poisoned the ground water and polluted over 35,000 miles of rivers in the United States.

Pesticides, herbicides and fungicides are another threat to water resources and they are linked to both environmental and human health problems. • Agricultural runoff is the biggest single source of nonpoint water pollution. About one billion pounds of

chemicals are dumped on monocropped fields. • Many of the chemicals dumped on agricultural fields have to be updated because the intended targets

develop resistance. In the case of pesticides the neural-disruptive abilities also can pass through human skin and cause nervous system disorders such as seizures, mental impairment and coma.

Source:http://www.nrmconsulting.co.za/environmental_management.php

Source: http://www.whoi.edu/cms/images/lstokey/2005/1/v43n1-solow3en%202_5547.jpg

More Hidden Costs – Water Contamination

Hidden Cost of Oil Consumption

Where is oil used? • 31% for the manufacture of

inorganic fertilizer• 19% for the operation of field

machinery·    • 16% for transportation·•   13% for irrigation·• 08% for raising livestock (not

including livestock feed)• 05% for crop drying·     • 05% for pesticide production• 08% miscellaneous8

Problems associated with the vast amount of oil used in the food industry:• From the tractors, irrigation pumps to the trucks and trains that move our food, cheap oil is the source

of production. • Globalization of goods condemns us to a reliance on cheap fuel, a fixed resource that is limiting

sustainable production.• The amount of oil that it takes to grow, produce and transport food is one consideration that has only

recently been attended to. • In the wake of rising oil prices and a diminishing supply, these are not the only problems that arise with

food production.

Review of Waste

We are wasting the much needed clean, abundant water.

We are wasting food and sacrificing our health at the same time

10 pounds of grain 1 pound of meat

•  Stuart, Tristram. Waste: Uncovering the Global Food Scandal. New York: W.W. Norton & Company Inc., 2009. Print

• Roberts, Paul. The End of Food. New York: Houghton Mifflin Harcourt, 2008. Print• Pollan, Michael. The Omnivore’s Dilemma: A Natural History of Four Meals. New York: Penguin Group, 2006• Hall, D.K. et al. “The Progressive Increase of Food Waste in America and Its Environmental Impact. Laboratory

of Biological Monitoring. 25 November 2009: online publication• Steinhart, J.S., Steinhart, C.E. “Energy Use in the United States Food System.” Science(184). 19 April 1974:

307-316. Online access http://www.sierraclub.org/truecostoffood/video/tcof_hi.movhttp://www.epa.gov/oppbead1/pestsales/01pestsales/market_estimates2001.pdf• Food Business News – GDS Publishing. Next Generation Food: Food Waste. 2010. Web. 23 April 2010. (

http://www.nextgenerationfood.com/) • Marsh, Bill. “One Country’s Table Scraps, Another Country’s Meal.” The New York Times/ USDA Census

Bureau. 18 May 2008. Web. 29 April 2010. • Botkin, Daniel B., Edward A. Keller. Environmental Science: Earth as a Living Planet. New Jersey: John Wiley &

Sons, Inc., 2007• “U.S. Food System.” Center for Sustainable Systems. University of Michigan. Pub. No. Css01-06. 2009. 1 May

2010.• “The Trust Cost of Food Guide for Discussion Leaders.” Sierra Club Sustainable Consumption Committee.

Sierraclub.org. 23 April 2010.• Hungry for Change. TakePart, LLC 2008-2010. 23 April 2010.

References for Part 1

Adam Smith

Adam Smith was a great advocator of the laissez-faire policy. He believed that

humans were selfish beings and that they only acted to maximize their own

personal well-being. However, he claimed that free markets produced the right

amount of goods with the help of the “Invisible hand”. He said that due to

competition the prices would be kept low and people would still produce a wide

spectrum of goods and services. But in today’s world we can see that things are

not as easy as Adam Smith had imagined them to be. Laissez-faire policy often

leads to market failure and harms the society. This can be observed across many

markets, especially the Food Market.

Market Failure - Monopolies

One of the market failures of the Food Market is having

monopolies. In a capitalist system there is fierce competition

among companies that are constantly trying to expand and increase

their profit margins, however capitalism favors and reinforces those

with power.

Example: A single company (Monsanto) controls the seeds of 93% of soybeans and 80% of the corn grown in the United States.

http://thebsreport.files.wordpress.com/2009/06/adamsmith.jpg

http://blog.law.cornell.edu/tbruce/files/2009/11/monopoly.jpg

http://www.monsanto.com/

On the other hand, in 2008 there were only about 1.2 million farmers,

ranchers, and agricultural managers to feed over 303 million people in

the Uinted States.

Having so many large corporations and so few farmers, shows that

there is unhealthy competition in the market. These large companies,

that are clearly primarily driven by profits, have a lot of political,

economic and financial power so they can manipulate and control the

market as well as the government. And - they can also control people’s

choices.

Market Failure

http://www.floridafarmbureau.org/files/resources/news/AmericanFarmer.jpg

As we know the determinants of equilibrium level of output in a market are the supply of products by producers and the demand for these products by consumers. In the food industry, even the demand side of the market is heavily influenced and dominated by producers.

- What does this lead to? - Obesity (only one of MANY negative consequences)!

http://www.lebjournal.com/newz/wp-content/obesity.jpg

Market Failure

According to the U.S. Surgeon General, “Obesity is the fastest growing cause of disease and death in America”. And the crisis is not unique to the U.S.

According to the World Health Organization (2003), the obesity epidemic is “A major contributor to the global burden of chronic disease and disability”.

While discussing obesity, it’s also important to discuss advertising. Health authorities believe that the main reason for unhealthy food consumption that is leading to obesity is the accumulation of unhealthy messages communicated to children through food advertising. But they also think that monitoring advertising would be equally beneficial for adults.

Market Failure - Obesity

Cost of Obesity:Several studies have shown that America spends asmuch as $147 billion annually on the direct andindirect costs of obesity. This makes up 9.1% ofmedical spending in a country where a lot of peoplecan’t even afford basic medical treatment.

Are you still surprised that the US GDP is as high as $13.84trillion?!

Advertising Expenditures

• In the United States, food, beverage, candy, and restaurant advertising expenditures was $11.26 billion in 2004, versus $9.55 million to promote healthful eating. So, less than (0.08%) of advertising expenditures was spent on promoting healthful eating!

• In 1997, the U.S. Department of Agriculture spent $333.3 million on nutrition education, evaluation, and demonstrations. Same as what the food industry spent on advertising just for coffee, tea, and cocoa. Less than half the amount was spent promoting beer, or candy and gum, or breakfast cereals.

But why is it safe to assume that there’s a clear link between advertising and obesity?

http://www.sodblog.com/wp-content/uploads/bksevenincher.jpg

http://ssl.honoluluadvertiser.com/pages/07bestofthebest/images_ads/ads_starbucks.jpg

http://www.gizmodiva.com/entry_images/1008/16/breakfast_cereals_2.jpg

And it may be no surprise that over the past 30 years, thepercentage of just the children and adolescents in the U.S. who are overweight or at risk of becoming overweight has more than tripled to 37% and 34%, respectively.

Advertising Expenditures and Consequences

Proof: According to one of many studies conducted on this topic,children consumed 45% more unhealthy snacks whenexposed to food advertising. Adults consumed more of bothhealthy and unhealthy snack foods following exposure tosnack food advertising compared to the other conditions.In both experiments, food advertising increased consumptionof products not in the presented advertisements, and theseeffects were not related to reported hunger or other consciousinfluences. These experiments demonstrate the power of foodadvertising to automatic eating behaviors and therefore it islogical to conclude that they influence far more than brandpreference alone.

“National Income and Product Accounts Table: Table 1.5.5. Gross Domestic Product, Expanded Detail.” U.S. Department of Commerce, Bureau of Economic Analysis:. 26 Mar. 2010. 22 Apr. 2010<http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=35&Freq=Qtr&FirstYear=2007&LastYear=2009>.

Murphy, Dave. “DOJ's Holder calls for Historic Era of Antitrust Enforcement in Agriculture.” Food Democracy Now. 18 Mar. 2010. 14 Apr.2010<http://fooddemocracynow.org/blog/2010/mar/18/dojs-holder-calls-historic-era-antitrust-enforceme/> .

“Farmer: How many jobs are there?” Bureau of Labor Statistics. 19 Mar. 2010. 22 Apr. 2010 < http://www.bls.gov/k12/nature03.htm> .

Carmona, Richard H. “The Obesity Crisis in America.” U.S. Department of Health & Human Services, Office of the Surgeon General. 8 Jan. 2007. 20 Apr. 2010< http://www.surgeongeneral.gov/news/testimony/obesity07162003.htm>.

“Global Strategy on Diet, Physical Activity and Health: Chronic Disease Informaiton Sheets.” World Health Organization. 21 Apr. 2010 < http://www.who.int/dietphysicalactivity/publications/facts/en/>.

Consumers Union.org Nonprofit Publisher of Consumer Reports. 13 Sept. 2005. 21 Apr. 2010 <http://www.consumersunion.org/pub/core_health_care/002657.html> .

Gallo, Anthony E. “Food Advertising in the Unites States.” Food Advertising 2009: 173-180. 21 Apr. 2010 <http://www.docstoc.com/docs/22297639/Food-Advertising-in-the-United-States/>.

Harris, Jennifer L., Bargh, John A., and Brownell Kelly D. “Priming Effects of Television Food Advertising on Eating Behavior.” Health Psychology. American Psychological Association 2009: Vol. 28. No. 4, 404-413. 21 Apr. 2010<www.yale.edu/acmelab/.../Harris_Bargh_Brownell_Health_Psych.pdf>.

U.S. Annual Advertising Spending Since 1919. 14 Sept. 2009. 21 Apr. 2010. <http://www.galbithink.org/ad-spending.htm>.

Holden, Diane. “Fast Check: The cost of obesity.” CNN Health. 9 Feb. 2010. 21 Apr. 2010 < http://www.cnn.com/2010/HEALTH/02/09/fact.check.obesity/index.html> .

References for Part 2

http://www.dailyyonder.com/files/u2/subsidies-map499.jpg

Subsidy is a paid form of financial assistance supplied by the government.

There are two types of subsidies to consider when looking at the US food system relating to both the supply and demand of producers and consumers

• On the supply side farm subsidies are given to a farmer though federal direct payments

• On the demand side food subsidies are given to the consumer in terms of programs such as the Food Stamps Program.

Supply and Demand

Subsidies

Note: The crops the US subsidies do not correlate with the nutritional needs the population.

http://www.seriouseats.com/required_eating/images/20071101saladmac.jpg

Supply Side - Farm Subsidies

HTTP://MTPLEASANTGARDEN.FILES.WORDPRESS.COM/2009/10/FARM-SUBSIDIES.JPG

Farm subsidies are intended to raise a farmer’s income, however instead they

• Increase overproduction • Distort price signals• Promote bad decisions such as planting crops that are

not demanded by consumers.• Create unrealistic representations of externalities within

food prices due to subsidies in fossil fuels and transportation systems

Since the prices of crops are what farmers use to determine which crop and in what quantity they should produce, when the true cost of production is hidden they no longer rely on the market system to dictate their crops.

The $180 billion farm bill before the 2002 elections not only encourages the crop overproduction that depresses crop prices and farm incomes, but also undermines trade and encourages other nations to refuse American exports.

Effects• They deflate the price of US crops causing a negative impact on international trade.• Critics argue that subsides promote poverty in developing countries since they artificially

drive down the world crop prices. This means that local farmers are forced out of the market system due to the falsified cheap prices of developed nations resulting in collapse of production. Not only does this defeat the purpose of trying to create more food at a cheaper rate, but it threatens domestic food security, the potential of trade and success of developing nations.

• The real cost of food becomes hidden and the promotion of commodity based foods in opposition with regional and culturally appropriate diet becomes dominant.

Demand Side - Food Subsidies

The major food subsidy programs • Food stamps • School breakfast/lunch programs• Woman, Infants and Children programs.

These subsidies cost 2009 taxpayers $79 billion.

ProblemThese programs politically make sense but fail to be economically and nutritionally sufficient.

School Lunch Program• Served 20 million students• Cost 2009 taxpayers $16 billion. • The lunch program was initially created in the 1970s after

WWII to increase our national security and strengthen our military in response to recruiting malnourished youth suffering from the depression.

Problems• 27% of 17-24 year olds are now unable to enlist in the

military because they are overweight. • In 2008 the USDA gave $2.42 per student per lunch,

however after taking out overhead and payroll costs schools were left with $.80 per student.

• The program supplies non nutritious food

Food Stamp Program • Served 28 million people• Cost 2009 taxpayers federal taxpayers $56 billion in fiscal

2009• Created to protect low-income families from hunger.

Problems• Because of mass amounts of paper work it discourages people

from seeking benefits they are entitled to• Government spends billions of dollars in administrative costs • Billions of dollars lost in erroneous/ fraudulent transactions.

As we can see - food and farm subsidy programs maintain “an out of date model of increasing caloric intake of low-income Americans.”

Highly subsidized crops have allowed for the creation of food subsidy programs to protect low-income families from hunger

References for Part 3 "Agricultural Subsidy." Wikipedia. 2010. Web. 26 Apr. 2010. <http://en.wikipedia.org/wiki/Agricultural_subsidy>. Akande, Wole. "Agricultural Subsidies in Rich Countries." Global Policy. Apr. 2002. Web. 26 Apr. 2010. <www.globalpolicy.org/component/content/article/162/27731.html>. Berg, Joel. “Doing What Works to End U.S. Hunger.” Center for American Progress.March 2010. Web. Fri. 30. 2010.<http://www.americanprogress.org/issues/2010/03/dww_hunger.html>

 Edwards, Chris. “Food Subsidies.” Down Sizing the Government. 2009. Web. 26 Apr. 2010. <www.downsizinggovernment.org/agriculture/food-subsidies>.  Pirog, Rich, Timothy Van Pelt, Kamyar Enshayan, and Ellen Cook. Food, Fuel, and Freeways:An Iowa Perspective on How Far Food Travels, Fuel Usage, and Greenhouse Gas Emissions. Iowa State University. Leopold Center for Sustainable Agriculture, June 2001. Web. 20 Apr. 2010. 

Pollan, Michael. “You Are What You Grow.” New York Times. Apr. 2007. Web. 25 Apr. 2010. <http://www.nytimes.com/2007/04/22/magazine/22wwlnlede.t.html>.Riedl, Brian.” Another Year at the Federal Trough: Farm Subsidies for the Rich, Famous, and Elected Jumped Again in 2002.” The Heritage Foundation. May 2004. Web. 3 May. 2010 <http://www.heritage.org/Research/Reports/2004/05/Another-Year-at-the-Federal-Trough-Farm-Subsidies-for-the-Rich-Famous-and-Elected-Jumped-Again-in-2002>  Riedl, Brian. “How Farm Subsidies Harm Taxpayers, Consumers, and Farmers, Too.” The Heritage Foundation. June 2007. Web. 25 Apr. 2010 <http://www.heritage.org/Research/Reports/2007/06/How-Farm-Subsidies-Harm-Taxpayers-Consumers-and-Farmers-Too> Hutchison, Courtney.“School Lunches Are a Threat to National Security, Retired Officials Say Is Cafeteria Food Making Teens Too Fat to Fight?” ABC News. Apr 2010. Web. Apr. 27 2010 < http://abcnews.go.com/Health/Wellness/school-lunches-pose-national-security-threat-ret-military/story?id=10424313>  Killer at Large: Why Obesity Is America's Greatest Threat. Dir. Steven Greenstreet. Perf. Bill, Clinton; Ralph, Nader; Arnold, Schwarzenegger; Chevy, Chase; Jayn, Chase; Richard, Carmona. Netflix.com. 2008. Web. 27 Apr. 2010. <http://www.netflix.com/WiMovie/Killer_at_Large_Why_Obesity_is_America_s_Greatest_Threat/7011

Meat Consumption

GloballyGlobal meat consumption has doubled in the last 50 years. In developing countries it doubled in only 20 years.

In the U.S.• Daily meat consumption is about 330g (or nearlythree quarter-pounder cheeseburgers) per day.• This is roughly double the USDA’s recommended

intake of 142-184g. • While the U.S. makes up only 4.5% of the global

population, we account for 15% of global meat consumption.

Consumption Trends:• Poultry consumption is growing at the fastest rate• The rates of per capita consumption of all meat fell

in 2009 due to recession related reduction in demand,as well as increased price of feed grains.

• Consumption is expected to gradually increase in the future.

Monopolies

Four companies control 66% of the pork packing industry

Four companies control 83% of the beef packing industry

Inefficiencies of Industrial Meat Production

Where does our meat come from?• Meat used to be produced in farms with

integrated livestock and cropping systems, but due to today’s industrial method of production, most livestock is produced in Confined Animal Feeding Operations (CAFO).

• CAFOs allow for standardization and lower monetary costs of production

• CAFOs treat animals very poorly

What makes this system inefficient?• Animals in CAFOs are grain fed. This leads to land

use inefficiency.• 80% of corn grown in the U.S. ends up as feed for

domestic or overseas livestock, poultry, or fish production.• According to a report by the Food and Agriculture Organization (FAO) and World Health Organization (WHO) on one hectare of

land, we could feed 22 people for one year by growing potatoes or 19 by growing rice as opposed to 2 and 1 for lamb and beefrespectively.

• Only 12% of our corn ends up in human food (including processed corn such as high fructose corn syrup).• Raising animals on feed is also energy inefficient, every year 41million tons of plant protein are fed to U.S. livestock to produce

only 7million tons of animal protein for human consumption.

Meat Production Externalities

Consequences of vast amounts of feed needed

Land degradation and deforestation:91% of land deforested in the Amazon since the 1970s is the result of conversion to livestock pasture. Deforestation leads to a significant loss in ecosystem services.

Loss of biodiversity:Because of the industrial nature of our farming, much of the converted land is monocropped, in which only one speciesis planted. We reduce species diversity first through deforestation of the species-rich forests. Then, by monocropping, we do not replenish any of species diversity.This not only depletes the soils, but also reduces ecosystemresilience as discussed previously.

Meat Production Externalities (Continued)

Pollution:• CAFOs produce large quantities of animal wastes in a small space.

Whereas farmers would apply manure back to their fields, CAFOs are usuallyseparated from any farm setting, so the waste is put into lagoons.

• Mismanagement of these lagoons allows manure to leach into the ground andinto our water supply.

Water Use:• Not only does livestock production heavily pollute water, it is also a major

water consumer. It takes 12,009 gallons of water to produce just one pound of beef.

Meat Production Externalities (Continued)

Global Climate Change:• According to a 2006 report by the (Food and Agriculture

Organization (FAO), livestock production contributes to 18% of global greenhouse gas emissions.

• Livestock production also accounts for 80% of the agricultural sector’s greenhouse gas emissions.

Meat Consumption Externalities

Consumption:Externalities of meat don’t stop at production. Because we don’t internalize the externalities of production, we receive artificially low-priced meats. This leads to over-consumption of meat which leads to obesity and other health-related risks.

Health costs:• Meat consumption has been linked to certain cancers, cardiovascular

disease, diabetes, and more.• 1 in 3 children born in the U.S. after the year 2000 will develop

diabetes. • 1 in 5 of our healthcare dollars goes to preventing or caring for

diabetes.

References for Part 4Bittman, Mark. The staggering cost of rising world meat production. The New York Times. 28 Jauary 2008; Online acces. 26 April 2010.

<http://www.nytimes.com/2008/01/27/business/worldbusiness/27iht-meat.1.9525251.html>

EPA. Animal Waste. 2010. Online access. <http://www.epa.gov/region9/animalwaste/problem.html>

EPA. Major Crops in the U.S. 2010. Online access. <http://www.epa.gov/oecaagct/ag101/cropmajor.html>

FAO/WHO. Diet, Nutrition and Prevention of Chronic Diseases. WHO Report Technical Series: 916. 2003. Print

FAO. Livestock impacts on the environment. FAO Magazine Spotlight. 2006 Online access.

FAO. Livestock’s Long Shadow. Communication Division of the FAO. Rome, Italy. 2006. Print

Lundqvist, J., C. de Fraiture and D. Molden. Saving Water: From Field to Fork-Curbing Losses and Wastage in the Food Chain. SIWI Policy Brief. 2008. Print.

Nelson, Jeff. How much water to make one pound of beef? VegSource Interactive, Inc. 2001. Online access.<http://www.vegsource.com/articles/pimentel_water.htm>

Patel, Raj. The Value of Nothing-The $200 Hamburger. 2010. Online access. <http://vodpod.com/watch/2982007-raj-patel-the-value-of-nothing-the-200-hamburger>

Pimentel, David. Livestock Production. Cornell Science News. 1997. Online access. <http://www.news.cornell.edu/releases/aug97/livestock.hrs.html>

Robbins, John. What about grass-fed beef? Online access. 20 April 2010. <http://foodrevolution.org/grassfedbeef.htm>

Stokstad, Eric. Could Less Meat Mean More Food? Science 327: 810 – 811. February 2010. Print.

Think!

Hopefully we all agree by now that we live in a finite world. Considering the amount of impact that food production and consumption has on the environment in terms of exhausting both its environmental sink and source capacities, and also considering the ever-increasing levels of consumption, obesity, waste not just in the US but also worldwide, we can see that at this rate, we’re on the way to real destruction of the the society and the entire ecosystem.

Obviously, the government needs to step in more extensively in order to try and resolve the market failures such as monopolies, over-consumption and obesity, misleading advertising of unhealthy foods and beverages.

What can YOU do?

Next time you decide to buy food, think about what has influenced your decision to make that purchase. Is it something that you really need and want or is it the result of monopolistic power and clever advertising?

http://www.motherearthnews.com/uploadedImages/Blogs/Relish!/Food-Safety.jpg

Other Possible Solutions

Sources: http://www.tristramstuart.co.uk/photography.html

• Buy only what you need, not what you think you need and consider the amount of resources that went into producing the item.

• Start composting, this way you can attempt to close the loop between your own consumption and disposal.

• Food choice is a political choice and you have the power to demand a more efficient system, just be sure to gather your information and educate yourself on the food you are consuming.

• Reconsider what you eat and the real cost of your food!

• Look into political action being taken regarding subsidies

• Urge the government to implement healthy foods in schools

• Take action to increase nutritional education of yourself and of those around you

If the average American reduced meat consumption by 20%, the resulting reduction in GHG emissions would be the same as if every American drove a Prius. (Eshel and Martin 2006)

Are you still wondering if you can make a change within the current system? Consider this:

Documentary Killer At large: Why Obesity is America’s Largest Threat

Great Additional Resources

Documentary FOOD, INC.

http://www.ebmcdn.net/prb/html/prb-malthus-0310a/index.htmlFirst Annual Malthus Lectureship