Written by: Mike Ritter
The Real Cost of Feeding The World
If you’ve noticed that organics and humanely-raised animals cost more than “regular” food, you’re not alone. The cost of better food is indeed higher than their industrialized counterparts. There is an assumption that health food prices are higher simply because it costs more for farmers to grow. This is partially true as growers of non-industrialized holistic foods incur more bumps, loops, and jumps than an industrial grower. You may think I am referring to organic certification fees and a higher rate of loss to pests, rodents, and insects since they do not use GMO products which naturally keep away predators, but that is just the beginning. The meat industry specifically has suffered through decimation in the number of federally inspected meat processing centers in the U.S. In 1967 Congress passed The Wholesome Meat Act which, over the course of 50 years, eliminated 2/3s of the USDA inspected slaughterhouses. Large facilities close to large meat producers like Tyson, Cargill Meat Solutions Corp.,JBS USA, & National Beef Packing Co., LLC survived the new regulations but other smaller facilities lost so much business that they were either forced to close or become a custom-facility. Once a processing facility gets stamped with the title “custom,” they are no longer allowed to process meat intended for commercial sale since they do not have a USDA inspector visiting the facility. This greatly extended the distance small meat producers have to travel to slaughterhouses, increasing fuel costs, stress to the animals, and lengthy time commitments. Furthermore, the logistical nightmare this act has caused helped the big 4 meat producers to monopolize the industry. Right now, those government subsidized companies process 85.6 percent of all meat distributed in the U.S.. According to economists, once an entity possesses 40% of the market share it is then deemed a monopoly. Monopolies create market immunity and reduce buyer choice. Neither of those consequences is beneficial to you, the buyer.
Tyson Foods Springdale, Ark.
Daily slaughter capacity: 28,700
U.S. market share: 25 percent
Beef sales: $12.7 billion
Cargill Meat Solutions Corp. Wichita, Kan.
Daily slaughter capacity: 29,000
U.S. market share: 21 percent
Beef sales: Cargill Meat Solutions would not release this data. Its parent company, Cargill Inc., reported $88.3 billion in sales in 2009.
JBS USA Greeley, Colo.
Daily slaughter capacity: 28,600
U.S. market share: 18.5 percent
Beef sales: $9.2 billion
National Beef Packing Co., LLC Kansas City, Mo.
Daily slaughter capacity: 14,000
U.S. market share: 10.5 percent
Beef sales: $5.4 billion
On Financial Life Support
Whether you realize it or not, industrial food currently has a false cost. Although it seems cheaper in the grocery store, you are paying nearly as much yearly, as you would for organic/local food. Let me explain.
Because the food system currently cannot sustain itself, the government subsidizes the production of certain foods (corn, wheat, soy, beef etc). These subsidies are paid to the farmers to make up the difference between what they make from production and what they need to stay in business. These subsidies are paid by the government from tax dollars; paid by tax payers. If you are a taxpayer, this means you are paying the difference. This also means that prices can currently stay where they are and are not immediately susceptible to economic and environmental hardships. The farmers’ well-being is consistently floated by aid. It’s essentially set up similar to the medical system. Your co-pay out the door at the doctor could be $25 but the actual billed hour was $90 – $65 covered by the insurance. Although your receipt says $25, your real cost of medical care at the end of the year equation is: total spent at the doctors + total spent on insurance = total price for medical care. The only difference in the food system; you cannot see the total bill at the end of the year. Here’s a blog on true food math.
According to whitehouse.gov, this is how your federal income tax dollars are divvied up:
- Health Care 27.49%
- National Defense 23.91%
- Job and Family Security 18.17%
- Net Interest 9.07%
- Veterans Benefits 5.93%
- Education and Job Training 3.59%
- Immigration, Law Enforcement, and Administration of Justice 2.%
- International Affairs 1.85%
- Natural Resources, Energy, and Environment 1.64%
- Science, Space, and Technology Programs 1.13%
- Agriculture 0.97%
- Community, Area, and Regional Development 0.43%
- Response to Natural Disasters 0.39%
- Additional Government Programs 3.42%
According to taxfoundation.org, in 2011, roughly 136.5 million U.S. taxpayers paid $1,042,571,000,000 in federal income tax. In effect, those taxpayers contributed roughly $10,112,938,700 contributed towards Agriculture. Using whitehouse.gov tax receipt feature, I learned that $56.98 (0.97%) of my tax dollars went towards government sponsored ag.
This contribution allows large scale mono-crop/mono-grazed farms to stay in business. These farms produce the easiest and cheapest foods to grow in mass quantities and/or are genetically modified to be resistant to harsh climate, pests, and produce highest yield per acre.
Despite your funding, you are not guaranteed visible access to the farm and factories to witness how your food in raised & processed.
At face value, the total dollar figure at year’s end isn’t that shockingly expensive. The disturbing part is that most people pay unknowingly or under the assumption that it helps to keep retail prices cheap. Despite the fact that we’re able to produce exponentially more yield for cheaper cost, price continues to rise. Statista reports that ground beef has risen from $1.40/lb in 1995 to $4.16/lb in 2015. This paper from the USDA estimates corn, wheat, and soy, which is at an all-time high, will lower in cost over the next 5 years. Why is this? A quote from that paper may provide some insight:
“the combination of world economic growth, a continued low-valued dollar, and some further expansion of global biofuels production supports longer run gains in world consumption and trade of crops. Prices are projected to fall from recent record highs but remain above pre-2007 levels for many crops.”Source
These projections are all based on factors which are unstable and fairly unpredictable such as global biofuel production which depends on cooperation of foreign affairs and weather. This seems to be a recurring feature of large scale centralized food production. Your local farmer is only somewhat dependent on these factors.
Robb Wolf – Holistic Management and Human Health
Small farmers who get your business directly provide you a real cost for your food. Also, they are susceptible to local economic demand which has its advantages and disadvantages. The more business your local farmer gets, the less he/she needs to charge for their food. Without the middle man, farmers can adjust their prices with market demands and not the uncertainty of foreign affairs and global weather. Secondly, you have the ability to investigate (in a friendly way) their practices in person. By removing this barrier of contact between you and your grower, you increase the presence of accountability and integrity of both parties. Out of sight, out of mind. In sight, in mind.
Another big component of our current food usage that drives prices up is inefficient usage and waste. GMO’s are defended by the argument that they are cheaply made therefore keep food prices down. This isn’t true. GMO and industrial foods are also typically defended by the age old argument that they feed the world and without them we are surely doomed. To counter this, many people are of the opinion that our world has survived for years without GMO products and we are better off without them. In essence, there is one major question that these two groups are trying to answer: Do we really need MORE food?One obvious solution to reduce the cost of food and help feed more people is to eliminate waste. In a fancy steakhouse, the price is not just a reflection of the cost of production of said steak, but the restaurant must insure the profit lost from uncooked, unserved, or returned steaks. Our food in grocery stores is no different. You might be surprised at the amount of food already produced in this country which never makes it to the mouths of consumers. According to this analysis, total food loss at the retail and consumer levels in the US was estimated at $165.6 billion in 2008, $161.6 billion in 2010. This waste ends up costing the consumer $390 a year and $1.07 per day, the average household roughly $936/year or $2.56. Retail losses include dented cans, unpurchased holiday foods, spoilage, and the blemished or ugly food. Consumer losses include spoilage, cooking shrinkage, and plate waste. That’s right; we are still incurring the cost for food we never eat. From a financial & environmental aspect (which we will talk about later), it doesn’t sound like we need to produce more, but rather find more efficient ways to utilize this waste.
GMO corn is largely used (est. 80%) for non-human consumption; livestock feed & corn product (syrups, starches, etc.). It is mostly fed to animals whose natural diet does not include corn (ruminants, pigs), which actually makes the product less valuable from a nutrient standpoint, shrinking your purchase value at the checkout. Further an estimated 2-40% of produce is thrown out at or before market for cosmetic reasons. These are foods which may taste delicious, provide great nutrition, yet are not pretty enough to be placed in the produce section of a grocery store. These items are then tossed and dispensed of as pre-market waste.
“The Food and Agriculture Organization of the United Nations estimates that high cosmetic standards in the retail industry exclude 20 to 40 percent of fresh produce from the market. Sometimes farmers can sell those unwanteds to processors making jam or cider or pickles, but as those systems rely increasingly on mechanization, they become less flexible when it comes to shape and size. Tons of food — 800 to 900 million tons globally each year, the weight of 9,000 Nimitz-class aircraft carriers — rot in storage or don’t make it out of the fields because farmers can’t find a market.”
“Americans waste more than 40 percent of the food we produce for consumption. That comes at an annual cost of more than $100 billion. At the same time, food prices and the number of Americans without enough to eat continues to rise.”
You can help eliminate your own consumer waste by utilizing organ meats, bones for bone broths, roots, leaves and stems for soups, teas and replanting. John Moody, chairman of The Farm to Consumer Legal Defense Fund and Kentucky farmer, circles Louisville coffee shops and gathers old coffee intended for trash and puts it to good use. “I use it to feed my land and animals and have some of the richest soil in Louisville because of it.” Composting can be a very healthy and extremely easy way to add nutrients back into your own land and utilize left over food. Composting is also cheaper for the counties where you live because it could potentially reduce volume of work for sanitation services.
Check out Part 4, the final post in the series.