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The Public Is Getting Totally Ripped Off on the Price of Meat, and Doesn't Know It

Our taxes subsidize the animal food industry.
 
 
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Photo Credit: Conari Press

 
 
 
 

The following is an excerpt from Meatonomics: How the Rigged Economics of Meat and Dairy Make You Consume Too Much—and How to Eat Better, Live Longer, and Spend Smarter by David Robinson Simon  ( Conari Press, 2013): 

Imagine a bakery that sells every cake, pie, or loaf of bread for a dollar less than it costs to make. It’s a challenging business model, to say the least. But instead of going out of business, say the shop flourishes and expands, adding more ovens and increasing output for years. Impossible, right?

For a bakery, maybe. But not for America’s big producers of meat, fish, eggs, and dairy. The animal food industry actually uses this contrarian business model with surprising success. Take hog farmers, who routinely spend an average of eight dollars more rais­ing each pig than the animal yields when sold.  The farmers, at least the big corporate operators, are in hog heaven. That’s because government subsidies actually make this business model profitable for those at the top. For the same reason, corporate beef producers routinely spend from $20 to $90 more than each animal’s value to raise cattle.

Each year, American taxpayers dish out $38 billion to subsidize meat, fish, eggs, and dairy. To put this corporate welfare package in perspective, it’s nearly half the total unemployment benefits paid by all fifty US states to unemployed workers in 2012.  However, as we’ll see, unlike unemployment payments, subsidies don’t actually benefit many Americans—nor many farmers—and they are often disbursed in illogical and unfair ways. Consider this: media mogul Ted Turner and former NBA star Scottie Pippen were among the more than one thousand non-farming New York City residents to pick up farming checks from the federal government in 2007.

When it comes to the market for crops used as animal feed, which means the majority of crops grown in this country, Ameri­ca’s enormous farm subsidy program turns the system topsy-turvy. Bizarrely, government handouts encourage farmers to grow more of these crops even as prices decline. This is as backward as parents giving their kids extra money to make cold lemonade in the middle of winter. It just doesn’t make sense. Perhaps even worse than wast­ing the money, the consistent result of such a subsidy policy is to put small farmers out of business and damage rural communities here and abroad. But it doesn’t end there. Taxpayers also provide subsidies to encourage fishing even when it would otherwise be unprofitable. Yet with twice the number of fishing ships patrolling the seas than are necessary for the task, humans have already destroyed one-third of the ocean’s fisheries and, unless we cut back, are headed for complete destruction of all currently fished species within several decades.

Few Americans are aware of the realities of meatonomics—the economic system that supports our nation’s supply of animal foods— yet the peculiar economic forces powering our food system influence us in ways few imagine and nudge us to behave in ways we normally wouldn’t. Among its various effects, one of the most unsettling is that the system encourages us to eat much more meat and dairy than the United States Department of Agriculture (USDA) advises.

According to conventional wisdom, factors like taste, dietary beliefs, and cultural traditions drive our decisions to buy animal foods. But the reality is that price plays a huge role in our eating choices as well. The alarming result of consumers watching our pocketbooks so carefully is that producers, who work hard to keep prices artificially low, are heavily responsible for driving demand. Doubling down on their strategy, producers also bombard shoppers with misleading mes­sages about the need to chow down on animal foods. Consequently, Americans have, to a great extent, become puppets of the animal food industry. We eat what and how much we’re told to, and we exercise little informed, independent judgment. You might think you know why you choose to eat certain foods, but as we’ll see, the real reasons are much more complicated.