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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.

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The forces of meatonomics affect the well-being of the planet and its inhabitants, including tens of billions of animals used for food, and millions of small farmers here and abroad. Learning how these forces work can help you improve your personal life and the world in so many impor­tant ways, including saving money, losing weight, boosting your health, living longer, protecting animals and the planet from abuse, and preserving rural communities in the United States and elsewhere.

Meet the Owners

The Occupy Movement knows them as the One Percent. Comedian George Carlin called them the country’s Owners. They’re the rich power brokers behind the scenes, the business aristocrats who own almost everything in the United States and either influence or make almost all the important decisions in the country. In the meatonomic system, the Owners enjoy a base of economic and political power practically unequaled in any other industry.

The animal food sector wields its considerable economic clout to exert enormous influence over lawmaking at both the state and fed­eral levels. In the past several decades, animal food producers have convinced lawmakers to adopt a broad range of legislation—includ­ing some so over the top that it can only be called shocking—to pro­tect the industry and ensure its profitability. For example, it’s illegal to “defame” animal foods in thirteen states, and as Oprah Winfrey learned firsthand from a tangle with Texas beef producers, the indus­try does not hesitate to sue those who say unkind things about its products. Further, because undercover investigations at factory farms invariably yield graphic images of unsafe and inhumane conditions, the industry has sought—with surprising success in a number of states—to stop the flow of these shocking images by criminalizing the exposés.

Then there’s the federal food bureaucracy. Meat and dairy produc­ers have conquered the two main US agencies that oversee them—the USDA and the Food and Drug Administration (FDA)—through a pro­cess economists call “regulatory capture.” This influence makes the USDA so bipolar, it’s a befuddling exercise to figure out the agency’s message or mission. The thirteen-member committee that formulated the agency’s latest set of nutrition recommendations was tasked with looking out for the nation’s health. But the group included nine mem­bers with ties to the food industry, casting doubt on the committee’s good faith and on the reliability of its output. In one example typi­cal of the agency’s institutional confusion, a USDA brochure advises Americans to eat less cheese, while the agency simultaneously sup­ports advertising that urges us to eat more cheese. As for the FDA, it regularly ignores scientific research and public opinion to side with industry. In a move that might have made Louis Pasteur queasy, the agency permits milk producers to dose cows with a dangerous growth hormone (a practice outlawed in Europe and sharply criticized by a US federal appellate court). It also refuses to require labeling of genetically engineered foods despite public demand for such disclosure. As the FDA moves closer to approving the sale of a new genetically modified salmon, this nondisclosure policy could soon make it impossible for consumers to distinguish between a gene-spliced fish and the real thing.

Is It Sustainable?

The animal agriculture system drives production at levels that make this sector, according to recent research by two World Bank scientists, the single greatest human cause of climate change on the planet. That’s right, forget carbon-belching buses or power plants; animal food production now surpasses both the transportation industry and electricity generation as the greatest source of greenhouse gases. Even worse, the system fosters financial incentives that encourage the relentless destruction of land and the routine contamination of air and water. For example, antibiotics and steroids are commonly used to make farm animals grow faster—thus yielding greater profits. (Ath­letes, it turns out, have nothing on cattle when it comes to artificially bulking up.) The widespread use of animal drugs means these chemi­cals show up not only in most of the animal foods that Americans eat but also in a majority of US waterways.

Commentators have proposed a number of alternatives to improve the sustainability of animal food production. Unfortunately, these solutions generally fall short. For example, ecological rotation farm­ing operations, like the well-known Polyface Farm (popularized in Michael Pollan’s bestseller The Omnivore’s Dilemma), represent one interesting approach to animal agriculture. However, a closer look at such farms shows a disappointing truth: they’re both unsustain­able and incapable of serving the demand of a nation like ours. Just addressing the local meat-eating supply of Southern California, where I live, would require thirty-three thousand farms the size of Polyface, a physical and logistical impossibility.

As much as we might like our Dairy Queen and Burger King, the reality is, compared to plant protein, raising animal protein takes up to one hundred times more water, eleven times more fossil fuels, and five times more land. Without dramatic reform, the end game in the conflict between fixed resources and ever-increasing demand is likely to have a group of clear losers—the planet’s inhabitants. According to Will Tuttle, author of The World Peace Diet, “until we are willing and able to make the connections between what we are eating and what was required to get it on our plate, and how it affects us to buy, serve, and eat it, we will be unable to make the connections that will allow us to live wisely and harmoniously on this earth.” Meatonomics only ratchets up the damage by artificially inflating demand and disrupt­ing other market forces. No matter your political stripe, this should bother you. If you believe in free markets, this radical and destructive government interventionism is upsetting. If you prefer regulation, the fact that government hands your tax dollars to large corporate inter­ests is likely aggravating. In meatonomics, there’s something to annoy almost everyone.

But if we are to eat, your inner carnivore may ask, don’t we needthis food production system—despite all its quirks? Sure, we have to eat, but not like this. Americans are rational, thoughtful consumers, and we want to behave in a rational manner. But the evidence shows that artificially low prices and aggressive government messaging encourage us to consume animal foods in unnaturally high quanti­ties. As a nation, Americans consume more meat per person than anywhere else on the planet. Once, we might have celebrated our extreme consumption as evidence of good living. After all, when you hear the phrase eat, drink, and be merry,most people can’t help but picture a few slabs of meat on the table. But today, it’s one of the main reasons we have twice the obesity rate, twice the diabetes rate, and nearly three times the cancer rate as the rest of the world.  American longevity, once among the world’s highest, now ranks fiftieth. Simply put, our heavy consumption of foods high in saturated fat, cholesterol, and other substances linked primarily or uniquely to animal foods has helped make us one of the sickest developed nations on Earth.

The Price We Pay

More than any other microeconomic system in the United States, meatonomics aggressively shifts the costs of producing its goods onto American taxpayers and consumers. The only word for these costs is staggering. The total expenses imposed on society—that is, production costs notpaid by animal food producers—are at least $414 billion. These costs are not reflected in the prices Americans pay at the cash register. Rather, they are exacted in other ways, like higher taxes and health insurance premiums, and decreases in the value of homes and natural resources touched by factory farms.

For every dollar in retail sales of meat, fish, eggs, or dairy, the ani­mal food industry imposes $1.70 of external costs on society. If these external numbers were added to the grocery-store prices of animal foods, they would nearly triple the cost of these items. A gallon of milk would jump from $3.50 to $9, and a store-bought, two-pound package of pork ribs would run $32 instead of $12.

The American animal food industry is not alone. Most other indus­tries distribute their profits to a relatively small group of stakeholders, and corporations commonly externalize costs in the course of gen­erating those profits. But this industry isunique in the unparalleled scope of its destructive swath, the massive costs it imposes on society, and the total quantum of misery it dumps on consumers, taxpayers, workers, farmers, and animals. Consider the favorite pariah industry of many: US tobacco. Over five decades, tobacco companies were shown to have caused—and ultimately were forced to pay—$400 billion in health care costs. By comparison, as we’ll see, the US animal food industry generates more than $600 billion in health care costs every two years and pays virtually none of them. Further, unlike animal agriculture, the tobacco industry causes little ecological harm, and it’s taxed—not subsidized.

Or take another sector we love to hate: Big Oil. Although the oil industry’s environmental impact might rival that of animal agricul­ture, most petroleum products are heavily taxed—unlike animal products. Further, the $10 billion in yearly federal subsidies (including tax breaks) enjoyed by the oil industry is mere pocket change com­pared to the $38 billion heaped each year on the animal food industry. In the race to the absolute bottom, animal agriculture wins, hands down, as the US industry that imposes the highest economic costs on society across the board.

How Did We Get Here?

For many, this [information] may come as a surprise. Most of our beliefs about nutritional needs, consumption levels, and farming and lawmaking practices are based on traditions that have largely melted away—at a pace of change so slow and seductive, we’re barely aware of it. As the comic strip’s Calvin put it, “Day by day, nothing seems to change. But pretty soon, everything’s different.” Consider a few ways that the changing landscape of animal food production has both shaped the growth, and heralded the rise, of meatonomics.

For starters, forget about that bucolic American Gothic picture of the gentleman farmer. Industrial farming operations have largely replaced small farms, and the “pasture spring” and “little calf . . . stand­ing by the mother” that Robert Frost saw on his family farm a century ago are lost artifacts—relics of an obsolete way of life. In the decades since 1950, American farming has undergone a major transforma­tion, and mom-and-pop farms are mostly gone—either acquired by large corporate operations or plowed under for new housing subdivi­sions. For instance, between 1954 and 2007, even as demand for dairy increased by 40 percent, the number of US dairy farms plummeted from 2.9 million to 65,000. We wouldn’t know it from the peaceful, pastoral logos of the dairies and meat packers whose products we con­sume (who doesn’t love a smiling cow on a package?), but today, 99 percent of the farm animals raised in the United States live in steel and concrete factories with no resemblance to a traditional farm.

Then there’s the fact that meat and dairy keep getting cheaper. This development is driven partly by subsidies, partly by efficient methods of factory farming, and partly by the industry’s practice of offloading its costs onto others. But the upshot is the inflation-adjusted retail prices of animal foods have dropped steadily in the past century. Since 1913, in inflation-adjusted dollars, eggs have gotten cheaper by 79 percent, butter by 57 percent, and bacon by 23 percent. Here’s a jaw-dropping stat: the portion of our incomes that Americans spent on meat was 2.4 percent in 1990, yet despite higher consumption levels, only 1.7 percent in 2010. And of course, it’s a basic rule of economics that declines in price lead to increases in demand.

Thus, the last century has also seen a significant increase in ani­mal food consumption and its ugly cousin, obesity. Annual per-capita meat consumption has nearly doubled in the United States over the last century to its current level of 200 pounds per person. Our meat and egg consumption levels are well above USDA recommendations, and this is one reason we’re growing dangerously heavier. Two in three Americans are overweight and one in three is obese.

But it wasn’t always like this. Fifty years ago, only one in eight Americans was obese. The national obesity figure increased by an average of about one-half percentage point per year for the past five decades, moving almost in lockstep with the rise of factory farming and the decline of animal foods’ retail prices. Of course, higher con­sumption of meat and dairy is not the only reason for our nation’s health issues—we also eat more sugary and processed foods than we used to—but as we’ll see, volumes of research show that animal foods are a major contributing factor.

Finally, the steady rise of meatonomics has followed a disturbing, yet rampant political change: corporate influence over lawmaking has risen dramatically in the last half century. Driven largely by the expense of television advertising, the cost to get elected to US office has increased tenfold (in inflation-adjusted dollars) in the last fifty years. This skyrocketing price tag has in turn dramatically boosted the amounts spent to influence lawmakers and the number of lobby­ists peddling influence. (For a graphic example of how lobbying works at this level, check out the 2005 Golden Globe–nominated film Thank You for Smoking.) In the past three decades, as annual spending to influence Congress rose from $100 million to more than $3.5 billion (in inflation-adjusted dollars), lobbyists grew their ranks tenfold.

The animal food industry is just one of many special interests to capitalize on this massive change in spending and influence, but its efforts have been particularly successful. In the past few decades, the industry has convinced lawmakers to pass scores of state and federal laws that protect animal food production in a variety of ways. These include such disturbing examples as the emasculation of dozens of laws that once prohibited cruelty to farm animals and the passage of new prohibitions against food defamation, undercover investigations, food injury lawsuits, and phantom ecoterrorism.

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Published with permission from Conari Press