A couple months ago, I was asked to give a talk at a TEDx event put on at Purdue University. The video is finally available online. I talked about the evolution of animal agriculture and the impacts on food prices and animal welfare, and I ended with my proposal for an animal welfare market, which I've previously written about here and here.
That's the title of a new report put out by the Council for Agricultural Science and Technology. Nicole Widmar and I helped contribute to the section on economics.
A lot is covered in a mere 40 pages. The main section heads include:
- Roles of Science and Ethics in Evaluating, Understanding, and Improving Animal Welfare
- Economics and Markets for Animal Welfare
- Regulation of Animal Welfare
- Assessment of Welfare
- Advances in Animal Welfare and Outstanding Challenges
- Emerging Topics
- Future Neets
It’s an honor to join such a prestigious group of scientists in pulling together this multidisciplinary report.
I recently ran across a claim I've heard many times in the past about animal protein production and animal welfare. It goes something like the following: happier animals put on weight more efficiently because they aren't stressed by disease and discomfort. So, a producer can't make money unless they takes care of their animals, meaning the profit motive and improving animal welfare are aligned.
There is an element of truth to this line of reasoning. But, it's not the whole story. I discussed this issue in a paper entitled Animal Welfare Economics published back in 2011 with Bailey Norwood.
Here is a key paragraph describing the problem:
We then walk through a numerical example showing that even when animal welfare and animal output are very highly correlated, a producer will tend to stock hens more hens than would be given by the stocking density that would maximize animal welfare. The main insight is that the producer aims to maximize the profit from the BARN not the ANIMAL.
The figure below shows the particular example we walk through. The rest of the details are in the paper.
Many food manufacturers and retailers have made pledges to go "cage free." In fact, if all the pledges are maintained, about 75% of the entire egg laying flock will have to be converted to cage free by the year 2025, as the graph below suggests.
Is there sufficient consumer demand to support this level of commitment (particularly when one acknowledges that, according to USDA data, cage free eggs are currently selling at about a $1/dozen (or 68%) premium to conventional)?
I recently completed a study for the Food Marketing Institute, Animal Agriculture Alliance, and the Foundation for Food and Agricultural Research on the market potential for cage free eggs to help provide some insights into these issues.
The study was conducted with more than 2,000 consumers. The core of the study involved people making a series of simulated retail shopping choices like the one below.
Answers to these questions allow us to infer consumer willingness-to-pay, market shares, and more. In fact, if you want to run your own market share simulations, I created this handy downloadable spreadsheet.
The main finding is the following:
Here are a couple key graphs:
That's the title of a paper by Bailey Norwood, Glynn Tonsor, and myself that was just released by the journal, Applied Economic Perspectives and Policy.
We start the paper as follows:
A summary of the study and findings: