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Excess Supply of Cage Free Eggs?

Many of the cage-free egg purchase pledges have implementation dates around 2025, which was thought to be the minimum amount of time required for the industry to convert from more than 90 percent cage-housed hens to being predominantly cage free. Unfortunately, many of the retail store purchase pledges don’t contain intermediate benchmarks, and they have provisions for availability and affordability of eggs. Couple this with many consumers’ reluctance to pay the premium for cage-free eggs, and we have the current confusion in the marketplace where surplus cage-free eggs are being sold to breakers at substantial losses for egg producers.

That's from this article by Austin Alonzo and Terrence O'Keefe. 

At the Fork

A while back, I was contacted by some folks asking if I would agree to be interviewed for a new documentary about livestock production and animal welfare.  I was a bit skeptical and discussion with some of the producers didn't allay my concerns.  I wondered: was I being set up to be the stooge in a Daily Show type interview?  Would my words be taken out of context? There is certainly precedent for these sorts of shenanigans in documentaries, even by well known journalists.  Probably the only thing that kept me talking was the knowledge that the documentary was being made by John Papola, who along with Russ Roberts created the popular Keynes-Hayek rap videos.  

Long story short, I ultimately agreed to be interviewed, and about 10 seconds of my four hour interview can now be seen on screens across the country.  The resulting documentary, At the Fork, was even shown in theaters in Oklahoma  City and Tulsa a week or so ago.

I suspect some of my friends in the livestock industries will find things not to like about the film.  This piece in the National Hog Farmer, for example, questions why some large-scale commercial hog farmers agreed to be interviewed and bristles that the film was financially supported by HSUS and urges viewers at the end to eat less meat.  For my part, I wish more of the questions I was asked about the economics of livestock production and animal welfare made the film - most of the snippets of me contained brief explanations of different production systems.  

But, when it's all said and done, I think Papola did an admirable job trying to get an objective an honest picture of modern animal agriculture.  As I encouraged the producers to do, they actually went and talked to large-scale hog and poultry producers, asked why they did things the way they did, listened, and didn't put them in dim lighting with ominous music.  In fact, the only group who looked like they had something to hide is one large feedlot who wouldn't let the filmmakers on the property.  From my perspective, the only way to counter the argument that no one would eat meat if slaughterhouses and production facilities had glass walls, is to directly challenge the premise and be more transparent.   

Sure, the filmmakers didn't hit every nuance and industry talking point about gestation and farrowing crates or about improved resource use and carbon impacts, but this is not an industry film.  Imagine walking up to a stranger on the streets of New York City, Chicago, or Los Angeles and saying: "what do you think about modern livestock agriculture?"  or "here's a camera, go make a film about farm animal welfare in America."  What do you think you'd get?  From the livestock industry's perspective, I'd say they got about the best they could hope for in At the Fork.  

One other positive note.  So many food and agricultural documentaries are filled with anti-market, anti-capitalist undertones (or in many cases overtones).  Papola is a libertarian and you won't find that sort of sentiment in the film.  His is a market-based message: he's going to try to convince you to buy different types of animal products.  I spent a lot of time talking with him about whether government policies were to blame for consolidation in the food sector in general and large confinement operations in animal agriculture in particular.  By and large, I told him I didn't think there was good evidence for that line of argument.  I argued that it was predominately market forces driving these outcomes (none of this made the film).  I'm sure he could have found someone else to say otherwise to fuel a particular narrative, but he didn't and I take that as a sign that he was truly trying to learn and not just push an agenda.  

Enough of my thoughts.  Watch the film and decide for yourself.

Millennials' Food Values

I've given a couple presentations recently on food trends, and in each instance I was asked whether the so-called Millennial generation thinks differently about food issues than older generations.  I haven't spent a lot of time delving into this question because a lot of the willingness-to-pay research I've been involved with over the years suggests demographics don't tend to explain a lot of the variation in willingness-to-pay.

But, given the interest in the subject, I thought I'd take a quick look at some of the data from the monthly Food Demand Survey (FooDS) I've been running for over three years now.  In particular, I pulled the data we ask on so-called "food values."  The question shows respondents 12 issues (randomly ordered across surveys) and asks respondents which are most and least important when buying food.   Respondents have to click with their mouse and drag four (and only four) items in the “most important” box and then do the same for the “least important” box. 

A scale of importance is created by calculating the proportion of times (across the entire
sample) a food value appeared in the most important box minus the proportion of times it
appeared in the least important box. Thus, the range of possible values for a food value is from -1 to +1, where a higher number implies more importance (a +1 would mean the particular food value was placed in the most important box by 100% of respondents). This is a zero-sum scale, and it only reveals relative importance (e.g., how importance taste is compared to price) not overall importance.   

Ok, so here's a graphical illustration of the food values by age group (I've pulled the data over time, so each age group has several thousand observations, yielding margins of error of around +/- 0.025 importance points).

Except for the oldest group, there is agreement in ranking at the top: Taste>Safety>Price.  In the middle-range of importance, there is far less agreement.  Both the 18-24 year old group and the 25-34 year old group could be considered Millennials according to most definitions I've seen.  The Millennials place less relative importance on nutrition than the 55 and older crowd.  However, the top four issues (taste, safety, price, and nutrition) are way more important than the other issues regardless of the generation under consideration.

The Millennials place less importance on appearance but more relative importance on naturalness, animal welfare, convenience and environment than do older generations, particularly the 65 and older group, which compared to the other age groups, places the lowest importance on naturalness, animal welfare, and environment.  There is a big divide when it comes to the importance of origin: the 65 and older group places quite a bit more importance on origin than do people who are 24 years and younger.  

The biggest gap is for origin (there is a 0.30 spread on the -1 to +1 scale) between the youngest Millennials and the oldest group.  The next biggest gap is for naturalness (there is a 0.22 spread on the importance scale) between the oldest group and the 25-34 year old Millennials.  The most agreement is for "fairness."

It might also be instructive to compare all this along another demographic category: gender (margin of error here is +/- 0.014).  

Women place more relative importance on safety, animal welfare, and naturalness than men. Men place more importance on convenience and novelty than women.  The biggest gap is for animal welfare (a 0.19 point difference on the -1 to +1 scale) and then convenience (a 0.16 difference).  

Enriched colonies

A couple months ago, I discussed the book chapter I wrote on a different type of hen housing system: the enriched colony . Today, the Wall Street Journal ran a piece I wrote about this hen housing system and the costs of alternative housing systems.   

A few snippets:

A 2014 California voter initiative and subsequent state legislation ultimately led to a ban on sales of battery-cage eggs in the Golden State. Because eggs have few close substitutes, demand tends to be relatively insensitive to changes in price. When demand is inelastic, a small-percentage change in the quantity supplied causes an even greater increase in price.

Comparing the prices of eggs sold in California before and after the law with the prices of eggs sold in other states reveals that the legislation increased egg prices for Californians by at least 22%—or about 75 cents for a dozen. A related analysis using Agriculture Department wholesale price data indicates the California law increased prices between 33% and 70%. Poor Americans, who spend a larger share of their incomes on food, are disproportionately affected.

and

Rather than getting rid of the cages entirely, one answer is to use a relatively new type of housing: the enriched-colony cage system. Unlike the barren environment in the battery cages, the much larger, enriched-colonies have nesting areas for egg laying and a matted area that allows the hens to exercise their natural urge to scratch. Also available are perches that allow the hens to get up off the wire floor.

An enriched colony is not a Ritz-Carlton, and some animal advocates think the systems do not go far enough. However, they represent an innovative compromise that attempts to balance cost and the hens’ well-being.

Lab grown meat

Quartz.com just ran a piece taken from one of the chapters of Unnaturally Delicious on lab grown meat.  Here's the start:

On Aug. 5, 2013, Mark Post went out to grab a hamburger. This was no drive-through Big Mac. Rather, Post bit into his $325,000 burger in front of an invitation-only crowd of journalists, chefs, and food enthusiasts in the heart of London.

The strangest part wasn’t the cost or the crowd but the meat. Post, a professor of vascular physiology at Maastricht University in the Netherlands, grew the burger himself. Not from a cow on his farm, mind you, but from a bovine stem-cell in a petri dish in his lab. Post’s research, partially funded by Sergey Brin, one of Google’s co-founders, has the potential to upend conventional wisdom on the environmental, animal welfare, and health impacts of meat eating.

Ironically enough, I first met Post at a meeting of some of the world’s largest hog producers.

The Quartz editors left out what I think is one of the most important points made in the chapter about relative inefficiencies of meat eating.  So, for sake of completeness, here's the segment they left out (long time readers will recognize that I've touch one this theme in previous blog posts).

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More broadly, this line of argument – that meat production (inside the lab or out) is “wasteful” because it requires feed inputs that humans might use – is misplaced.  To see this, it is useful to consider a thought experiment – an imaginary story that might help us get to the bottom of things. 

Imagine a biologist on an excursion to the Amazon looking for new plant species.  She comes across a new grass she’s never before seen, and brings it back home to her lab.  She finds that the grass grows exceedingly well in greenhouses with the right fertilizer and soil, and she immediately moves to field trials.  She also notices that the grass produces a seed that is durable, storable, and extraordinarily calorie dense.  The scientist immediately recognizes the potential for the newly discovered plant to meet the dietary demands of a growing world population.

But, there is a problem.  Lab analysis reveals that the seeds are, alas, toxic to humans.  Despite the set-back, the scientist doesn’t give up.  She toils away year after year until she creates a machine that can convert the seeds into a food that is not only safe for humans to consume but that is incredibly delicious to eat.  There are a few downsides.  For every five calories that go into the machine, only one comes out.  Plus, the machine uses water, runs on electricity, burns fossil fuels, and creates carbon emissions. 

Should the scientist be condemned for her work?  Or, hailed as an ingenious hero for finding a plant that can inexpensively produce calories, and then creating a machine that can turn those calories into something people really want to eat?  Maybe another way to think about it is to ask whether the scientist’s new food can - despite its inefficiencies (which will make the price higher than it otherwise would be) - compete against other foods in the marketplace?  Are consumers willing to pay the higher price for this new food? 

Now, let’s call the new grass corn and the new machine cow. 

            This thought experiment is useful in thinking about the argument that corn is “wasted” in the process of feeding animals (or growing lab grown meat).  Yet, the idea that animal food is “wasted” is a common view.  For example, one set of authors in the journal Science wrote,

“Although crops used for animal feed ultimately produce human food in the form of meat and dairy products, they do so with a substantial loss of caloric efficiency. If current crop production used for animal feed and other nonfood uses (including biofuels) were targeted for direct consumption, ~70% more calories would become available, potentially providing enough calories to meet the basic needs of an additional 4 billion people. The human-edible crop calories that do not end up in the food system are referred to as the ‘diet gap.’”

The argument isn’t as convincing as it might first appear.  Few people really want to eat the calories that directly come from corn or other common animal feeds like soybeans.  Unlike my hypothetical example, corn is not toxic to humans (although some of the grasses cows eat really are inedible to humans), but most people don’t want to field corn.    

So if we don’t want to directly eat the stuff, why do we grow so much corn and soy?  They are incredibly efficient producers of calories and protein.  Stated differently, these crops (or grasses if you will) allow us to produce an inexpensive, bountiful supply of calories in a form that is storable and easily transported. 

The assumption seems to either be that the “diet gap” will be solved by convincing people to eat the calories in corn and soy directly, or that there are other tasty crops that can be widely grown instead of corn and soy which can produce calories as efficiently as corn and soy.  Aside from maybe rice or wheat (which also require some processing to become edible), the second assumption is almost certainly false.  Looking at current consumption patterns, we should also be skeptical that large swaths of people will want to voluntarily consume substantial calories directly from corn or soy.

What we typically do is take our relatively un-tasty corn and soy, and plug them into our machine (the cow or pig or chicken, or in Post’s case the Petri dish) to get a form of food we want to eat.  Yes, it seems inefficient on the surface of it, but the key is to realize that the original calories from corn and soy were not in a form most humans find desirable.  As far as the human pallet is concerned, not all calories are created equal; we care a great deal about the form in which the calories are delivered to us.

The grass-machine analogy also helps make clear that it is probably a mistake to compare the calorie and carbon footprint of corn directly with the cow.  Only a small fraction of the world’s caloric consumption comes from directly consuming the raw corn or soybean seeds.  It takes energy to convert these seeds into an edible form – either through food processing or through animal feeding.  So, what we want to compare is beef with other processed foods.  Otherwise we’re comparing apples and oranges (or in this case, corn and beef).

 The more relevant question in this case is whether lab grown meat uses more or less corn, and creates more or less environmental problems, than does animal grown meat.