Country of Origin Labeling

The WTO recently ruled against the US in the latest dispute over mandatory country of origin labeling (MCOOL).  Their latest ruling cites work I've conducted with Glynn Tosnor, Ted Schroeder, and Mykel Taylor at Kansas State, among others (not necessarily in an uncritical light).

In any event, I was skeptical of the way the US chose to respond to the original finding that they were out of compliance with the WTO, and the latest finding seems to only reinforce those views.

Darren Hudson had a few thoughts on the issue, with which I largely agree: 

“Overall, Lusk and Anderson found that modest increases in total beef demand (2-3%) would offset any producer costs [Lusk note: subsequent research by Taylor and Tonsor have found no demand response to MCOOL]. But are we focused too myopically on U.S. beef/meat? If we step back and truly think about consumers and the functioning of markets, we have a highly integrated North American livestock complex. Does it help the consumer more to be able to identify which cattle are born in the U.S., or to have an efficient, lower cost movement of livestock to production and processing areas with comparative advantage to do those functions? That includes things like harmonized health and safety inspections and transport rules. Does COOL put a wedge between us and our North American partners so that we do not get those benefits simply for the possible benefit that someone out there would buy a rib-eye steak over another because it was born in the U.S.

The COOL ruling gives us a moment to step back and take stock of what is really important in this argument. I know there are those that value the information provided by the label, and I know there are those that are harmed by it. But we need to think big, strategically, and long-term if we are to remain competitive globally.”

Who are the vegetarians?

One of the challenges researchers face in trying to learn about the characteristics of vegetarians is that there are so few of them.  I've seen estimates that put the percentage of vegetarians in the US population as high as 13%, but most estimates are closer to 5%.  That means that if one does a survey that has 1,000 respondents (which is a pretty typical sample size for pollsters), you'll only have about 50 vegetarians in the sample - hardly a large enough sample size to say anything meaningful.

We've been running the Food Demand Survey (FooDS) for 19 months now, and each monthly survey has over 1,000 respondents.  I took the first years' data (from July 2013 to July 2015), which consists of responses from over 12,000 individuals.  This sample is potentially large enough to begin to make some more comprehensive statements about how vegetarians might differ from meat eaters in the US.

Applying weights to the sample that force the sample to match the population in terms of age, gender, region of residence, etc., we find that 4.2% of respondents say "yes" to the following question: "Are you a vegetarian or a vegan?", which means that 95.8% say "no".  

There is some sampling variability from month-to-month, but overall, the trend in the percentage of respondents declaring vegetarian/vegan status has remained relatively constant, and if anything, has trended slightly downward over time.

So, how do self-declared vegetarians/vegans differ from meat eaters?  The following table shows differences/similarities in socio-economic and demographic characteristics.

Some of the biggest differences appear for age, race, overweight status, and politics.  Vegetarians tend to be younger, less white, skinnier, and more liberal than meat eaters.  Two unexpected results are that vegetarians indicate a much higher rate of food stamp participation (which is a bit surprising since the share of households with >$100K in income is higher for vegetarians than meat eaters) and a much, much higher rate of food-borne illness.  

In our survey, we also measure respondents' "food values" (for detail on the approach, see this academic paper we published).  This approach requires people to make trade-offs (they cannot say all issues are most important).  Respondents are shown a set of 12 issues and are asked to place 4 (and only 4) of them in a box indicating they are the most important issues when buying food, and to also place 4 (and only 4) issues in a box indicating they are the least important issues when buying food.  We measure relative importance by subtracting the share of times an item appears in the least important box from the share of times it appears in the most important box.  Thus, relative importance is on a scale of +1 to -1, and average scores across all 12 items must to sum to zero.  

Meat eaters tend to rate taste and price as relatively more important food values than vegetarians.  Vegetarians tend to rate animal welfare and the environment as more important food values than meat eaters.  Even still, vegetarians rate nutrition, taste, price, and safety as more important food values than animal welfare or the environment.  

The survey also shows people a list of 16 issues and respondents indicate how concerned they are about each issue (1=very unconcerned to 5=very concerned).  As the table below shows, vegetarians are more concerned about all issues than are meat eaters, even an issue like GMOs which is (at present) primarily a plant issue.  The difference in level of concern between vegetarians and meat eaters is particularly large for gestation crates, battery cages, and farm animal welfare.  

Given some previous discussion on the economics of Meatless Monday, I ran some statistical models to determine whether vegetarians tend to spend more or less on food than meat eaters.  

Without controlling for any differences in income, age, etc. that were found in the initial table above, I do not find any statistically significant differences in spending patterns.  Meat eaters report spending about $94/week on food eaten at home and vegetarians report spending about $3 less (a difference that isn't statistically significant); meat eaters report spending about $46/week on food eaten away from home (e.g., at restaurants) and vegetarians spend about $9.80 more (a difference that isn't statistically significant).  Even after I control for differences in income, age, etc., I do not find any significant differences in food expenditures between vegetarians and meat eaters.  The biggest determinants of food spending is income (high income individuals (>$100K in income) spend $35/week more away from home than low income (<$40K in income)) and household size (larger households spend more).  Younger people spend about the same as the older on food a home, but spend more eating out than do the old.  

Economics of Meatless Monday

I ran across this article published last week by Katey Troutman entitled the Economics of Meatless Monday, which cited some research by Bailey Norwood and me on vegetarianism.  

The article makes a number of good points, but also some that are a bit off base.  After discussing per-capita beef consumption in US, the author writes:

“New trends in consumption, however, suggest that things might (slowly) be changing; per capita consumption of meat in the U.S. has fallen in recent years, though we still consume more meat than either our parents or grandparents did, according to The Huffington Post.

Americans are choosing to eat less meat, or in some cases, turning to an entirely vegetarian diet, for a number of reasons. Animal welfare activists champion vegetarianism as a way of boycotting factory farming and animal cruelty, while environmentalists point out the environmental benefits of forgoing meat. Still other Americans belong to religious traditions which either forbid or look favorably upon vegetarianism, particularly those which originated in ancient India, such as Buddhism, Hinduism, and Jainism. Yet worldwide many people are vegetarian for an entirely different, often overlooked reason: economics.”

The author, however, never discusses the the biggest economic reason why per-capita consumption of meat is down.  Is he supply-side not the demand-side.  As I've previously discussed, cattle inventories are at the lowest levels they've at been in decades, largely because of drought and prior high feed prices, resulting in substantially higher beef price.  To put it plainly: consumers are eating less beef because there is less beef being produced.  The fact that prices have risen dramatically means many consumers still want the now scarcer beef and are bidding up the price for available supplies.

I don't see much evidence of a rapid rise in vegetarianism.  For over a year and a half, we've conducted a monthly survey of US consumers as a part of the Food Demand Survey (FooDS).  Self-declared vegetarians have been at about 4-5% of the sample since it began (and this is probably an overstatement given other research suggesting people "over-declare" vegetarian status) with no evidence of a trend.  Unlike the claim in the article that vegetarianism in general and meatless Monday in particular will save you money, my analysis of the FooDS data shows that self-declared vegetarians spend the same amount of money on food at home and on food away from home as do meat-eaters.  

The author also writes:

“Jayson Lusk and Bailey Norwood, perhaps the first researchers to study the economics of vegetarianism, concur with advocates of eating less meat. In their 2009 study they found that “it is significantly more expensive to produce a pound of meat (or milk) than a pound of commodity crops.””

I suppose it's nice to be pointed out for being one of the first to tackle a subject (the published paper is here; there were some mistakes in the published paper that are corrected in this document).  The key word in the above quote, however, is "commodity crops."  As I've noted in the past, people generally don't like to eat the commodity crops directly, and if you look at the cost of non-commodity crops (for example, see this USDA study), they can be more expensive on a per-calorie or per-gram-of-protein basis (think about the cost of lettuce on a $/kcal basis).  Finally as we argue in our published paper, economics is about more than just cost, it also involves value, and most Americans are willing to pay quite a bit to have meat in their diet.  

Buffalo extermination - environmental catastrophe or savior?

Given my Wall Street Journal article earlier this week, I've received a large number of questions and comment about beef cattle production and the environment.  One comment on the piece in the WSJ made an observation that had never occurred to me.

One of the big concerns with beef production is methane emissions.  Methane is a more potent greenhouse gas than carbon.  Cattle are ruminants, and their digestion produces methane (which is released not from the back-end of the cow as is typically asserted but rather the front-end).  

In any event, it seems a common presumption of many who are worried about this issue is that if we got rid of all the beef cattle in the US (or at least drastically reduced their numbers), that would be a great thing because we could significantly cut greenhouse gas emissions and help curb climate change.

In fact, we did something very much like that in the US in the mid to late 1800s, and it is almost universally considered a tragedy.

According to some environmental groups, there was once more than 20 million bison roaming the Great Plains.  This number may not be far fetched.  According to one academic paper, the bison carrying capacity of the Great Plains in 1860 was estimated between 13.78 to 20.67 million bison.   According to EPA calculations, American bison generate as much or more methane as do beef cattle on a per-head basis (compare table A-184 to A-187).  

In 1990, there were only about 50,000 head of bison in the US.  Today there are less than 200,000.  Thus, there has been a 100 fold reduction in bison numbers since the mid 1800s.

Were these bison causing climate change back in the 1800s?  Is it a great victory for the environment that they were almost eradicated?    

Logically consistency would seem to dictate that we think about the methane emissions of the ~20 million American bison in the 1800s the same way we think about the methane emissions of the ~29 million beef cattle in the US today.   I suspect the total amount of methane emissions from 1860s bison population and 2014 US beef cattle population are roughly similar (according to the EPA, feedlot beef cattle have much lower per-head methane emissions than bison - about half as much).  [addendum: a reader subsequently emailed me and correctly pointed out that, including dairy cattle, there are actually more than 90 million cattle in the US today - a figure roughly 3 to 4 times more than the number of bison existing in the 1800s]

So, bison depopulation - environmental boon or ecological travesty?  Neither?  Both?

Interview with Stuart Varney on FBN

Yesterday I had the pleasure of speaking with Stuart Varney on his show Varney & Co on the Fox Business Network.  Here's the segment.