Beef, Chicken, and Carbon Emissions

There seems to be rising attention paid to the environmental impacts of meat consumption. Some people see plant-based meat alternatives as one way to address this concern, and they question whether it is possible to see a big shift in the types of “meat” consumers buy. Such a shift, in fact, has occurred over the past fifty years - a period during which we’ve observed a remarkable change in meat consumption patterns.

The figure below shows US per-capita consumption (lbs/person/year) of beef and chicken from 1970 to 2020 based on USDA data. On a retail-weight basis, per capita consumption of beef fell from an annual average of 86 lbs/person in the 1970s to 56.7 lbs/person in 2010s (i.e., from 2010 to 2019) - a 34% reduction. At the same time, chicken consumption went from 38.9 lbs in the 1970s to 86.9 lbs in the 2010s - a 123% increase. Total consumption of these two meats has increased from an annual average of 124.8 lbs in the 1970s to 143.5 lbs in the 2010s.

Using the per-capita consumption data (expressed instead on a carcass rather than retail basis), coupled with additional USDA data on yield (lbs produced per animal) over time, one can infer the number of animals each person in the U.S. eats each year on average.

In the 1970s, the average American ate 14.5 chickens/year, a figure that increased to 22.3 chickens by the 2010s. In the 1970s, the average American ate 0.19 cows/year, a figure that fell to only 0.1 cows/year in the 2010s. Stated differently, it took about 5.3 years for the average American to eat one whole cow in the 1970s; at today’s consumption levels, it takes nearly a decade before the average American eats a whole cow.

What is the impact of this consumption pattern change from beef to chicken on one key environmental measure: greenhouse gas (GHG) emissions ?

One UN Food and Agricultural Organization study indicates that there are 5.4 kg of CO2 equivalent gasses emitted for every kg of carcass weight of chicken meat produced. USDA data indicate the average carcass weight of U.S. broilers over the past decade is about 4.53 lbs/bird (or 2.06 kg/bird). This means, each bird is associated with 11.1 kg of C02. Because consumers are now eating 22.3-14.5 = 7.9 more chickens each year than they were in the 1970s, this means they are also emitting 7.9*11.1 = 87.3 kg more CO2 than in the 1970s (assuming the per-head chicken emissions haven’t changed over time).

Has the reduction in beef consumption been enough to offset the increases in carbon emissions from the increased consumption of chicken? According to one study, roughly 22 kg of CO2 are emitted for every kg of carcass weight of beef produced. Cattle carcass weights have averaged about 804.7 lbs/head (or 365.8 kg/head) for the past decade, meaning each cow generates 8,047 kg of CO2 equivalent gasses. Because U.S. consumers are now eating 0.19-0.1 = 0.09 fewer cows each year than in the 1970s, they are emitting 0.09*8047 = 705.6 fewer kg of CO2 equivalent gasses from beef consumption (again, assuming the per-head beef emissions haven’t changed over time). Some of this reduction is because people are consuming less beef (per-capita consumption feel from 116 lbs to 81 lbs on a carcass weight basis), but also because cattle yields have substantially increased from about 617 lbs/cow in the 1970s to 804.7 in the 2010s) - we are getting more beef from each head of cattle.

So, the average American is emitting 87.3 more kg CO2 from extra chicken consumption but has cut 705 kg CO2 from less beef consumption since the 1970s. Looks like a net carbon win. And one that isn’t even close.

One pushback to this point may be that there are more people today than in the 1970s, so per-capita numbers may be misleading. Throughout the 1970s, the US population averaged 215 million, whereas in the 2010s, population averaged 319.6 million. Taking this into consideration, in aggregate, calculations suggest Americans are today consuming about 4 billion more chickens and 8.3 million fewer cattle than in the 1970s. Using the aforementioned per-head emissions implies we are, in aggregate, emitting 44.7 million metric tons (MMT) more CO2 from extra chickens but 67.1 less MMT CO2 from fewer cattle. Thus, on net, we are emitting 22.4 MMT fewer CO2 equivalent gasses from our aggregate beef and chicken consumption today than in the 1970s. Thus, it still appears a net carbon “win” even adjusting for population change.

While we’re at it, the data used in the above calculations can be used to ask a number of counter factional questions.

• What would today’s aggregate GHG emissions from chicken be if we hadn’t increased productivity (or yield) since the 1970s? Answer: 52.7 MMT more CO2.

• What would today’s aggregate GHG emissions from chicken be if population staid at 1970s levels? Answer: 25.9 MMT less CO2.

• What would today’s aggregate GHG emissions from chicken be if per-capita consumption staid at 1970’s levels? Answer: 48.4 MMT less CO2.

Now the same questions for beef.

• What would today’s aggregate GHG emissions from beef be if we hadn’t increased productivity (or yield) since the 1970s? Answer: 78.73 MMT more CO2.

• What would today’s aggregate GHG emissions from beef be if population staid at 1970s levels? Answer: 84.67 MMT less CO2.

• What would today’s aggregate GHG emissions from beef be if per-capita consumption staid at 1970’s levels? Answer: 112.57 MMT more CO2.

To give some sense of scale, the EPA GHG inventory data suggests all U.S. agriculture was responsible for 628 MMT CO2 equivalent emissions in 2019.

All in all, it seems meat consumption patterns have become much more carbon friendly since the 1970s - that’s not a headline one often sees.

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Note: One assumption in all the above calculations is that the CO2 emissions per head for both chicken and beef haven’t changed over time. While these factors have no doubt changed, it seems unlikely that they have changed enough over time to overturn the basic beef/chicken comparisons above, but I highlight it here to note that the magnitudes are uncertain. Moreover, I’ve converted measures to a per-head (rather than per pound produced) metric because it strikes me that GHG impacts primarily depend on the size of the animal inventory, and if we can get more meat from each animal in the same amount of time (say, from improved genetics), that wouldn’t necessarily imply greater GHG emissions. All my calculations are in this spreadsheet if someone wants to check me.

Finally, thanks to Jack Bobo who asked me some questions, which prompted the writing of this post.

Where are people most sensitive to changes in the price of bacon?

Whether trying to understand the impact of taxes, animal welfare regulations, or meat packing plant shutdowns, we need an elasticity of demand for pork. The elasticity of demand tell us how the quantity of pork consumers want to buy changes with the price of pork. Given the importance of such questions, it probably isn’t surprising to learn that there are many studies aiming to measure elasticties of demand. These studies typically focus on THE elasticity of demand for pork - a single aggregate number. However, these aggregate assessments likely mask a great deal of heterogeneity across markets and different products.

In some new research with Glynn Tonsor, done for the National Pork Board, we utilized grocery store scanner data from 51 U.S. retail markets for 6 different pork products to estimate 51*6 = 306 market- and product-specific own-price elasticity estimates. Our data also enables us to observe differences in consumer purchasing and spending patterns across the country.

There are so many interesting results, it’s hard to succinctly summarize. Here are a few highlights.

First, consider variation in bacon purchases across four markets over time. Of the four locations in the figure below, per-capita bacon purchases tend to be highest in Phoenix and lowest in LA (it is worth noting that bacon prices tend to be much higher in LA than Phoenix). The impact of the initial COVID-19 disruptions is also apparent in the data.

There is wide variation in price sensitivity across location and pork product. The figure below summarizes the distribution of price elasticities over the 51 markets for the six pork products

Want to know how your locale ranks in terms of consumption, prices, or elasticity? Check out the full report.

Concentration and Resiliency in the U.S. Meat Supply Chains

That’s the title of a new working paper I’ve co-authored with my Purdue colleague, Meilin Ma. In the wake of the COVID-19 related disruptions to meat packing, I shared my thoughts about resiliency and ran crude simulations to try to understand how resiliency related to market concentration. In this new paper, we incorporate some of these ideas into a formal economic model that we can use to answer a variety of questions about the relationship between industry structure and resiliency. The model also helps us understand some of the price dynamics surrounding the packing plant shutdowns.

Here is the abstract:

“Supply chains for many agricultural products have an hour-glass shape; in between a sizable number of farmers and consumers is a smaller number of processors. The concentrated nature of the meat processing sectors in the United States implies that disruption of the processing capacity of any one plant, from accident, weather, or as recently witnessed – worker illnesses from a pandemic – has the potential to lead to system-wide disruptions. We explore the extent to which a less concentrated meat processing sector would be less vulnerable to the risks of plant shutdowns. We calibrate an economic model to match the actual horizontal structure of the U.S. beef packing sector and conduct counter-factual simulations. With Cournot competition among heterogeneous packing plants, the model determines how industry output and producer and consumer welfare vary with the odds of exogenous plant shutdowns under different horizontal structures of the sector. We find that increasing odds of shutdown results in a widening of the farm-to-retail price spread even as packer profits fall, regardless of the market structure. Results indicate that the extent to which a more diffuse packing performs better in ensuing a given level of output, and thus food security, depends on the exogenous risk of shutdown and the level of output desired; no market structure dominates. These results help illustrate the consequences of policies and industry efforts aimed at increasing the resiliency of the food supply chain, and highlights the fact that there are no easy solutions to improve resiliency by changing market structure. ”

What do farmers think about plant-based meat alternatives?

I’ve written several times over the past couple years about what consumers are thinking about plant- and lab-based meat alternatives. What are farmer’s thoughts? This is not an unreasonable question: all these meat alternatives rely on agricultural inputs, whether it be pea- or soy-protein, or starches for fermentation processes.

My colleagues Jim Mintert and Michael Langemeier, through the Center for Commercial Agriculture at Purdue and with support from the the CME, run a monthly survey of farmers and produce the Ag Economy Barometer, which tracks farmer sentiment about the direction of the farm economy.

They just released results from the February 2021 survey results. They were gracious enough to include a few ad hoc questions I suggested on what farmers are thinking of the emergence of plant-based meat alternatives.

From the release:

“Interest in alternative protein sources has increased markedly over the last year. The February survey included several questions designed to learn more about producers’ perspectives on the possible impact of alternative proteins on U.S. agriculture. Responses suggest ag producers think alternatives to animal protein will make inroads in the total protein marketplace over the next five years. For example, over half (55%) of producers said they expect alternative protein sources to capture up to 10 percent of the combined market for animal and plant-based protein while a much smaller percentage, approximately 15%, said they expect plant-based alternatives to capture 10 percent or more of the total protein market. In a follow-up question, producers were asked what impact they would expect to see on farm income if plant-based alternatives to animal protein capture a relatively large market share (25%) of the total protein market. A majority of producers said they think the impact on farm income arising from alternative protein capturing a 25 percent share of the total protein market will be negative, with approximately four out of ten producers saying they would expect to see farm income decline by 10 percent or more under this scenario.”

That a majority of farmers perceive negative effects of alt-meats on the agricultural economy is consistent with: 1) the fact that some respondents are likely livestock producers, and 2) a recognition that the amount of corn and soy needed to produce alt-meats is lower than the amount needed to produce an equivalent amount of beef, pork, or chicken.

Nonetheless, the emergence of alt-meat alternatives create opportunities for some farmers who may grow inputs for these new products. We added a final question on this topic to the survey, and the results are below. The results show 62% of producers indicating an unwillingness to grow a crop used in production of plant-based alternatives under contract. That strikes me as high and may include a bit of cheap talk. It may also be that the question was worded too vaguely. What are the conditions of the contract? What are the price premiums? Farmer would want to know answers to these questions (and more) before switching to a new crop, and the lack of specificity may explain the low stated unwillingness to crop used in plant-based alternatives under contract.

Market Shares and Substitution Toward Plant Based Meat

In the past, I’ve discussed research we’ve conducted on consumer demand for emerging plant-based meat alternatives vs. traditional meat (e.g., see here or here). Today, I’m happy to link to a new, extensive study on the topic conducted with Glynn Tonsor and Ted Schroeder at Kansas State for the Cattlemen’s Beef Promotion and Research Board.

There are a lot of interesting results stemming from four different experiments and multiple questions asked, but I’ll hit just a few highlights. Firs, along a variety of dimensions, consumers’ perceptions of beef are favorable relative to consumers’ perceptions of plant-based alternatives. For example, here is one series of questions.

Second, if given a pair-wise choice between a beef burger and a Beyond Meat burger at the same price, roughly a quarter of consumers choose the Beyond Meat option. Interestingly, the choice wasn’t much affected by whether we provided nutrition facts panels, ingredient lists, or whether the beef burger was organic, as shown below.

Another experiment, framed in a foodservice environment, explored how choices for beef burgers were affected by a Beyond Meat alternative vs. a Chicken Wrap. Short story: Introducing a Beyond Meat alternative has about the same impact as introducing a Chicken Wrap.

Finally, we conducted some simulated shopping choices (in both food service and grocery framings) to estimate own- and cross-price elasticities of demand for plant-based alternatives and traditional meat options.

As it turns out this sort of analysis is quite timely. On February 2, Impossible announced a 20% price reduction. Here is our estimated demand elasticities for all consumers and segmented by people we classify as regular meat consumers vs. those wo do not regularly consume meat (those who classified their diet as vegetarian, vegan, flexitarian, or other).

As the table above shows, a 1% drop in Impossible Burger’s price would lead to a 0.14% reduction in purchases of Store-Brand ground beef at retail grocery (across all consumers). If we extrapolate that to a 20% decrease, that suggests the recently announced price change will lead to a a 2.8% decline in Store Brand ground beef.

This reduction comes almost entirely from consumers who are not regular meat eaters (cross-price elasticity of +0.26) vs regular meat consumers (cross-price elasticity of +0.05). In fact, within the regular meat consuming segment we would project the price drop in Impossible would result in nearly 3x the impact on Beyond Beef as Store Brand ground beef.

There is much, much more in the report. You can read the whole thing here.