That's the question asked in a great video by Evan Fraser at the University of Guelph. I don't agree with all of this solutions but he provides some good food for thought on an important question that often gets overlooked in food discussions.
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Does 1 lb = 3500kcal?
Researchers studying the effect of various food policies on changes in weight often use the simple saying that a change of 3500 kcal via diet or exercise results in a 1 lb change in weight (it is a claim we repeated in our paper in the Journal of Health Economics, which studied the efficacy of fat taxes).
I ran across this interesting post by a Mike Gibney, a public health and nutrition expert, who points out some problems with the 1 lb = 3500 kcal calculation. Here's what he has to say:
Firstly, a 1lb weight loss will not be 100% fat but will also involve the loss of some lean tissue (muscle and protein elements of adipose tissue and its metabolism). Whereas fat has an energy value of 9 kcal/g, lean tissue has a value of 4 kcal/g. The exact ratio of the loss of lean and fat in weight reduction depends largely on the level of fat in the body at the outset.
and:
The second criticism of this rule is that it ignores time. If you shed 3,500kcal per week every week, that would differ from a deficit of 3,500 kcal per month every month. The former leads to a daily deficit of 500 kcal while the latter is just 117 kcal.
and:
Thirdly, the 3,500 kcal rule assumes complete linearity – in other words the rule equally applies, pound after pound of weight loss. We saw above that progressive weight loss will progressively increase the % of that weight loss as lean tissue but more importantly, the 3,500kcal rule ignores a major adaptation in energy expenditure
and on this topic, he concludes:
Clearly, the continued use of the 3,500 kcal rule in predicting weight loss should cease and the recommendations of the consensus statement of the ASN and ILSI should apply: “Every permanent 10 kcal change in energy intake per day will lead to an eventual weight change of 1lb when the body reaches a new steady state. It will take nearly a year to achieve 50% and about 3 years to achieve 95%”.
Finally, I'll point out the importance of taking into account these kinds of issues when calculating the effects of fat taxes. He says that according to one study, a 20% soda tax would lead to;
a reduction of energy intake of 34-47 kcal per day for adults. Using the 3,500 kcal rule, an average weight loss of 1.60kg would be predicted for year 1 rising to 8kg in year 5 and to 16kg in year 10. However, when the dynamic mathematical model is used, the corresponding figures for years 1, 5 and 10 are, respectively, 0.97, 1.78 and 1.84 kg loss. The % of US citizens that are over-weight is predicted to fall from existing levels of 66.9% over-weight to 51.5% over-weight in 5 years time using the 3,500 kcal rate but using the dynamic mathematical model, the 5-year figure for the over-weight population in the US would be just 62.3%.
Contracting
Parke Wilde at Tufts also weighs in with some interesting thoughts on the Washington monthly piece on contracting - which I commented on earlier. He makes a good point about transparency.
Contracting and Market Power in Meat Production
Over at Twitter, I read the following from @michaelpollan:
Obama's aborted effort to restore fairness to ag markets: Best piece of ag journalism in years: don't miss this one. http://bit.ly/THIo7u
I had to check it out. The link leads to Washington Monthly Magazine where there is a long and well written piece by Lina Khan on fight over new proposed USDA-GIPSA rules that were introduced a couple years ago. This is old news to a lot of us in the ag community as many of us had friends or colleagues working with GIPSA or DOJ or knew farmers or industry groups that staked out positions on one side of the issue or the other (for some perspective, here is a piece in BEEF Magazine written in the heat of the battle). But, apparently the story seemed to have gone unnoticed by a lot of the mainstream press.
Although many issues were raised in the Washington Monthly piece, Khan’s key complaint seems to center on the production contracts signed by poultry (and to a lesser extent hog) producers. At issue is the fact that many farmers have to make major capital investments in buildings, feed, etc. to raise poultry for integrators, who offer only short-term contracts. The trouble comes when a farmer takes out a loan and spends $1 million or more on a barn, with payments amortized over 10+ years. Yet, the farmer only get a short term contract from Tyson’s, Pilgrim’s Pride, etc. that is far shorter than the payback period for the barn. Thus, the farmer finds themselves at the mercy of the large poultry processors.
On the surface of it, the set-up seems entirely unfair, cruel, and manipulative. But, I wonder why the farmers would enter in such agreements in the first place if they’re so bad? The terms of the contract aren’t secret. If the processors are reneging on terms of the contract or being secretive in payment schemes, why do business with people like this? That said, one important thing to realize is that these kinds of contracts aren’t at all unique to agriculture. I’ll give a couple personal examples.
When I took my first job out of grad school, I bought a house by taking out an adjustable rate mortgage. In retrospect (and given the subsequent housing market crash), this was a really stupid decision. Still, I had a short-term contract for a job and yet took out a large mortgaged amortized over 30 years with the rate re-setting after five years. Was I being manipulated by the University? The bank? No, I made this decision on my own. Let’s dig a little deeper. Even though I had a tenure-track job, the University only offered me a 1 year contract – to be renewed at the end of the year if my progress was satisfactory and budget conditions were good. Based on this 1-year contract, I undertook huge costs by packing up my family, moving half-way across the US, took out a long-term mortgage, and made many social investments in the community. My point is that all of us routinely make long-term investments even when there are a lot of short-term risks that threaten our ability to meet our long-term obligations. This is not something that is insidiously unique to poultry and hog farming.
None of this is to say that the poultry farmers aren’t getting the raw end of the stick. That’s why it’s useful to turn to the academic research on the effects of these contracts. The Washington Monthly is long on anecdote and short on citing research from key scholars in the area.
So, I’ll turn to the very research commissioned by GIPSA – the agency raising the new rules. I should note that I was an external reviewer on one of the chapters of this report. The entire report is here. Looking at the report on hogs, the authors find some evidence of market power exhibited by hog processors and more contracting does seem to relate to lower cash pork prices. However, contracting is also associated with an increase in pork quality. Moreover, contracts help producers reduce risk, with more risk averse producers opting for contracting. And, most importantly, the simulations show that a forced reduction of contracting would lead to economic losses to both farmers and consumers.
By the way, here are some relevant academic papers on concentration in the meat sector.
This paper by Azzam and Schroeter shows that increasing concentration in beef packing has led to increased market power. However, larger size has conveyed efficiency gains that way more than offset any adverse effects caused by anti-competitive behavior.
My colleagues at Oklahoma State, Zhang and Brorsen, showed that market power issues can be studied using a new method called agent-based modeling (where one creates an economy of programmed agents, who bargain and learn based on prior gains/losses). They show less market power in cattle procurement than observed in papers that had make a number of assumptions to utilize their cattle data.
Here is a really nice experimental paper by Wu and Roe that tackles one of the main issues raised in the Washington Monthly article. Namely, they compare fixed-performance contracts to tournament contracts. As they show, there is no unambiguous ranking of which type of contract is better from the perspective of the producer and packer. It depends on the relative size of the uncertainty associated with individual famer performance to the size of the uncertainty associated with issues that affect the whole industry.
Finally, in his AAEA presidential address this year, Richard Sexton from UC Davis presented a provocative paper (which I can’t seem to find online yet – but it will be published in the AJAE within the year). In it, he argued that agricultural industries that appear to have all the hallmark signs of market power may in fact be playing a different game altogether than the one assumed in many of our industrial organization models. In particular (and if I remember correctly), the business model requires large processors need to operate a near full capacity, which encourages contracting, packer-ownership, and other activities - not to pursue market power per se but rather to keep their through-put costs to a minimum. If I’ve misinterpreted Sexton’s model, feel free to let me know!
Greg Gutfeld on the Food Police
Greg Gutfeld at his hilarious and satirical best . . .
My favorite lines:
The LA City Council just adopted a resolution for meatless Mondays. This is while around most of this awful brutal world they have meatless weeks and months. They'd be happier with 'please don't let me starve Mondays.'
and
How hilarious is it that the left accuses the right of invading their bedrooms just as they climb onto your plate.
and
This is Solindra for your belly which is why I feel like throwing up.