Food Demand Survey (FooDS) - February 2015

The newest release of the Feed Demand Survey (FooDS) is now out.

Compared to last month, we found 8% to 15% jumps in willingness-to-pay (WTP) for both beef products (steak and hamburger) and for deli ham.  There was also a sizable increase (9%) in spending on food away from home relative to last month.  

Following up on all the controversy surrounding last month's question on DNA labeling, we delved into the issue again, but this time in a slightly different way.  First, we asked the question in isolation (on a single page by itself), rather than in a list with other food policy issues (Ben Lillie had argued in a blog post following our last result our result was at least partially due tot he fact that the DNA label issue appeared in a list with other issues).  Secondly, the question was reworded so that it was clear that the label was meant to indicate the presence absence of DNA.  The precise wording was, "Do you support or oppose mandatory labels on foods that would indicate the presence or absence of DNA?"  The choice options were support or oppose (the order of which was randomized across respondents). We found essentially the same result as before, 83.5% of respondents supported DNA labeling (note: sample size is 1,001, sampling error is +/-3%, sample weighted to match the population demographics).   

I also looked at the demographic breakdown of those who answered support vs. oppose.  For those who supported, 43%  had a college degree, 49% were female, 46% were Democrats, and 20% were Republications; for those who opposed, 58% had a college degree, 45% were female, 38% were Democrats, and 28% were Republicans. Education and political party affiliation appear to be partial drivers of support for DNA labeling.

Then, on a following page, we asked a number of true/false questions to gauge people's knowledge about DNA, genetics, etc.

Most respondents, 64.6%, correctly knew it was false that "ordinary tomatoes do not contain genes while genetically modified tomatoes do."  However, a remarkably high number of respondents, 52%, said it was false that "all vegetables contain DNA", and only 58.6% that it was true that "yeast for brewing beer contains living organisms." 

Farm Policy on EconTalk

Great discussion about history and politics surrounding farm policy between Dan Sumner at UC Davis and Russ Roberts on EconTalk.  

I enjoyed this story that Sumner conveyed about midway through

“ And I have to tell you, Russ, my favorite story in all this. Back when I was a kid I was a young professor at North Carolina State. I ran a conference: I brought in luminaries of the agricultural economics world. And I invited some local agricultural commodity people. A man named Northly[?] came—he was the Executive Vice President of the North Carolina Peanut Association. Wonderful guy. He stood up as this conference was ending, and he said, ‘Let me tell you about the peanut program. There’s only two people in America who understand how the peanut program works. It’s my job to keep it that way.’ And I took that statement, one, to be true; and two, the fact that he was willing to say it out loud, to us, was a reflection of how irrelevant he thought we were. Now, I don’t think he was quite right that we were that irrelevant”

Change in the way we talk about obesity

On Saturday night, NBC aired a re-run of an old episode of Saturday Night Live.  It is one of my favorites that I vividly remembering watching as a teenager when it originally aired back in 1990.  

There is one scene where Chris Farley and Patrick Swayze compete for a spot as a Chippendales dancer.  Watching it now, 25 years later, I was struck at how frank some of the discussion surrounding Farley's weight was at the end, and how, today, it would almost certainly cause offense among some. 

Here's some of the back and forth:

“Barney, we all agreed that your dancing was great and your presentation was very sexy. I guess in the end, we all thought Adrian’s body was just much, much better than yours . . . You see it’s just at at Chippendales our dancers have traditionally had that lean, muscular physique, where yours is fat and flabby
...
Adrian: If you’re really serious about going with me, it can only be because his body is so bad.
...
Barney, we considered the possibility that our heavieir females might consider a heavy, heavier man that they could identify with”

It's comedy, and it's funny.  But, now a quarter century later, I suspect many would see it as inappropriate.  It is now routine to see academic articles on stigma and shame associated with obesity.  On the one hand, it seems that it is  a topic that has been the news a lot over the past 25 years, and perhaps that has changed perceptions of the issue.  I'm also reminded of the controversy surrounding Jonathan Chait's piece in New York Magazine on the rise of politically correct speech.  Or, maybe I'm just getting old and  now pick up on greater sensitivities than I did when I was 15.

We've all probably read of the rising toll of obesity, but while it often seems the discussion about the issue has ramped up, maybe some of that is just availability or confirmation bias.  For example, drawing on a couple CDC data sources, we can see that the mean weight of men aged 40-49 has increased by about 13 lbs since 1990.  For women aged 40-49, it's about 16 lbs.  So, yes we're somewhat heavier on average.

I was interested to see that according to google's ngram viewer (which shows the relative prevalence of a word in books over time), there's only been a slight uptick in writing that uses the word "obesity" over time.

That data set ends in 2008.  What about searchers of the word "obesity".  Here's googletrends on that one since 2004 (the earliest start date it will allow).

We seem to have changed how much we're talking about obesity.  I wonder if the nature of the conversation has changed too?

Some Links

Efforts are underway to consolidate food safety regulatory activities into one agency

The appendix of this article (see supplementary information, table 1) in Nature lists 718 studies testing safety of GMOs, along with names of authors, funders of the research, etc.

I talk organics and GMOs on Edmonton morning television

An interesting new housing system for egg laying hens

Effect of New California Laws on Egg Prices

A number of recent articles have reported on California's new egg law.  Here's a summary of what's happening if you're unaware:

“To recap, in 2008 California voters passed Prop 2 which essentially outlawed the use of “battery” cages in egg production in the state. California producers, fearful they would be put out of business by cheaper eggs from out of state, then secured passage of a state law in 2010 that also banned grocery stores from selling eggs that didn’t meet the new California standard. Several state attorney generals challenged the law, on the grounds that it violated the interstate commerce clause, but their initial attempt was unsuccessful.

In any event, all this finally went down on January 1, 2015. ”

Now that the new law is in place, there has been much interest in the effects on California egg prices.  I've seen a large number of articles written on the topic either before the law went into effect on Jan 1 which speculated on the potential change in egg prices or articles reporting on the effects after the fact.  I previously showed a picture taken in a grocery store that one of my students from California sent me suggesting that California consumers were taking note of rising prices.

Most of what I've read in these stories, however, is anecdotal.  They often only indicate what happened to egg prices in California without comparing to prices elsewhere (how to we know there isn't an overall price increase in every location due to some other factor besides the new law?).  As a result it has been difficult to get a sense of whether the increase in egg prices in California is due to the new law or some other factor.

To delve a bit into the issue, I was able to locate some data from the USDA, Agricultural Marketing Service (AMS).  Almost every day since the first of January, the AMS has released the National Shell Egg Index Price Report, which reports egg prices nationally and in California. Because this is a new report in 2015, I had to contact the AMS to get the data going back into 2014. To make things simple, I only focus on the prices of large eggs and the data are reported in cents per dozen.  

Here's a graph of the two price series over time, with the bold black vertical line indicating when the new CA law went into place. 

The first thing to note is that beginning in November, egg prices started increasing in California, but they were also increasing in the rest of the US.  Thus, attributing the November price increase to the new CA law (as many news stories did) seems misplaced.  

However, toward the end of November, and especially after the 1st of the year, the two price series begin to diverge.  After almost a year of moving up and down in tandem, something clearly happened around the first of the year that caused a divergence, and that "something" is almost certainly the new CA law.

One way economists try to sort out the effects of a policy such as this is to calculate a "difference in difference."  The reported price premium for CA eggs may be due to the way the AMS is measuring these data relative to the National price series, making us skeptical of the reported premium at any point in time.  However, we can be more confident in how this premium changes over time, because a "difference in difference" nets out these measurement effects, among other factors.  

Before Jan 1, 2015, the average price difference between the California price series and the National price series was 17.54 cents/dozen.  After Jan 1, the California premium over National prices increased 10 fold to 175.62 cents/dozen.  Thus, as of the date of this writing, it appears the new CA law has caused a 175.62-17.54 = 158.08 cent/dozen increase in the price of eggs in CA.  Given that the average price of large eggs in California in 2014 was 131.05 cent/dozen, we can thus say that the new law caused a (158.08/131.05)*100 = 120.6% increase in the price of California eggs.  

Now, as we can see from the figure above, the price series appears to be coming back together at the beginning of February, so we don't yet know how much of this price increase is due to a temporary shock (partially resulting from CA producers reducing flock size) and how much is a long-term price increase due to increased marginal costs of producing eggs.  The only way to answer that question is to wait and see what happens to egg prices.