On the HBO show Last Week Tonight, comedian John Oliver (formerly with the Daily Show on Comedy Central) weights in on the issue of contract poultry farming. His piece is a take-off of the themes in Christopher Leonard's book, The Meat Racket (which I critically reviewed here).
Here's the episode, which already seems to be garnering quite a bit of attention.
A couple days ago, the Wall Street Journal ran a story that started as follows
“Retail-sales figures released by the U.S. Commerce Department garnered considerable attention last month when news reports suggested they showed Americans spent more money dining out than buying groceries for the first time ever.
Some observers jumped from there and attributed the shift to the growing clout of millennials, saying they prefer breaking bread with friends at restaurants, while sad-sack baby boomers who didn’t save enough for retirement are stuck cooking at home.
But as it turns out, reports on the decline of home cooking were half baked. They demonstrate, once again, that it is important to understand how the government compiles statistics to avoid jumping to conclusions the figures don’t support.”
I agree.
As the story points out, the government's data ignores sales from some major grocery establishments like Wal-Mart.
This is an issue we've been tracking in the Food Demand Survey (FooDS) for over two years now. Our data from a nationally representative sample of consumers show it's not even close. People spend a lot more money on food at home. Here's the data from our second annual report.
Our most recent release, just a couple days ago shows at home consumption at about $96/week and away from home at about $53/week.
Thus, our data clearly supports the conclusion drawn by Jo Craven McGinty in the WSJ:
“The government’s monthly retail-sales report provides valuable information that reveals legitimate trends, providing users understand what the numbers represent.
In this case, no matter how you slice it, spending on dining out hasn’t surpassed spending on groceries”
“This paper devises a tractable empirical framework to examine whether the highly subsidized crop insurance program by the United States government makes farmers more sensitive to changes in extreme heat and thereby limits their ability to cope with extreme heat or adapt to it. Insured farmers might not engage in the optimal protection against harmful extreme heat as the resulting crop losses are covered by the insurance program. . . Our results suggest a significant amount of moral hazard in federal crop insurance. ”
That's from a paper by Francis Annan and Wolfram Schlenker just released in the American Economic Review proceedings issue. The authors go on to write:
“This has important implications: first, since the federal government encourages participation in the crop insurance program through premium subsidies, the presence of moral hazard implies that there will be additional cost to the program as losses exceed what they could have been without the program. Second, climate change will amplify the government induced distortion as it will increase the frequency of extremely hot temperatures. Third, our findings imply that there are possibilities to adapt to climate change as uninsured areas show lower sensitivities, but this adaptation potential is skewed by government programs that give a disincentive to engage in it. A farmer will choose subsidized yield guarantees over costly adaptation measures.”
The results of the May 2015 edition of the Food Demand Survey (FooDS) are now in.
Results reveal mixed changes in willingness-to-pay for disaggregate meat products. However, stated purchase intentions for beef, pork, and chicken were all higher than last month as were expectations of price increases, suggesting an uptick in demand for meat.
As was the case in April, this month we again noticed an uptick in awareness of news about bird flu and an increase in concern about the issue. That's two months in a row of notable increases in this issue.
We added several new ad hoc questions to the survey this month.
The first set of questions were in response to the spreading avian influenza (bird flu) problem. I've had several media inquiries (probably in response to this post) about the potential economic impacts of the outbreak. One questions is whether domestic consumer demand for poultry and eggs will dampen in response to the outbreak. My understanding is that avian influenza does not pose a human health or food safety risk, but of course that doesn't mean consumers believe the same. As the regular tracking questions mentioned above suggest, consumers are becoming aware of the issue. To delve into it a bit more, we added two agree/disagree questions.
About 23% of respondents agreed or strongly agreed that they plan to eat less turkey and eggs because of the outbreak of avian influenza, and another 32% say they're concerned about the turkey and eggs they eat. That's far from a majority, but it might be a large enough to affect demand. Whether these beliefs will ultimately manifest themselves in the supermarket remains to be seen.
A second set of questions were added to delve a bit deeper into the issue of labeling of GMO foods. Yes, this an issue that has been much studied, and yes, consumer's answers to the question can't entirely be taken at face value (as my questions on preferences for DNA labeling have shown). But, there seems to be some activity related to a GMO federal labeling initiative re-introduced by US Congressman Mike Pompeo from Kansas and others (see this for some discussion and background). The bill has food industry support and it would move authority for GMO labeling to the FDA (and away from the states) and would only require labels if the FDA determines a health or safety risk.
The first question asked: “Which of the following best describes your position on labeling of genetically engineered food?” Over half of the respondents answered, “Food companies should be required to label genetically engineered food in all circumstances”. The other 46% of respondents expressed a more nuanced view. About one fifth thought labeling should only be required if there is a health or safety risk and another 18% did not have a strong position. The remaining 6.5% of respondents stated “In general, food companies should not be required to label genetically engineered food but voluntary labels are permitted”.
Secondly, participants were asked: “How should the issue of mandatory labeling of genetically engineered food be decided?” They could choose from one of six options.
The majority, 61%, of the respondents stated “by the U.S. Food and Drug Administration (FDA)”. Just over 10% of repspondents stated “I don’t know” and only 5% of respondents stated “by ballot initiatives in each state”.
Finally, the third question asked: “To what extent do you agree or disagree with each of the following statements?” Participants were asked to rate each statement on a scale of 1 to 5 where 1 = strongly disagree, 3=neither agree nor disagree, and 5 = strongly agree.
Respondents rated the statement “In general, I support mandatory labeling or genetically engineered foods” the highest out of the nine statements with a score of 3.86. The statement “Seeing a label indicating the presence of genetically engineered ingredients on a food product would increase the likelihood I’d buy the product” rated the the lowest of the nine statements with a score of 2.84.
Thanks to David Ropeik who suggested a couple of the questions below related to effect of labels on perceptions on choice.
I'm quite sure I've never seen an article in the Proceedings of the National Academies of Science written by a former teacher, a former student, and a friend at a former employer. Well, that changed yesterday. Three top notch agricultural economists, Jesse Tack, Andy Barkley, and Lanier Nalley, just released a paper published in PNAS about the effect of hot and cold temperatures on wheat yields.
The abstract:
“Climate change is expected to increase future temperatures, potentially resulting in reduced crop production in many key production regions. Research quantifying the complex relationship between weather variables and wheat yields is rapidly growing, and recent advances have used a variety of model specifications that differ in how temperature data are included in the statistical yield equation. A unique data set that combines Kansas wheat variety field trial outcomes for 1985–2013 with location-specific weather data is used to analyze the effect of weather on wheat yield using regression analysis. Our results indicate that the effect of temperature exposure varies across the September−May growing season. The largest drivers of yield loss are freezing temperatures in the Fall and extreme heat events in the Spring. We also find that the overall effect of warming on yields is negative, even after accounting for the benefits of reduced exposure to freezing temperatures. Our analysis indicates that there exists a tradeoff between average (mean) yield and ability to resist extreme heat across varieties. More-recently released varieties are less able to resist heat than older lines. Our results also indicate that warming effects would be partially offset by increased rainfall in the Spring. Finally, we find that the method used to construct measures of temperature exposure matters for both the predictive performance of the regression model and the forecasted warming impacts on yields”
There's more discussion about the study in this piece in the Washington Post.