End of Doom

Ronald Bailey has an excellent piece in the October print edition of Reason Magazine entitled, "The End of Doom" and a recently released book with the same title.  It's a nice counterweight to the oft-heard refrain that the world is going to hell.  

Here are a a few quotes I found particularly interesting.  In critiquing Rachel Carson's Silent Spring:

“At its heart is this belief: Nature is beneficent, stable, and even a source of moral good; humanity is arrogant, heedless, and often the source of moral evil. Carson, more than any other person, is responsible for the politicization of science that afflicts our contemporary public policy debates.”

In discussing our out-sized fears of cancers from synthetic chemicals and of biotechnology:

“It should always be borne in mind that environmentalist organizations raise money to support themselves by scaring people. More generally, Bonny observes, “For some people, especially many activists, biotechnology also symbolizes the negative aspects of globalization and economic liberalism.” She adds, “Since the collapse of the communist ideal has made direct opposition to capitalism more difficult today, it seems to have found new forms of expression including, in particular, criticism of globalization, certain aspects of consumption, technical developments, etc.””

He ends with some choice words about the precautionary principle.  

“Why does it matter if the population at large believes these dire predictions about humanity’s future? The primary danger is they may fuel a kind of pathological conservatism that could actually become a self-fulfilling prophecy.”

and

“The precautionary principle is the opposite of the scientific process of trial and error that is the modern engine of knowledge and prosperity. The precautionary principle impossibly demands trials without errors, successes without failures.

...

”An indirect implication of trial without error is that if trying new things is made more costly, there will be fewer departures from past practice; this very lack of change may itself be dangerous in forgoing chances to reduce existing hazards.” ”

Glutton free

One of my friends and colleagues was recently traveling through northern California and stopped to eat in a restaurant that presented the following menu:

Back in the 14th century you could buy indulgences from the Catholic church.  I'm amazed that assuaging the sin of gluttony has fallen to an all time low of just $0.75.

History of US Wine Industry

This article by Clare Malone offers a fascinating look at the history of the U.S. wine industry.  Here's one tidbit about Teresa Carrara an Italian immigrant who married a man named Franzia and who was mother-in-law to Ernest Gallo.  Seems she's  responsible for a huge chunk of today's U.S. wine production.

““She provided the seed money for Gallo, which probably does 40 percent of the wine business in the US; for our company, which does about 15 percent of the wine business in the US; and then her grandsons—yes, grandsons: Fred and Joe and John—started the Bronco Winery, which probably does another five percent of the business in the US,” Arthur Ciocca, former CEO of the Wine Group, remarked in a 1999 oral history project on the California wine industry for the University of California at Berkeley. “[She’s responsible for] more than half of the wine business [in the US].””

And there's this, and much more

“Towards the end of Prohibition, California winemakers began to advocate for certain changes in regulation that would drastically alter their business structure and possibly put their lives at risk—they wanted to ship juice.

In 1929 they got their wish when the federal government overrode stipulations in the Volstead Act—the era’s defining policy—that outlawed selling grape juice concentrate. This was good news for California farmers, but bad news for the Chicago mob. One key ingredient to bootlegged wine was the syrupy juice derived from grapes—grapes that Capone’s network had, until the law was overturned, controlled.

The gangster was enraged and issued death threats again certain growers and shippers. The problem was big enough that the FBI decided to investigate, and Joe Gallo was on a list of grape shippers to be interviewed by authorities”

Food Demand Survey (FooDS) - September 2015

The September 2015 edition of the Food Demand Survey (FooDS) is now out.

Compared to last month, consumer willingness-to-pay (WTP) fell for all the products (meat and non-meat alike) on our survey.  Among meat products, WTP for deli ham witnessed the highest percentage decrease of approximately 21%.  Steak only saw a slight decrease from last month at approximately -2.5%.  

These reductions in WTP might seem problematic for meat industry participants but it is useful to put these in a longer context.  WTP for steak, chicken breast, deli ham, and chicken wing are all higher relative to this time last year. Here is a graph of the WTP values since the beginning of FooDS.  While there are ups and downs, the overall trends are positive for each of the meat cuts shown below, and in fact, last month was the highest WTP observed for several meat products since we started the survey over two years ago.   

We observed a noticeable uptick in consumer awareness of Salmonella in the news this month - likely a result of widely publicized Salmonella outbreaks.  Interestingly, however, concern for Salmonella did not increase this month compared to last.  Concern for GMOs was down a bit this month.  

Several new ad hoc questions were added to the survey this month.

One set of questions related to food waste.  These will be reported separately at a later date.

Another set of questions dealt with consumers’ satisfaction with farmers and agriculture, and the survey was designed to see how the framing affected satisfaction.  The questions came about after a conversation with Mary Ahearn at USDA-ERS. 

Respondents were randomly allocated to one of three conditions.   In the 1st condition, participants were asked: “How satisfied are you with the decisions and manage practices of farmers these days?" Respondents in the 2nd condition were asked the same question but the words “of farmers” were replaced with “of agricultural producers”.  Respondents randomly allocated to the 3rd condition were asked the same question but the words “of farmers” were replaced with “in agriculture”.  

All responses were on a 1 to 10 slider scale where 1 was “completely dissatisfied” and 10 was “completely satisfied.”

Overall, respondents were more satisfied than dissatisfied with farmers, producers, and agriculture, with means higher than 5 our of 10 for all three.  However, respondents were affected by framing.   On average (on the 1 to 10 scale), there was greater satisfaction with “farmers” at 6.63 than for “producers” at 6.29 and than for “agriculture” at 5.93.  

Whereas almost 10% expressed 10=completely satisfied for “farmers”, only 5.8% said the same of “agricultural producers”, and only 5.5% of “agriculture.”  Here's the entire distribution of responses.

Local foods and seasonal price swings

In the Food Police, I wrote the following about local foods when critiquing the argument that a larger local food system would be better for the environment and for food security:

“Because of common weather and temperature, all farms within a region are likely to have their produce come to market around the same time. In a world with regional and international trade, that isn’t a big deal as the surplus can be shipped out to other locations. But, in the locavore’s world, the result is inevitable: spoilage and waste.

...

It would be foolish to invest all your retirement savings in a single stock. The financial experts tell us to diversify. And if we shouldn’t keep all our financial eggs in one basket, the same goes for the real ones. One of the things that makes farming unique compared to other businesses is its unusually large reliance on the weather. An unexpected drought, a rain at the wrong time, an early freeze, or a hail storm can devastate a whole farming community or even an entire region. While farmers protect themselves financially against these kinds of risk by buying crop insurance, what about the food consumer? ”

This new paper in the Journal of Agriculture and Applied Economics by some Hawaiian researchers provides some empirical evidence of the price volatility I mention surrounding local foods.  Here's a graph from their paper showing production and prices of local tomatoes over 12 months of the year

There is a very clear negative correlation between production and price.  When tomatoes are "in season" and local producers have a lot to sell, prices are low, and vice versa.

Of course, that inverse relationship is true for most of agricultural production.  But, here's the difference for a lot of local food production: A) with grains you can store the commodity to help smooth out prices over time (something much harder with perishable fruits and vegetables) and B) with trade you can ship to locations with different seasons (where there is less supply and therefore higher prices).

In short, by limiting sales to local consumers, producers are opening themselves up to a lot of potential price volatility, and to lower prices at the exact time they have produce ready to sell.  How can the producers partially mitigate such effects?  Find people in other locations with different seasons with whom to trade.  

The authors write:

“It can be seen that local price premiums/discounts vary depending on product type and season. For grape and cherry tomatoes, there is an 18.18% local premium during season 1 (before the peak season). However, starting from season 2 (local peak season), price difference declines and becomes insignificant. On the other hand, there are constant local discounts for other tomatoes throughout the year, although prices are considerably lower in seasons 2 and 3. Comparing the results for both types of product, there is a clear downward effect on prices of local tomatoes during the peak production season, suggesting that market prices are likely influenced by the local production level.

One further contributing factor to the price discounting may be the capacity limitations in marketing and distribution by local producers in Hawaii. Since large national producers with more marketing and logistics competence have access to a larger market, production surpluses can be spread over more market areas with less need for discounting. In comparison, small local farms are often constrained by lack of distribution channels and market outlets (Martinez et al., 2010). In the case of Hawaii, because local tomatoes are exclusively supplied to the Hawaiian Islands, this may result in discounting at the retail level in times of production surplus.

Lastly, the Armington analysis shows that consumer choices with respect to locality and organic origins are elastic, and that both local and organic tomatoes are quite substitutable to import nonorganic tomatoes. ”