Can I get that with an extra GMO?

That's the title the editors of the Wall Street Journal gave to my piece that was published today.  I touched on the issue of GMO labeling, but also tried to elevate the discussion a bit to delve into the broader issues at play.  

Here are a few snippets:

“Lost in the politics is a deeper debate about the future of our food system. At the core of many anti-GMO arguments lies a romantic traditionalism, a desire for food that is purportedly more in line with nature. Perhaps we should eat only the food that God gave us. Yet manna rarely falls from heaven.

The truth is that what we eat today differs radically from the food eaten even a few hundred years ago. Carrots used to be purple. Random mutations and selective breeding led to their signature color during the 16th century in the Netherlands, where it later was claimed the new varieties honored the King William of Orange. Broccoli, kale, cauliflower and Brussels sprouts all emerged from the same wild plant. Potatoes and tomatoes originated in the Americas and were never eaten in Europe and Asia until after the New World was discovered. Today we eat more and better than ever, precisely because we did not accept only what nature provided.”

and, in conclusion, after discussing the host of new biotech innovations coming to market:

“Food manufactures today may be reluctant to label foods made using biotechnology. But one day soon, when the fad against GMOs fades, they might be clamoring to add the tag: proudly produced with genetic engineering.”

Magruder Plots

I suspect one of the reasons there is a lot of concern over the future of food and agriculture is that most people are scarcely aware of the great research on these topics going on at universities all across the country.  In Unnaturally Delicious, I tell the story of Alexander Magruder, the first professor of agriculture at what is now Oklahoma State University, who started a scientific experiment on sustainability in 1892 that continues to this day (note: Oklahoma didn't even become a state until 1907).  Here are a couple of old images I obtained from Bill Raun who oversees the research today.

So, what did Magruder do?

“On a plot donated to the college by a local family, Magruder plowed up virgin prairie soil to explore what would happen if the land was “sown in wheat year after year without the addition of any fertilizing material.” In short, Magruder was interested in the sustainability of farming practices that relied on no outside sources of nutrients. He wrote in 1892, “No fertilizers, either commercial or home-made, were used. It is our object to get at the natural value or strength of the soil that we may compare present yields with those of the future when barn-yarding and green manuring will have been practiced.” This was before the German chemists Fritz Haber and Carl Bosch figured out how to extract nitrogen fertilizer from the air. Mineral fertilizers were in short supply and were not widely used. The main fertilizer available to farmers was what it had been for centuries: animal manure.”

You'll have to read the book to get the whole fascinating story of Magruder and the research plots. Despite a number of significant hurdles, amazingly the research is today still being conducted on the same soil Magruder plowed up in the late 1890s, and agronomists at Oklahoma State are still comparing yields of the original "check" plot to new treatments that have been added over the years to study the effects of adding manure or various "synthetic" fertilizers.  Here's a modern-day photo of the plot, which as you can see, is now a federal historic landmark. 

What have the researchers found?  Here's a slice:

“The key message from the 120-year-old experiment on the Magruder plots is that, so long as genetics continue to improve, and especially if manure or nitrogen can be added back to the
soil, wheat yields on the Great Plains are not only sustainable but can experience continued growth.

Back in the 1890s, Magruder’s original check plot yielded fewer than thirteen bushels per acre. Remarkably, in the first decade of this century, that same check plot averaged fifteen to sixteen bushels per acre. Plots that have received only manure treatments for more than 125 years are now yielding more than thirty bushels per acre, and the plots receiving nitrogen, phosphorous,
lime, and potassium today routinely yield more than thirty five bushels per acre.”

Impacts of Agricultural Extension

There is an interesting new article forthcoming in the journal Applied Economic Perspectives and Policy by Stephan Goetz and Meri Davlasheridze. 

Here's the abstract.

“Numerous studies have evaluated the impact of Extension on farm productivity and related outcomes. Here we use annual data from 1983 to 2010 covering the 50 U.S. states to examine the impact of Extension on net changes in the number of farmers. The historical transition of farmers out of U.S. agriculture raises the question of whether Cooperative Extension and underlying Hatch-funded research spending keeps farmers in agriculture or accelerates their exit. On balance, nearly 500,000 more farmers left than entered agriculture over the period studied. We estimate that without Extension, as many as 137,700 (or 28%) additional farmers would have disappeared on net. Overall, Extension programs are a remarkably cost effective way of keeping farmers in agriculture. Alternatively, shifting just 1.5% of federal farm program payments to Extension would have reduced net exits over this period by an estimated 11%, or 55,000 farmers.”

A few thoughts/comments:

• It seems that spending on agricultural extension saves more farms than farm subsidies.  Surprisingly, the authors find a negative relationship between farm subsidies in one year and farm profitability the next year.
• I'm not 100% sold that the authors have identified causal relationships.  A more vibrant agricultural sector will likely demand (i.e., lobby for) more extension.  The authors attempt to deal with this by looking at lagged (rather than current) spending on extension on current farm profitability.  I suppose they also partially deal with this by looking only at federal spending to states rather than state spending.  
• While the authors find a positive relationship between spending on ag research and farm profitability, there is no relationship between research spending and change in farm numbers.  This finding must be interpreted in light of the large literature on the positive relationship between ag research and increased farm productivity; this research allows for long lag times between spending and impacts and finds very high rates of return to ag research spending. 

Economics of Food Waste

There seems to be a lot of angst these days about food waste.  Last month, National Geographic focused a whole issue on the topic.  While there has been a fair amount of academic research on the topic, there has been comparatively little on the economics of food waste.  Brenna Ellison from the University of Illinois and I just finished up a new paper to help fill that void.

Here's the core motivation.

“Despite growing concern about food waste, there is no consensus on the causes of the phenomenon or solutions to reduce waste. In fact, many analyses of food waste seem to conceptualize food waste as a mistake or inefficiency, and in some popular writing a sinful behavior, rather than an economic phenomenon that arises from preferences, incentives, and constraints. In reality consumers and producers have time and other resource constraints which implies that it simply will not be worth it to rescue ever last morsel of food in every instance, nor should it be expected that consumers with different opportunity costs of time or risk preferences will arrive at the same decisions on whether to discard food”

So, what do we do?

First, we create a conceptual model based on Becker's model of household production to show that waste is indeed "rational" and responds to various economic incentives like time constraints, wages, and prices.  

We use some of these insights to design a couple empirical studies.  One problem is that it is really tough to measure waste.  And, people aren't likely to be very accurate at telling you, on a survey, how much food they waste.  Thus, we got a bit creative and came up with a couple vignette designs that focused on very specific situations.  

In the first study, respondents were shown the following verbiage.  The variables that were experimentally varied across people are in brackets (each person only saw one version).  

“Imagine this evening you go to the refrigerator to pour a glass of milk. While taking out the carton of milk, which is [one quarter; three quarters] full, you notice that it is one day past the expiration date. You open the carton and the milk smells [fine; slightly sour]. [There is another unopened carton of milk in your refrigerator that has not expired; no statement about replacement]. Assuming the price of a half-gallon carton of milk at stores in your area is [$2.50; $5.00], what would you do?”

More than 1,000 people responded to versions of this question with either "pour the expired milk down the drain" or "go ahead and drink the expired milk."  

Overall, depending on the vignette seen, the percentage of people throwing milk down the drain ranged from 41% to 86%.

Here are how the decision to waste varied with changes in the vignette variables.

The only change that had much impact on food waste was food safety concern.  The percentage of people who said they'd discard the milk fell by 38.5 percentage points, on average, when the milk smelled fine vs. sour.  The paper also reports how these results vary across people with different demographics like age income, etc.

We conducted a separate study (with another 1,000 people) where we changed the context from milk to a meal left-over.  Each person was randomly assigned to a group (or vignette), where they saw the following (experimentally manipulated variables are in brackets).

“Imagine you just finished eating dinner [at home; out at a restaurant]. The meal cost about [$8; $25] per person. You’re full, but there is still food left on the table – enough for [a whole; half a] lunch tomorrow. Assuming you [don’t; already] have meals planned for lunch and dinner tomorrow, what would you do?”

People had two response options: “Throw away the remaining dinner” or “Save the leftovers to eat tomorrow”.

Across all the vignettes, the percent throwing away the remaining dinner ranged from 7.1% to 19.5%.  

Here are how the results varied with changes in the experimental variables.

Meal cost had the biggest effect.  Eating a meal that cost $25/person instead of one that cost only $8/person reduced the percentage of people discarding the meal by an average of 5.8 percentage points.  People were also less likely to throw away home cooked meals than restaurant meals.  

There's a lot more in the paper if you're interested.

Food Demand Survey (FooDS) - Third Year Review

It's hard to believe, but the Food Demand Survey (FooDS) has been conducted every month now for three years.  I've been fortunate to have Susan Murray working with me to make it happen every month and to have funding support from DASNR, the Willard Sparks Endowment, and the USDA NIFA competitive grant program, AFRI.  

We've pulled together a summary of trends in key survey question we've asked for the past three years.

Overall, willingness-to-pay (WTP) for most meat products has been down this year compared to last year, partly reflecting (I suspect) lower overall meat prices.  Here are relative changes in WTP where May 2013=100 for steak, chicken breast, and pork chops.    

Steak WTP

Chicken breast WTP

Pork chop WTP

We also ask people their expectations about increases in prices of beef, pork, and chicken. Here is the trend in future price expectations for beef.  Except for last month, expectations have been lower this year compared to last  (consistent with the fact that retail prices have declined).

Expectations of Future Beef Price Increases

Here is the trend in awareness and concern for the four top concern issues tracked in our survey (May 2015=100).  There was a big spike in awareness of E. Coli in the news in November and December, which coincided with the Chipotle outbreak.  Pay attention to the units on the vertical axes.  As might be expected, awareness of these four items in the news is much more volatile than is concern.

Awareness in the News

Concern

Finally, here are the % of respondents each month who say they are on food stamps, are vegetarian, or say they had food poisoning in the past month.  For comparison purposes, note that USDA data suggests 22.3 million households are on food stamps, and the Census Bureau indicates there are roughly 116 million households in the US, which implies about 19% of households are on food stamps.  

If you want to compare to previous years, check out the First Year and Second Year reviews.