Zilberman on the Slow and Natural Food Movment

David Zilberman, an agricultural economist at UC Berkeley, has an interesting blog post on the slow and natural food movements. The timing of his piece is impeccable given the long, aggressive defense of the food movement Michael Pollan just wrote in the New York Times Magazine. After a bit of praise for the movements, Zilberman gets to some critiques.

Here are the core criticisms:

“However, most of these bodies of thought emphasize advocacy and are short on analysis. In particular, they underemphasize several factors. First, they underemphasize tradeoffs and costs. There are tradeoffs on the demand side, where consumers choose food based on cost, taste, and convenience. Fast food is a huge industry for a reason. The development of ready-to-cook and ready-to-eat meals, modern equipment (electric stoves, refrigerators, and microwaves), and modern supermarkets have been contributors in enabling women to join the job market. At the same time, there are tradeoffs on the supply side between cost of production and technology. ”

and

“Second, the naturalized paradigms undervalue the importance of technology in production and distribution. Modern lifestyle is the result of immense innovations in medicine, biology, communication, etc. I am very aware of the risks that technologies pose, but when I see a poor farmer in Ivory Coast with a cell phone and bicycle, I realize the power of technology. ... The challenge is how to use it appropriately and spread its distribution broadly rather than giving up on it.”

and

“Third, the naturalist paradigm underestimates the importance of heterogeneity among people and regions. Differences in income lead to different food choices. ... There is a huge difference between farmers in Iowa that obtain more than 10 tons/Hectare of corn and farmers in Africa that may obtain 1.5 tons/Hectare. ... I don’t expect people to use the same techniques everywhere, and that different technologies are appropriate in different locations. ”

On his last point, I full agree:

“Heterogeneity brings me to a larger point. There is a place for both industrial and naturalized agricultural systems. The naturalization paradigm is leading to the emergence of higher-end restaurants and fresh food supply linking the farmer to the consumer, each of which have limited reach but are important source of income and innovation in agriculture. At the same time, the majority of people will be dependent on industrialized agriculture. The two can coexist and coevolve. ”

Assorted Links

• The New York Times published several letters responding to my piece on environmental improvements at large farms.  I'm happy to have sparked a conversation!
• My paper with Trey Malone on the effect of California's animal welfare laws on egg prices has been officially published by the Journal of Agricultural and Resource Economics.  I should note that the state of Massachusetts has a ballot initiative before voters this November that will, if passed, make its egg-housing policies similar to those in California.
• Speaking of Trey, another of our co-authored papers was finally released by the Journal of Entrepreneurship and Public Policy.  The paper looks at the effect of state alcohol laws on the number and type of breweries in the state.  "We find that allowing breweries to sell beers on-premises as well as allowing for breweries to self-distribute have statistically significant relationships with the number of microbreweries, brewpubs, and breweries."
• Interesting result from analyses of NHANES data: "A very small percentage (2.1%) of the U.S. population aged 1 year and older identified themselves as vegetarians; and within this group, only about 3% were true vegans - they did not report consuming any animal protein sources on any given day" and "Among these self identified vegetarians, almost half reported consumption of meat, poultry, or seafood."  

Why is the milk at the back of the store?

That was the question asked in a Planet Money podcast, which re-aired earlier this week.  

The conventional answer was provided by the food writer Michael Pollan:

“I’ve come to understand the landscape of a grocery store as a brilliantly designed landscape to get us to buy as much food and as much expensive food as possible. So my general impression is that the milk is in the back.

And it’s - but - and it’s not just that the milk is in the back. It’s also usually very far from the bread. Both of them are very common items that everybody needs, and so it makes you cover a lot of ground if you want them.”

Another perspective was provided by the economist Russ Roberts:

“Russ thinks the reason the milk is in the back is practical. It’s easier to keep the milk cold if it’s there. The delivery trucks come into the back of the store. Milk goes right into this refrigerated room that’s often right behind the cooler where you grab your milk. No one has to lug the milk through the store to some cooler in the front.

ROBERTS: Milk spoils very easily. I was told that for every degree of temperature it rises, it loses a day of being available and being sellable. So the argument I’m making, which is kind of a radical argument, is that you and I want the milk in the back, even though it’s a little less convenient. If it were in the front, it would be more expensive, and we’re not willing to pay that extra price. So I think they’re actually doing what we want, not what they want.”

How can we know whose view is right?  To answer the question, we'd need to observe a world where milk doesn't need to be refrigerated and then see where grocery stores - in this alternative universe - place the milk.

As it turns out, such an alternative universe actually exists!  It's called France.

I spent part of 2011 on sabbatical and Paris, and when first grocery shopping I was surprised to find the milk often sitting right next to the laundry detergent or the cereal, unrefrigerated.  How is this possible? For reasons that aren't entirely clear to me, much of the milk sold in France is ultra-high temperature (UHT) pasteurized.  The process makes the milk "shelf stable" - it doesn't spoil when left unrefrigerated (I personally thought it tasted pretty terribly).

So, where do French grocery stores stock the milk?  I only have anecdotal evidence based on my own shopping experiences, but by and large I'd say it was NOT at the back of the store. It was often situated somewhere near the center of the store.  Moreover, some stores sold both UHT milk and "regular" refrigerated milk, and the refrigerated milk as typically at the back in a refrigerated case while the UHT milk was situated elsewhere in the store.  

My take: Russ Roberts 1, Michael Pollan 0.

P.S.  There is another line of evidence in favor of Russ's view.  Where do you typically find (unrefrigerated) soy milk in your grocery store?  In our local Walmart, it's in the center of the store, not at the back.

Large-scale farming good?

The New York Times is slated to run a piece I wrote in the Sunday edition.  

Here's a snippet:

“Large farmers — who are responsible for 80 percent of the food sales in the United States, though they make up fewer than 8 percent of all farms, according to 2012 data from the Department of Agriculture — are among the most progressive, technologically savvy growers on the planet. Their technology has helped make them far gentler on the environment than at any time in history. And a new wave of innovation makes them more sustainable still.”

Working with the Times editors, I pulled together the following figure to illustrate the great strides being made in agriculture.  

Here's the conclusion:

“There are no easy answers, but innovation, entrepreneurship and technology have important roles to play. So, too, do the real-life large farmers who grow the bulk of our food.”

You can read the whole thing here.

Is Organic Agriculture Taking Over?

A few days ago, the USDA released a new report on the amount of farmland and farm production that is certified organic.  I've seen a number of news stories tout the main result from the report summary:

“Certified organic farms operated 4.4 million acres of certified land in 2015, up 20 percent from 2014”

Given the price premiums for organic, I suspect there have been some more conversions over the last year, but I see several things wrong with the way this statistic has been covered.  First, what happened to the rest of (non-organic) farm acres in the US?  Are they up or down?   Second, Politico noticed something interesting about the result:

“Organic acreage might be up 20 percent from 2014, according to the USDA’s 2015 organic census, but it’s not quite the good news the industry was hoping for. The vast majority of the bump — 96 percent of the new acres — is thanks to the certification of 700,000 acres in Alaska. Organic Trade Association spokeswoman Maggie McNeil says the new Alaska acreage stems from a single rangeland certification . . .”

Finally, to get a real sense of the impact of organic production on the agricultural landscape, we need to put the figures in perspective.  As it turns out, organic still represents a very small segment of the farm sector.  I took the latest USDA organic report and tried to mesh it with other USDA data to figure out what percent of the acreage is organic for a given crop, and what percent of the value of production is organic.  I somewhat randomly picked a number of fruits and vegetables to compare and then also pulled out the major commodity crops.*  

The above figure suggests that 22.7% of all acres devoted to growing lettuce in the US were certified organic.  For eggs, 3.6% were organic.  For wheat acres, only 0.7% were organic.  Only 0.1% of beef cows were organic, and 001% of hogs and pigs were organic.  

It is important to note that the amount of acreage devoted to lettuce, carrots, apples, and snap beans is tiny compared to corn, soy, and wheat.  For example, in 2015, about 1.2 million acres were devoted to lettuce, carrots, apples, and snap beans - an amount that is only 1.4% of the amount of land devoted to corn alone.  The point is that even though fruits and vegetables seem to have a higher share devoted to organic than commodity crops, because commodity crops account for the vast majority of land farmed , the total or overall share of cropland in organic remains very small.  For corn, soybeans, and wheat acreage combined, only 1% of the land is organic.

Here's a similar figure but calculated instead as a share of the value of production (i.e., the share of dollars).  

One might expect that organic would represent a larger share of the value of production since prices of organic are higher.  Indeed, this is the case for eggs and apples.  However, it is important to realize the organic yields tend to be lower.  Thus, we tend to not get as much output (or quantity) for each unit of land in production.  So, in the case of lettuce, for example, 22.7% of the acres are organic but only 13.6% of the dollars come from organic.  I suspect this is a result of lower yields for organic despite the fact that organic commands a price premium.  

*Note on the calculations and comparisons: Which numbers should be used in the comparison wasn't always clear, and it also wasn't clear whether the regular USDA production numbers include organic or not (I assumed they did in my calculations, an assumption that, if wrong, would make the organic % higher than it actually is).  The organic report provided values for vegetables grown in the open and under protection; I summed the value of production for both types but because no acreage is provided for the production "under protection", the value is not included calculations.  For non-organic fruits and vegetables, I summed the production for both fresh and processed.  All that said, I tried to make the comparisons as fairly as I could.