Interest in Gardening

I was chatting with a few colleagues this morning and the topic of gardening came up. Curious as to whether there was more interest in gardening this year as food prices are rising, a search on google trends commenced.

Google searches for "gardening"

As the graph above reveals, google searches for “gardening” are highly seasonal, peaking in April and May each year. Also interesting is the apparent downward trend in searches for gardening since 2004. The downward trend was disrupted by COVID-19. In 2020, searches for gardening peaked in April and May at levels that hadn’t been seen in at least a decade. In 2022, we appear to be leveling off below the last two years.

While the COVID peak is apparent in the above graph, it wasn’t as large as perhaps might have been expected. In Google Trends, one can also search in categories. If I search “gardening” in the “shopping” category, here’s what I find.

Google searchers for "gardening" in the shopping category

If I understand these data correctly, this is an index of the volume of searches for gardening with the intent to buy gardening-related items. In this rendition, May 2020 is the peak over this 18 year time period. The dotted-line forecast suggests this May may be another banner year for sales of gardening-related wares.

Does gardening respond to economic factors like food prices and recession-induced changes in income or time availability? Is gardening an inferior, normal, or luxury good? Does interest in gardening vary with health concerns? These questions are ripe for academic research.

Some new papers

I’ve been fortunate to have several papers accepted for publication in the past few days - one on meat demand, another on plant-based meat alternatives, and two papers on consumer research methods. Below is a summary of each, starting first with the research methods papers.

1) A Basket-Based Choice Experiment with Vincenzina Caputo in Food Policy. Here’s the abstract:

“Although economic research on food consumer demand has exploded in recent years, most survey demand elicitation approaches have substantial limitations for food policy evaluations as they involve consumers choosing only one item out of a bundle. There is a need to design a more flexible approach capturing more realistic consumption patterns. This study introduces such an approach – a basket-based choice experiment – where consumers select their preferred food item or combination thereof. Our basket-based choice experiment includes 21 food items that can be freely combined to construct over 2 million possible baskets. Our results show that when given the opportunity, consumers select multiple items for their basket, most commonly three or four items. A composite conditional likelihood function approach is used to reduce the computational burden associated with modeling the choice of over 2 million possible baskets, and estimates are utilized in a multivariate logit model to calculate the probability of bundle selection and individual food price elasticities. Unlike typical choice experiments utilizing multinomial logit model variants, which forces products to be demand substitutes, our basket-based approach is able to capture a rich set of substitution and complementary patterns, and we find that most of the 21 food items studied are demand complements. The BBCE is used to explore policy questions related to the impacts of changing prices on the healthfulness of consumer dietary choices and the welfare effects of product bans, such as Meatless Monday.”

2) A Calibrated Choice Experiment Method with Lauren Chenarides, Carola Grebitus, and Iryna Printezis in the European Review of Agricultural Economics. Here’s the abstract:

“Although choice experiments have emerged as the most popular stated preference method in applied economics, the method is not free from biases related to order and presentation effects. This paper introduces a new preference elicitation method referred to as a calibrated choice experiment, and we explore the ability of the new method to alleviate starting point bias. The new approach utilizes the distribution of preferences from a prior choice experiment to provide real-time feedback to respondents about our best guess of their willingness-to-pay for food attributes, and allows respondents to adjust and calibrate their values. The analysis utilizes data collected in 2017 in two U.S. cities, Phoenix and Detroit, on consumer preferences for local and organic tomatoes sold through supermarkets, urban farms, and farmers markets to establish a prior preference distribution. We re-conduct the survey in May 2020 and implement the calibrated choice experiment. Conventional analysis of the 2020 choice experiment data shows willingness-to-pay is strongly influenced by a starting point: the higher the initial price a respondent encountered, the higher the absolute value of their willingness-to-pay. Despite this bias, we show that when respondents have the opportunity to update their willingness-to-pay when presented with the best-guess, the resulting calibrated willingness-to-pay is much less influenced by the random starting point. ”

3) Benchmarking US Consumption and Perceptions of Beef and Plant-Based Proteins with Hannah Taylor, Glynn Tonsor, and Ted Schroeder in Applied Economic Perspectives and Policy. Here’s the abstract:

“This article uses two complementary analyses to document consumption of beef and plant-based proteins along with perceptions held by US consumers. Beef is chosen three times more often than plant-based proteins and consumers hold a positive image of beef overall. Key differences are outlined between regular meat consumers and those declaring alternative diets. Combined these findings extend understanding in the dynamic situation presented by plant-based proteins in the US market.”

4) U.S. perspective: Meat Demand Outdoes Meat Avoidance with Glynn Tonsor in Meat Science. Here’s the abstract:

“Despite ample discussion of health, environment, and animal welfare effects of meat production and consumption, this article documents past, current, and projected consumption patterns reflecting robust meat demand in the United States. There is some evidence of meat avoidance behavior among a segment of the population, including younger, higher educated, higher income consumers in the Western United States. At the same time, the majority of U.S. residents self-declare as regularly consuming products from animals, and there is evidence of strong demand growth for meat products in recent years. Key factors influencing protein purchasing decisions are presented revealing critical roles of taste, freshness, and safety. Combined this article summarizes both the aggregate and more refined, household-level situation underlying robust meat demand in the U.S.”

Consumer Food Insights - April 2022

The April 2022 edition of our Consumer Food Insights report is now out.

A few highlights from this month:

• The Sustainable Food Purchasing (SFP) index is up about 2 points since January

• Consumer food spending fell slightly from March to April but remains about 9% higher than in January

• Food insecurity rates are the lowest we’ve measured since the survey started

• 46% of consumers have heard of the recent bird flu outbreaks; 60% are concerned about the impact on food prices

• This month, we did a deeper dive into differences in behavior of urban vs. rural consumers. Rural consumers are more likely to be food insecure and are less happy with their diets as compared to urban consumers.

Finally, I’ll note that we’ve created our first data dashboard to explore current and past editions of the Consumer Food Insights survey. This dashboard focuses on the questions we ask about shopping and eating habits, and allows the user to see how these vary by demographic characteristics and by month of the survey. For example, the screenshot below shows propensity to buy organic food by income. Play around with the data yourself.

P.S. Kudos to Sam Polzin for his excellent work on the survey administration and reporting and to Anna Subramaniam for work on the data dashboards.

Bird Flu - Again

It was about this same time of year back in 2015 when bird flu raised it’s ugly head (see what I wrote about it here or here), and the basic economic principles outlined then apply to the re-appearance of bird flu that we are now seeing in U.S. turkey, layer, and broiler flocks. What differs today are the magnitudes. To what extent can bird flu explain some of the rising poultry and egg prices currently being witnessed?

USDA APHIS tracks confirmations of cases of the most recent spate of bird flu, with the first case reported on February 8, 2022. Many of the reported cases involve small number of birds from backyard flocks (highlighting the fact that some of the spread occurs via wild birds). Focusing on commercial flocks, there have been 3.6 million turkeys affected, 2.1 million chicken broilers (i.e., "meat chickens”) affected, and 16.8 million egg layer chickens affected.

These sound like large numbers, but how do they compare to total U.S. inventory of these birds? If I compare the bird flu cases to USDA data on the typical amount of production that has occurred over the past couple months, data suggest bird flu has adversely affected about 10% of turkey production, 0.1% of broiler production, and 4.3% of egg production.

As I described here, the impact of these supply reductions will have on prices depends on the price-elasticity of consumer demand (i.e., the level of consumer sensitivity to price changes). It’s often thought that egg demand is highly inelastic (i.e., consumers aren’t very sensitive to egg price changes), in part because there aren’t many good substitutes for eggs. As a result, small-ish supply shocks can translate into large price changes for eggs. For example, assuming a price elasticity of demand of -0.15 for eggs, a 4.3% reduction in quantity supplied would be expected to lead to a (0.043/0.15)*100 = 28.7% price increase.

The actual egg price increased we’ve observed are higher than this. The figure below shows wholesale egg prices going back to January 2010. As of April 9, 2022, wholesale egg prices are 74% higher than at the first of the year and about about 166% higher than at the same time one year ago in 2021. Obviously, there’s more than bird flu affecting egg prices. General inflationary trends, increased egg demand around Easter, higher feed and fuel prices, and more are contributing to the current spike above and beyond bird flu.

Likewise, the current chicken price increases can’t be much explained by bird flu because such a small share of broiler chickens have been affected by it. Other factors must be at play.

Curiously, the industry that’s been most affected by bird flu - turkey - is experiencing the slowest rate of price increases. Since the 1st of the year, USDA data suggest wholesale prices for whole frozen turkeys are “only” up about 10%, whereas wholesale fresh turkey prices have actually fallen a bit since early January.

In short, while bird flu is devastating for those producers who have flocks affected, the avian disease doesn’t seem to be a major culprit in the current price changes we’re seeing in turkey, eggs, and chicken.

Of course, that could change if more flocks are affected in the future, so stay tuned.

If you want to see what’s happening to retail food prices, check out our data dashboards at the Center for Food Demand Analysis and Sustainability at Purdue.

Consumer Food Insights - March 2022

The results from the March edition (now issue #3) of our newly launch Consumer Food Insights (CFI) survey from the Center for Food Demand Analysis and Sustainability (CFDAS) at Purdue are now available.

This month, we continued tracking many of the key measures I’ve discussed in previous months. Here are some highlights:

• The Sustainable Food Purchasing (SFP) Index was unchanged from last month and it is at 68 out of 100.

• There was a slight decrease in the the share of consumers indicating they couldn’t find specific foods at the store (a fall from 25% to 21%) from February to March

• Total food spending increased by 8% from last month

• At present, we find consumer food demand is price insensitive.

This month’s report has several new analyses and questions. First, we conduced a deeper dive into how responses varied by consumer income. Higher income consumers tend to rate the sustainability of their diets as higher than do lower income consumers, particularly on dimensions related to taste, security, economics, and nutrition. By contrast, there was very little difference in high vs. low income on sustainability dimensions related to social and environment.

In addition to answering questions about how shopping behaviors relate to six sustainability dimensions, we also ask respondents to allocate 100 points to these six dimensions in terms of their importance when buying food. Perhaps not surprisingly, lower income consumers placed a higher weight on affordability than did higher income consumers. By contrast, higher income consumers placed more weight on taste and nutrition than did lower income consumers. There was little income difference in the weight attached to social responsibility, environmental impact, or availability across income categories.

Higher income consumers are happier with their diets and are much less likely to be waiting on their next payment to buy food for their household.

To track whether consumers are beginning to shop in a more price-responsive, or recessionary, manner, we asked if respondents would purchase a basket of brand name groceries priced at $100 or a comparable basket of generic name groceries priced at either $85 or $70 (the amount randomly varied across respondents). Higher income households were much more likely to say they’d choose branded over generic products than lower income consumers. However, for all three income groups, none were particularly sensitive to the change in price of brand vs. generic.

There are also income differences in support for food policies. Lower income households showed more support for policies like increasing funding for ag research, but they showed less support for fast food zoning and sweetened beverage taxes as compared to higher income consumers.

We added several new questions this month related to how food away from home spending varies by different type of outlet (and by in-person vs. drive through vs. delivery), and we added questions about consumers’ beliefs about various food-related issues. There was strong agreement that climate change will impact food prices, and less agreement that GMOs are safe or that plant-based milk is healthier than dairy milk. Perhaps an indication of chemophobia or general distrust of unknown substances, 26% agreed that food with deoxyribonucleic acid (i.e., DNA) is unsafe to eat.

There’s a lot more in the report. Check the whole thing out here.