Country of Origin Labeling Developments

A recent report from the Congressional Research Service has a nice discussion of the ongoing developments associated with mandatory country of origin labeling for meat: 

Less than one year after the COOL rules took effect, Canada and Mexico challenged them in the World Trade Organization (WTO), arguing that COOL has a trade-distorting impact by reducing the value and number of cattle and hogs shipped to the U.S. market, thus violating WTO trade commitments agreed to by the United States. In November 2011, the WTO dispute settlement (DS) panel found that (1) COOL treats imported livestock less favorably than like U.S. livestock (particularly in the labeling of beef and pork muscle cuts), and (2) COOL does not meet its objective to provide complete information to consumers on the origin of meat products.

This decade-long timeline of events was particularly helpful:

How to Make Beef without Killing the Cow

An interesting video on how to make meat in the lab

The perfect American pig?

My wife forwarded me this story, which is interesting for a number of reasons.  It begins:

From California's Silicon Valley to the cornfields of Iowa, former computer engineer and now pig farmer, Carl Blake is reinventing the way that Americans eat their pork. Through his technology-based approach and good ol’ fashioned farming, he says he has bred the perfect tasting American pig.

There are a couple things to like about this guy's approach.  First, it shows that small-scale niche farming doesn't have to imply a rejection of modern technology.  

The quality of the pork also has to do with what the pigs are fed. Blake uses hydroponic technology, which grows fresh food in water. He is able to pay about $100 for seeds that will grow one-ton of food in six days. Compare that to the price tag of conventional feed prices of $500-$600 per ton. Blake said he doesn’t understand why more farms don’t use the same technology but hopes that it will eventually catch on.  

I'm a little skeptical about the claim that feed from hydroponic technology is substantially cheaper than typical hog feed, once one factors in the cost of labor, capital, etc.  But, more power to him if he can make it work.  And, if it is really increases quality and reduces costs, there's a good chance Tyson, Smithfield, and other large hog producers will be following shortly behind.

There are two things about this story that are worth picking on.  First, is something of a clarification.  Blake is right that meat from the so-called "heritage breeds" of pork are often juicier and tastier (and fatter) than what you'll normally find in the grocery store. As Blake put it:

If you wanted white meat, you buy a chicken. Pork is not meant to be a white meat,

But, we need to ask why the large hog producers make pork this way.  One is that it is probably healthier (at least in terms of fat content) and because, for most people, price trumps quality.  It is easy to decry "chicken-like pork" in the grocery store, but I think it is useful to take a step back and ask why this is the pork we have, and it is a result of a grand competitive process of consumers trying to tell hog producers what they want via their wallets at the store.  We all want cheaper pork.  We all want tastier pork.  That's not controversial.  The interesting thing is to see how that trade-off is manifested in the market, and at least have some respect for the outcome that has emerged.  Now, that's not to say there isn't merit in trying to grow a different kind of pork for someone who particularly values quality or has a few more $ to spend.  

Finally, I was intrigued with the farmer's claim that: 

This is an American pig that I developed in America and I developed it here in Iowa.

I think I know what he's getting at, but a little history is useful too.  Did you know hogs are not native to America?  They came over once Europeans started trekking back and forth in a process referred to as the Columbian exchange.  Here's a neat picture (taken from here) of some of the foods that are "new" to America:

Consumer Attitudes toward Big Food circa 1900

I've been reading an advanced copy of Maureen Ogle's new book, In Meat We Trust: An Unexpected History of Carnivore America .  I'm about half way through, and so far it is fantastic.  

In one section, Ogle writes about Americans' attitudes toward meat packers in the early 1900s:  

Americans insisted on access to cheap food, regardless of its true cost, but believed the worst of those who made that cheap food possible and abundant

Is it any different today?  By the way, when she's referring to "true cost" she doesn't mean externalities - she's talking about the material costs of raising beef and getting it to market, which the average consumer under-estimates.  

She also cited a magazine article written around the same time about by a journalist who actually understood the the effects brought about by the Swift meat packing company:  

“We make great outcry against the concentrated bigness of the packers, yet the probability is that we would make yet greater outcry if the modern system of food supply were suddenly cut off and we were put back on the basis of local butcher-shops.” He was right. in the United States, the mechanisms of food supply were so efficient that they had become taken for granted  —  and when it came to food, Americans took nothing for granted so much as low price. 

They say that the more things change, the more they stay the same.  Here we are a hundred years later, and it remains the case that the mechanisms of food supply are so efficient that they are taken for granted.

What Explains the Difference in the Way Americans and French (and Brits) Eat?

I ran across this fascinating paper entitled "Do Prices and Attributes Explain International Differences in Food Purchases" by Pierre Dubois, Rachel Griffith, and Aviv Nevo that is forthcoming in the American Economic Review (an earlier version of the paper is here; a gated forthcoming version can be found by searching here).

According to the paper, French consumers eat about 1777 calories every day.  Americans, by contrast, eat 2103 calories (UK falls in the middle at 1929).  The differences don't end there.  49% of our calories come from carbs; but for the French its only 38%.  A much larger share of French calories comes from fat than those of us in the US (46% vs. 37%).  When one digs a little deeper - it becomes clear why: The French eat more dairy and oils than Americans.

Now, here is the key question which Dubois and colleagues ask.  Why do people in the US, UK, and France eat so differently?   

The authors consider three possible explanations: 

1. differences in prices across countries,
2. differences in the food options available (and nutrient content of foods) across countries, or 
3. differences in what people like to eat across countries (i.e., differences in preferences).

Their data reveals a number of interesting findings.  For example, even though Americans eat more calories than the French, we spend less money doing so ($426/quarter vs. $466/quarter).  Part of the explanation is that food prices are generally higher in the France than the US, but interestingly, it isn't across the board in the ways one might expect.  Fruit and Veggie prices are similar in the US and France.  But, the prices for dairy, meats, oils, and prepared foods are 31%, 76%,  16%, and 18% lower in the US than France.  Interestingly, sweeteners and drinks are priced 39% and 43% higher in the US than in France.  So, one thing becomes apparent: the French are eating more dairy and oils than we are in spite spite of the higher prices.  They must either really like to eat those foods or there must be more of those kinds of foods in France to choose from (they also eat about the same amount of meat as we do - as a share of calories - despite meats being 76% more expensive it France).   

Ultimately,  Dubois and colleagues find that all the above factors matter.  The author's models predict that Americans consume an average of 2212 calories each day (slightly more than the "raw mean").  Then, the authors make some interesting projections.  They calculate that Americans would:

• eat 2158 calories if we were exposed to the same food options (or product attributes) as the French
• eat 1890 calories if we faced the same food prices as the French
• eat 1841 calories if we faced the same food options and prices as the French

The authors conclude:

The estimates allow us to simulate counterfactual quantities purchased by households with preferences from one country but facing prices and product attributes from another country. We use the simulations to learn about the relative importance of preferences versus the economic environment. We find that, the average US household when faced with French prices and product attributes, will purchase substantially fewer calories, bringing the level close to that of the average French household when faced with the same environment. However, the composition of these calories would differ. The simulated change is mostly due to price differences. In contrast, when we simulate the average US household’s food basket with UK product attributes this has a substantial impact on reducing calories, whereas changing relative prices in fact increases calories. From these findings we conclude that the economic environment makes a substantial difference on the consumption basket. However, in general, it is the interaction of preference, prices and attributes that explains the cross country differences.

I find these results interesting because there are many Americans who seems to subscribe to a view that the French have some kind of moral superiority when it comes to food and weight.  I read these results to say that the French are, in large part, just responding to the economic incentives they face.  And while they consume fewer calories than we do, it isn't all that clear they're better off given that they must pay more for many of the foods they desire than do Americans. 

I'm in Italy for the next two weeks. I wonder what I'll eat differently due to differences in food prices and availability?