A food producing machine

Imagine a biologist on an excursion in the Amazon looking for new plant species.  He comes across a new grass he's never seen, and brings it back home to his lab in the U.S.  He finds that the grass grows exceedingly well in greenhouses with the right fertilizer and soil, and he immediately moves to field trials.  He also notices that the grass produces a seed that durable, storable, and extraordinarily calorie dense.  The scientist immediately recognizes the potential for the newly discovered plant to solve global hunger problems and to meet the dietary demands of a growing world population.

But, there is a problem.  Lab analysis reveals that the seeds are toxic to humans.  Despite the set-back, the scientist doesn't give up.  He toils away year after year until he creates a machine that can convert the seeds into a food that is not only safe for humans to eat but that is incredibly delicious to eat.  There are a few downsides.  For every five calories that go into the machine, only one comes out.  Plus, the machine uses water, runs on electricity, burns fossil fuels, and creates CO2 emissions.  

Should the scientist be condemned for his work?  Or, hailed as an ingenious hero for finding a plant that can inexpensively produce calories, and then creating a machine that can turn those calories into something people really want to eat?  

Maybe another way to think about it is to ask whether the scientist's new product can pass the market test; can his new food - despite it's inefficiencies (which will make the price higher than it otherwise would be) - compete against other foods in the marketplace?  Recall, that the new food must be priced in a way that covers the cost of all the resources it uses - from the fertilizer to grow the new seeds to the gasoline required to run the new machine.

Now, let's call the new grass "corn" and the new machine "cow".  The analogy isn't perfect (e.g., the cow is a living-feeling being and not a lifeless machine), but the thought experiment is useful nonetheless.

It's particularly useful in thinking about the argument that corn is "wasted" in the process of feeding animals.  It is one that appears - in one form - in a recent paper in Science.  West et al. write:

“Although crops used for animal feed ultimately produce human food in the form of meat and dairy products, they do so with a substantial loss of caloric efficiency. If current crop production used for animal feed and other nonfood uses (including biofuels) were targeted for direct consumption, ~70% more calories would become available, potentially providing enough calories to meet the basic needs of an additional 4 billion people (28). The human-edible crop calories that do not end up in the food system are referred to as the “diet gap.””

I'm not sure the logic of this sort of argument adds up.  

Unlike my hypothetical example, corn is not toxic to humans (although some of the grasses cows eat really are inedible to humans).  Nevertheless, few people really want to eat the calories that directly come from corn or other common animal feeds like soybeans.  

So, why do we grow so much corn and soy?  They are incredibly efficient producers of calories and protein.  Stated differently, these crops (or "grasses" if you will) allow us to produce an inexpensive, bountiful supply of calories in a form that is storeable and easily transported.  

The assumption in the quote of the Science article seems to either be that the "diet gap" will be solved by: 1) convincing people to eat the calories in corn and soy directly, or 2) that there are other tasty-edible crops that can be widely grown instead of corn and soy which can produce calories as efficiently as corn and soy.  Aside from maybe rice or wheat (which also require some processing to become edible), the second assumption is almost certainly false.  I'm also skeptical about the first assumption - that large swaths of people will voluntarily consume substantial calories directly from corn or soy.

What we typically do is take our relatively un-tasty corn and soy, and plug them into our machine (the cow or pig or chicken) to get a form of food we want to eat.  Yes, it seems inefficient on the surface of it, but the key is to realize the that the original calories from corn and soy were not in a form most humans find desirable.  As far as the human pallet is concerned, not all calories are created equal; we care a great deal about the form in which the calories are delivered to us.

The grass-machine analogy also helps make clear that it is probably a mistake to compare the calorie and CO2 footprint of the corn directly with the cow.  I suspect only a very tiny fraction of the world's caloric consumption comes from directly consuming the raw corn or soy seeds.  It takes energy to convert these seeds into an edible form – either through food processing or through animal feeding. So, what we want to compare is beef with other processed foods.  Otherwise we're comparing apples and oranges (or in this case, corn and beef).

Hormones in Soybeans and Beef

About 90% feedlot cattle in the US are administered some type of growth hormone to promote growth.  Use of the hormones convey economic benefits to consumers (lower prices) and a host of environmental benefits (more meat using less land, less water, less C02).  The biggest drawback, from my perspective, is the evidence that use of such hormones reduces the eating quality of steaks, particularly by reducing tenderness.  

While reduced tenderness might be a reason to eschew hormones, food safety isn't.  Some people are worried about the health effects of these hormones, but such concerns do not mesh well with the scientific literature, and the concerns tend to ignore relative risk.  Specifically, there are much higher levels of naturally occurring hormone-like substances in many foods we eat.

As a result, there have been many attempts to communicate this information to the public.  Examples of such discussions appear at BeefMyths.org, US Meat Export Federation, the NCBA, and extension facts sheets from Michigan State University, University of Nebraska,University of Georgia, and many others.  

A common approach is to compare the extra amount of estrogen in a serving of beef from an animal that has received a hormone implant to one that hasn't, and then compare that to estrogen-like substances in other foods like soybean oil (it is a comparison I've made myself in a study on the effectiveness of such communication), cabbage, peas, and potatoes.

After making this comparison in a talk a couple weeks ago, an audience member gently questioned my numbers on soybean oil.  While it is true that soybeans have high levels of isoflavones, which acts like estrogen in humans, it turns out that these compounds are not in soybean oil.  

Here is a publication from the USDA Ag Research Service showing the isoflavone content of a long list of foods.  As you can see, soybeans have quite a bit, but if you'll look down on page 38, you'll find soybean oil listed in a table titled "List of Foods Containing Zero Values for Isoflavones."  This website neatly summarizes the USDA data.

So, where does that leave us.  First, those that have used this comparison should try to correct the record (as I'm doing here).  If we are arguing that the public should make decisions on "the facts," we darn well better get our facts straight.  Second, the relative hormone comparison remains useful (though only marginally persuasive with most consumers), but one needs to drop soybean oil and use other soy products instead.  An Iowa State University Fact's Sheet by Dan Loy helps make the proper comparisons.

Here is a key screenshot

Why are beef and pork prices so high?

There continues to be a lot of interest among consumers and the media about the causes of high beef and pork prices we've witnessed in recent months.  It is a topic I touched on a couple months ago.  I pointed to drought, previously high corn-prices, disease, and other supply side factors like technology disadoption.  This piece in at the Atlantic blog says it can't be the drought and it is a result of consumer demand.  This short post at TIME.com, says China and Japan are partly to blame.  Chris Hurt at farmdocdaily says a lot of it is unexplained.

So, what's going on?  Here is data from the Bureau of Labor Statistics, on retail meat prices (May is the last month they report).

Starting in mid 2010, prices ($/lb) for steak and ground beef started increasing, as did prices for bacon.  They swung sharply higher in the most recent months. Pork chop prices were more steady, only noticeably increasing in April and May.  Prices of boneless chicken show no apparent trend.  

The above graph shows prices in nominal terms, but when looking at a 10-year time period it might also be useful to look at the data in real (inflation adjusted) terms, as I've done in the following graph.  The general trends remain the same, except notice that in real terms, chicken breast prices have been falling, and sirloin steak prices are lower today than they were in 2004. Others, like ground beef and bacon, are higher today than they were a decade ago even after accounting for inflation.

These effects also trickle down to the markets for cattle and hogs.  For example, here is data from the Livestock Marketing Information Center (LMIC), showing that prices for slaughter cattle are today far above where they were last year or in the previous six years.

The data seem pretty clear that a lot of the price pressure results from tight cattle supplies.  Here's data from the LMIC on the cattle inventory (the total number of cattle in the US).  We have fewer cattle in the US today than was the case in the 1950s.

The same broad trend isn't necessarily true for pork, but one can see from the graph below that there is a downward trend in pork inventory since 2008, and noticeably lower supplies this year in 2014.

Holding all else constant, lower supplies will mean higher prices (with less meat around, there is increased competition for existing supplies, and people bid up the price of meat).  So, that pushes the question back on step.  Why are there are lower supplies?

I'm going to stick with my answer from a couple months ago:

“Contraction in cattle supplies can be explained by a number of factors, such as drought in the plains states that limited the amount of grass and hay available and higher feed (mainly corn) prices due to drought, ethanol policy, etc., which pushed pushed more cattle to slaughter several years ago, leading to smaller inventories today. Feed prices have now come down off their highs but cattle prices are still rising, partially because producers are holding back breeding stock to rebuild inventory.”

Yes, corn prices are today lower, but it is important to note the lags in production for cattle, and to a lesser extent pork, and to a much lesser extent poultry.  Let's say you're a cattle rancher back in 2008 and you're facing much higher corn prices and drought that limits forage and hay to feed.  What do you do?  You start selling off part of your herd.  As other ranchers make the same decision, prices initially fall but then start climbing.  Then, in 2013 corn prices start falling and drought conditions subside in many parts of the country.  So, you can feed cattle, but you don't have any excess sitting around.  In fact, if you want to capitalize on higher beef prices, you might have to forgo current profits for future profits and hold back some of your female breeding stock (further tightening supplies).  It might be another year till that new heifer is pregnant, another (almost) year till a calf is born, and another year and a half or so until you've got an animal that finally goes to the dinner table.  Of course, what I'm describing is just the biological production lag that often leads to cattle and hog price cycles.  This kind of cycle doesn't much occur with poultry because flock sizes can be changed relatively quickly, and that might explain why in the above graph, the price of chicken has been much more stable.  (On the pork side, the porcine epidemic diarrhea virus, PEDv, is also partially responsible for the smaller inventories). 

What about other explanations that are often presented for the price increases?  I agree that consumer demand remains steady, something we've found in our Food Demand Survey (FooDS).  But, it isn't increasing.  You'd have to have increasing demand for consumers to be responsible for higher prices.  

What about consumers in other countries?  Exports?  Here is data from the US Meat Export Federation on beef exports:

There was been a sharp rise in exports from 2004 to 2011, but recall that the retail price spikes we've seen started in around 2010, and over this time period, the volume of beef exports is relatively flat.

According to USDA, we only export about 10% of the value of beef produced, and much of this is North American trade between Canada, US, a Mexico.  There was a 19% increase in the volume of beef exported from 2009 to 2010 and a 20% increase from 2010 to 2011, but then a 12% reduction from 2011 to 2012 and only a 3% increase from 2012 to 2013.  China significantly increased US beef imports from 2012 to 2013, but other countries like Japan, Mexico, and Canada import more volume than China, and in fact the volume of beef imported increased more from 2012 to 2013 for Japan than for China.  So far this year, Chinese imports are down compared to last year.  [Addendum: it was brought to my attention that export data to China is shaky since the Chinese have not officially approved US beef imports; as a result, a lot of our exports to China flow through other countries, making these stats a bit difficult to interpret].  It should also be noted that we import as many lbs of beef as we export each year.  All considered, I don't see foreign demand as the driving factor in the recent run-up in beef prices.

Ultimately, the old adage is likely to hold: the cure for high prices is high prices.  The high meat prices we're seeing today will eventually encourage larger beef and pork supplies, which eventually will put downward pressure on prices.  When will that day come?  Sooner for pork than for cattle.  If you've got a better answer than that, you can prove it by getting in the market. 

Cost of Calories and Protein from Meat

Yesterday I gave a talk for some of the world's largest pork producers as part of an event put on by PIC, the world's largest supplier of pork genetics. 

In my presentation, I touched briefly on the environmental impacts of meat production, and showed the following slide, which made the rounds on Twitter yesterday.

I thought a few points of clarification and expansion were in order.  

First, note that Bailey Norwood and I published a paper a few years ago comparing the costs of producing different meats to producing corn, soybeans, wheat, and peanuts (also note that there was a calculation error in the tables; the corrected tables are here). As we show there, it is generally less expensive to get calories or protein from corn or soybeans or wheat than it is from cattle or hogs.   That's one reason we grow such much corn, wheat, and soy - they are incredibly efficient generators of calories and protein.  

I will also note that there have been many attempt to calculate the retail cost of eating "healthy vs. unhealthy" food.  Here, for example, is a paper by the USDA-ERS.  Adam Drewnowski also has several papers on this subject.  This work often shows that meat is relatively  (relative to many fruits and vegetables) inexpensive on a per calorie or per gram of protein basis, although meat looks more expensive when placed on a per pound basis.   If you want really inexpensive calories eat vegetable oil or crackers or sugar; if you want real expensive calories, eat zucchini or lettuce or tomatoes.

The reason I picked lettuce as an example is to make the point that people often do not reason consistently when they argue we should unduly focus on costs of calories.  I have never once heard anyone say how "inefficient" production of lettuce or tomatoes or peppers are, and yet I have repeatedly heard this argument about meat.  

Another important point is that efficiency or cost isn't everything.  What do we get in return?  Who cares if lettuce is really expensive on a $/kcal basis?  A nice salad is tasty.  And healthy.  The trouble is that many of our most efficient producers of calories or protein (field corn, soybeans, wheat) are not that tasty by themselves.  Given the choice to eat a raw soybean or a raw carrot, I'll take he latter any day despite the fact that the latter is "less efficient."  

This discussion reveals another point that Bailey and I discussed in our paper.  To get corn and soy and wheat into foods we like to eat requires processing, which takes energy and is costly.  Thus, one needs to look at the costs of the foods as we eat them not as they're grown.  And, there is generally much less cost wrapped up in the processing of meat and animal products than there is for grain-based products (based on the farm-to-retail price spreads reported by the USDA).

Finally, note that one of the ways we process corn and soybeans into something we like to eat is by feeding them to animals.  Animals convert relatively untasty grains into tasty milk, eggs, and meat.   And even if some energy is "lost" or "wasted" in that process, we're getting something in return.  Here's what I previously had to say about that:

Almost no one looks at their iPad and asks, "how much more energy went into producing this than my old Apple II." The iPad is so much better than the Apple II.  We'd be willing to accept more energy use to have a better computer.  Likewise a nice T-bone is so much better than a head of broccoli.  I'm willing to accept more energy use to have a T-bone than a head of broccoli.    

Do USDA Quality Grades Mislead Consumers?

If you've ever seen the words "Choice" or "Prime" advertising a cut of beef, then you've been influenced by the federal beef quality grading system, which is administered by the Agricultural Marketing Service of the USDA.  From "best" to "worst" the grades are Prime, Choice, Select, and Standard.  

In a paper forthcoming the Journal of Animal Science, Eric and Megan Devuyst and I report the results of a study revealing that the USDA beef quality grading system likely sends confusing and misleading signals to final consumers (which is exactly the opposite of the purpose of the grading system).

The key determinant of quality in current grading system is "intramuscular fat" - the amount of fat inside the muscle of the steak.  Steaks with more fat get higher grades, primarily because of the large amount of research showing that consumers prefer the taste of steaks with more intramuscular fat.

But, do consumers know this?  And do they understand the information communicated by the grade names? Based on results of two nationwide surveys (both with over 1,000 people), we believe the answers are clearly: "No".

Most people thought the grade name "Prime" was the leannest, while also expecting it to be juiciest.  When looking just at the pictures (the same ones shown above but without the names), most people thought the picture of the Prime steak would be the cheapest, and they were most likely to associate the picture of the Prime steak with the name "Select."  

Only 14% of respondents correctly ranked the grade names according to leanness, and only 14% correctly matched the pictures with the respective grade names.  That's worse than random guessing (16.67% would be correct just by pure chance given that people had to match three items).   

We conclude the paper with the following:

if the current grading system fails to adequately inform consumers of the relative quality of grades, there remains the likelihood that consumers’ expectations will be unmet. There are three potential methods for addressing this lack of understanding. First, the current quality grading system could be dropped in lieu of private or third-party systems. . . .Second, an educational program could be  developed to promote knowledge of the link between higher marbled beef and taste. . . . The costs of such an effort, however, are likely to be large, and it is unclear what effects they may have particularly when one realizes the existence of many prior educational efforts that have been undertaken in the 70 year existence of the Prime-Choice quality grade nomenclature. . . . Finally, consumers could likely benefit from more descriptive nomenclature. . . . for example, “USDA Prime—Higher Fat, Most Juicy,” “USDA Choice—Juicy,” and “USDA Select—Less Fat, Less Juicy.” 

You can read the whole thing here.