Currently browsing posts about: Price-of-food

USDA has changed the way it reports the country’s annual expenditures on the food system.  It has just released the Economic Research Service’s new food dollar report. As the report explains, it is designed to answer the question “For what do our food dollars pay?”

The USDA has a nifty way of presenting this information.  The first illustration identifies the distribution of the U.S. food dollar between farm and marketing shares.  The farm share is what goes to the farmer.  The marketing share is everything else that happens to a food between harvest and consumption.

What surprised me about this was the 15.8% farm share.  For those of you who keep track of such things, it was 19% in 2006.

But the USDA changed the methods for computing this figure.  Using the new methods, 15.8% is a 4% increase since 2006.  However this is calculated, less than 20 cents of a dollar spent on food is for the food itself.

The second illustration explains the distribution of the food dollar among ten industry groups involved in the supply chain.

Looking at the actual data series this way, farm and agribusiness accounts for only 11.6% of the dollar.  The big sectors are food processing (18.6%) and food service (33.7%).

From a health and sustainability standpoint, isn’t there something wrong with this picture?

Everyone seems to be worried about world food prices these days, apparently for good reason.

According to the World Bank, rising prices have pushed 44 million more people into poverty. Its Food Price Watch report for February does not contain much good news.

The USDA is projecting equally bad news for the prices of agricultural commodities.  These are expected to reach record levels through 2020.

Time Magazine says biofuels are a big factor in rising food prices.

And the United Nations is warning that climate change is the ultimate driver of this problem as well as other causes of world instability.

The good news is that all of this leaves plenty of things for food advocates to work on.  Get busy!

The FAO (Food and Agriculture Organization of the U.N. has just released its 2010 food price index.  Compared to 2002-2004, commodity food prices sharply increased, especially those of sugars and fats.

The new index is higher than in 2008 when people throughout the world rioted in protest.  It is also at the highest level recorded since the index began in 1990.

What’s going on?  In 2008, FAO explained the crisis as the result of the combined effects of:

• Competition for cropland from the growth in biofuels
• Low cereal stocks
• High oil prices
• Speculation in food markets
• Extreme weather events

I’ve discussed other possible explanations I’ve collected in previous posts.

This time, supply problems in grains, sugars, and meat are making the problemworse.  FAO experts are predicting that prices will go even higher this year.

High food prices are a disaster for the poor and are also a ticket to social disorder.   World leaders: get to work!

Added clarifications: It turns out that the FAO food price index is not inflation-adjusted.  Oops.  This means that the prices are not necessarily higher than they were in 2008. Nevertheless, food riots are already happening.  Ben Grossman-Cohen of Oxfam sends this report of such disturbances in Algeria, for example.

If you are wondering why the idea of soda taxes causes so much controversy, try this: research published in the Archives of Internal Medicine estimates that a $1.00 price increase on soda and pizza would reduce daily calorie consumption by nearly 200 per day and would help people lose weight.

Or, as USA Today puts it, an 18% increase in the price of soda would be associated with a weight loss of 5 pounds per year.

I received this note yesterday from Michael Jacobson, director of the Center for Science in the Public Interest, about his latest column in The Huffington Post:

How would you feel if you had to pay $8.50 a gallon for gasoline?

Then why on Earth would you pay that much for water and high-fructose corn syrup?

That’s how much Coke costs in those new 7.5-ounce, 90-calorie cans.  Calorie-counters may appreciate the small size (90 calories) but dollar-counters beware:  We did a little math and it turns out that Coke in the new can costs between 50- and 140-percent more than Coke in the old 12-ounce cans.  Basically, Coke is charging two or three cents more per ounce for Coke in a smaller can—and this from a company that throws temper tantrums when lawmakers propose a one-cent-per-ounce tax on soda!

I once asked a group of retailing executives why the cost of smaller size containers was so high (surely the containers don’t cost that much.  They said: “if customers want smaller portions they ought to be willing to pay for them.”  Oh.

I don’t usually take estimates of the cost of bad diets and obesity too seriously because they are necessarily based on multiple assumptions, none of them verifiable.  But I do like to collect them.  Here are two papers from the American Journal of Health Promotion estimating such costs.  One estimates the health benefits and savings in medical costs from diets reduced in saturated fat, sodium, and calories (a savings of $60-120 billion), and the other estimates cost savings and productivity increases for reduction in calories and sodium ($109-256 billion).  Whatever the real savings are, they are likely to be enormous.  And that’s just money.  It’s harder to put a value on quality of life.  Maybe that’s all we need to know at this point.

Yale’s Rudd Center for Food Policy has invented a Revenue Calculator for Soft Drink Taxes for estimating the amounts of money states and cities could raise from taxes on soft drinks.  You type in the state or city, estimate the size of the tax, decide what kinds of drinks it’s for, and push the  button.  Bingo.  California could raise about $1.8 billion a year from a 1 cent tax.

And the Department of Health and Human Service has hooked up with the Advertising Council for a new kids’ activity campaign on the Internet, this one using Maurice Sendak’s Wild Things tied in to a movie coming out in October.  I wasn’t so happy about the last such campaign, which featured Shrek and is still up on the site.  Shrek also advertises junk foods.  Maybe this one will work better?

Investigators at the Harvard School of Public Health estimated the toll of behavioral contributors to early mortality.  Obesity, they say, is the #3 cause of death after cigarette smoking and high blood pressure.

Dutch researchers say smoking is what kills people.  Obesity just leads to disability.

The Robert Wood Johnson Foundation says schools could do something to help prevent obesity if they got their act together.  It provides a guide to doing so.

Adam Drewnowski, my colleague and friend at the University of Washington, says: if you want to understand obesity, take a look at what poverty makes people eat.

And Jeffrey Friedman, an obesity researcher at Rockfeller University tells Nature that obesity is neither an epidemic nor a disease of lifestyle.  It’s all in the genes and in evolution.

I say (see What to Eat): eat less, move more, eat plenty of fruits and vegetables, and don’t eat too much junk food!

David Leonhardt’s column in the business section of today’s New York Times, takes on soda taxes.  It’s starting point is the New England Journal of Medicine article (see earlier post) by Kelly Brownell at Yale and New York City Health Commissioner Tom Frieden, the newly appointed head of the Centers for Disease Control and Prevention .  Leonhardt notes that such taxes are Pigovian (after the economist Pigou): they discourage unhealthful practices and encourage healthful ones.  As he puts it, “In coldly economic terms, you can make a case that calories are the single best candidate for a Pigovian tax.”

Leonhardt finds arguments for soda taxes compelling.  He tried, but could not get any soda company executive to speak to him about them (why am I not surprised).

I’m intrigued by the accompanying illustration.  In the last ten years, the cost of fruits and vegetables has gone way up.  The cost of sodas is way down.  Isn’t something wrong with this picture?  Isn’t now a good time to try to fix it?

Update June 3: Editorial in the New York Times: “While we wait [for bigger fixes], Congress could impose an excise tax on sugary drinks – one of the main culprits in the obesity epidemic.”