Foresight on Food Politics

Foresight on Food Politics: Will pork prices feel the effect of tighter antibiotic controls?

Will antibiotic bans break the piggy bank?The U.S. Food & Drug Administration announced in mid-December it planned to issue a final set of guidelines that would eventually end the ability of farmers to use most animal drugs marketed in this country for improving how fast and how efficiently animals grow.

Because as many as nine out of 10 U.S. hog farmers use antibiotics at some point, according to USDA survey data—and 43 percent of those farmers say they use antibiotics specifically for the purpose of helping animals grow better--a soon-to-be-published study in the American Journal of Agricultural Economics predicts ending such use of antibiotics has the potential to make a financial impact on hog farmers and the pork market.

USDA economists Nigel Key and William McBride use data from the 2009 USDA Agricultural Resource Management Survey of feeder-to-finish hog producers—those farmers who buy pigs shortly after weaning at about 3 weeks old and then raise them to final weight—to estimate the potential effects on overall hog output and the variation in output that could result from banning antibiotics to promote growth.

Their results estimate that such use of antibiotics—often referred to as “sub-therapeutic use”—has a small positive effect on productivity and production risk, increasing output by 1 percent to 1.3 percent, while reducing the variation in output by 1.4 percent. Farmers could expect to immediately lose those productivity improvements should sub-therapeutic antibiotics be banned.

Although that percent change in productivity may seem minor, given the amount of controversy the practice endgnders in the media and the public, local grocers may be able to relate to the potential impact it would have on individuals because farmers, like grocers, operate on narrow margins. The researchers note that the average feeder-to-finish hog farmer had an average net return of only about 11 percent of sales in 2009--the year from which their data came. That means, assuming no change in prices for his hogs, an independent farmer forced to stop using sub-therapeutic antibiotics could be expected to see his income drop by about 10 percent, depending on how much he was paying for the antibiotics that were no longer being used. Even non-independent hog farmers—those who grow hogs owned by large corporations under contract, typically for a set payment per head of hog delivered—would also likely face losses. Because many are paid a bonus or on an incentive basis for delivering hogs at a standard weight and variability, the loss of ability to use those antibiotics would likely reduce the amount of pork they get paid for at their end of their contracts.

Because it would likely reduce pork supplies, at least temporarily, a national ban on sub-therapeutic antibiotics would likely result in higher hog prices, which would have the potential to impact the grocer. Ironically, the group most likely to suffer most from a ban on growth-promoting antibiotics would be the small share of farmers who currently earn a premium from marketing their hogs as “antibiotic-free.” Among the 16.3 percent of feeder-to-finish operations who said they used no antibiotics of any kind, about 15 percent reported receiving a price premium for not using antibiotics. Those growers would likely see the premium for their marketing trait evaporate overnight with the ban on the practice.

The USDA researchers caution that some limitations of their study design make it likely they have not captured the full potential impact of an antibiotics ban. For instance, they did not account for any downstream costs that might affect the processors by the expected decrease in the uniformity of hog size, which is known to slow down production lines. In addition, they did not estimate any impact on operations that handle newborn and newly weaned pigs. If the experience among European hog farmers when that continent banned the practice is any indication, the impact would be much larger for those operations. The resulting impact on pork supplies and the cost to the grocer would also likely be larger.

Foresight on Food Politics: Senators ask EPA to 'listen' to Nebraska on energy issue

Nebraska senators ask EPA to listen regarding coal

Nebraska senators Mike Johanns and Deb Fischer sent a public letter to U.S. Environmental Protection Agency Administrator Gina McCarthy this month requesting EPA ensure its "listening sessions" regarding the administration's proposed carbon regulations include citizens, businesses and farms. The Nebraska senators say the regulations would harm all those groups.

"We all want a cleaner environment," Johnanns said in his release statement regarding the letter, "but this Administration is blind to the economic consequences their anti-coal agenda is having on rural America."

"These regulations will drive up costs for every Nebraska farmer and rancher, business owner and manufacturer, and family each time they turn on the lights. I've told EPA about the economic hardships they are causing. It's time they hear it straight from Nebraskans," he said.

Meanwhile, the two Nebraska senators also joined a bipartisan group of 16 senators last week to meet with administrator McCarthy to urge changes to the proposed Renewable Fuel Standard 2014 rule. The delegation argues EPA's proposed rule would hurt the biofuels industry by lowering the biodiesel target below current industry production levels and reduce the total biofuels target by over a billion gallons, discouraging investment and hurting jobs and rural communities across the country. The EPA's proposed rule would set the biodiesel target at 1.28 billion gallons, which is below current industry production levels of around 1.7 billion gallons. It would also reduce the total biofuels target to 15.2 billion gallons--1.34 billion gallons below the 2013 target of 16.55 billion gallons, and almost 3 billion gallons below the 2014 statutory target of 18.15 billion gallons.

Foresight on Food Politics: Healthier Eating through Food Stamps... True?

New USDA study raises questions about the legitimacy of promoting food stamps to improve consumers' healthy eating

Do food stamps really lead to healthy eating?As Congress considers appropriations for the farm bill, which funds the Supplemental Nutrition Assistance Program--even while USDA reports a record 48 million Americans have now joined participation in the program--advocates actively and vocally champion the value of the food stamps program. USDA argues SNAP is not only the “largest program in the domestic hunger safety net,” but it also helps low-income families in making food choices that help them meet dietary guidance for health.

"SNAP is important beyond alleviating hunger," argues the non-profit anti-poverty activist group Nebraska Appleseed. "It aids in improving nutrition and health, especially among children, by increasing access to healthy and nutritious foods including fruit and produce."

But does it?

Researchers in collaboration with the Economic Research Service of USDA in 2004 conducted a sweeping review of the existing scientific literature on that question. Examining a wide range of diet-related outcomes for studies published between 1973 and 2002, they found little evidence of any significant association between SNAP and individual dietary intake. A few studies did find the program is associated with improved nutritional intakes; however, a few have also likewise found similar association with poorer nutritional intake.

In an attempt to try to help settle the question, USDA just released a new detailed study that looked at the Healthy Eating Index scores for adults in low-income households that do and do not participate in SNAP. The study also tried to go further by attempting to tease out the confounding effects that could impact not only the HEI for different groups not related to food-stamp use, but also which might affect their tendency to enroll in the food-stamp program in the first place. You can read the entire report here.

As with the 2004 review, the researchers once again conclude the evidence as to whether SNAP participation either benefits or harms the quality of participants' diets remains largely inconclusive. However, some important points do emerge from the work:

  • After the effect of food-stamp participation, observed characteristics of the groups and unobservable factors were statistically accounted for, they showed SNAP participants actually do marginally worse on total HEI than comparable nonparticipants: about 1.25 points lower, or about 2.5 percent of the group average. In terms of dietary components, this difference amounts roughly to a half a cup of fruit, two-thirds of a cup of vegetables, or 1.33 ounces of whole grain products. With the exception of saturated fat and sodium intake, scores for all of the HEI components were actually worse for SNAP participants than nonparticipants, although most by just small fractions of a point.
  • The study did find SNAP participation increases the likelihood that participants will consume whole fruit by 23 percentage points; on the downside, it also induces participants to decrease their intake of dark green or orange vegetables by a modest amount— the equivalent of about 1 ounce for a 2,000-calorie diet. The authors theorized that the effect could be the result of both time constraints associated with SNAP’s work requirements and extra income—that is, people participating in SNAP may see whole fruit as more affordable with a little extra income, and they may eat more of it because it requires no preparation time. At the same time, dark green/orange vegetables could be less attractive to SNAP participants because these foods may require more preparation time.
  • Based on the statistical breakdown of their results, the authors suggest it's probably unrealistic to argue that enrolling people in SNAP incrementally improves their HEI score. It's more likely that any improvements are made by shifting them from one consumer category into another. In other words, it likely causes a non fruit eater to become a marginal fruit eater; a marginal fruit eater to become a fruit eater at the daily recommended amount.

Getting an unbiased estimate of the effect of SNAP on diet quality is a difficult task, the authors caution. It is reasonable to believe households that choose to participate in SNAP have differences compared to similar low-income households that don't enroll--differences that could affect their quality of eating regardless of being enrolled in SNAP. For example, households that participate in SNAP might value food and nutrition more than similar households that don't. Those confounding factors make any question of how to alter the program (for instance, by lobbying for their increased use at farmers markets) without reducing its effectiveness a difficult question, one that warrants further research.

Foresight on Food Politics: Would 'Sin Taxes' Really Work? Some Surprising Research Findings

In today's quest to cure the general public of its presumed food-related health issues like obesity, diabetes and heart disease, the "natural public policy imperative," according to a pair of New York marketing researchers, is to use policy that can "nudge" consumers from buying and eating unhealthy food toward the healthier food options policy makers decide to be more appropriate. In the eyes of advocates like Yale University professor Kelly Brownell, for instance, who sees the path to healthier food choices as no different than the path to a tobacco-free world, the solution is as simple as having the political will to add surcharges and subsidies on sinful foods to promote healthier food consumption behavior.

Although that economically driven incentive system may be clear, it is far from simple, according to an upcoming study soon to be published:

A team of researchers led by North Carolina State economist Chen Zhen directly tested whether the idea that forcing consumers to pay more for sugar-sweetened drinks will encourage them to lose weight because they drink less holds true in the real world, where policy often ignores the practical fact that shoppers may simply switch an artificially inflated "sinful food" for a cheaper one nearby on the shelf. Zhen notes existing research has found little to no relationship between existing tax rates and body weight. It shouldn't come as a surprise, he notes, because current taxes on soft drinks designed to raise revenue rather than cut caloric consumption are trivial in comparison to those taxes that are designed to impact behavior, particularly tobacco taxes. Meanwhile, he notes, estimates of the impact tobacco-scale taxes might have on soft drink consumption do suggest they would reduce consumption; however, they haven't taken into account consumers' ability to simply switch to other non-taxed, high-calorie foods.

To attempt to do that, Zhen and others used a sophisticated demand-estimation model looking at household Nielsen Homescan consumer purchase panel data. They modeled household purchases of a set of 23 food and beverage categories, including three major sugar-sweetened beverage categories--soft drinks, energy drinks and juice drinks--attempting to simulate the effects of a half-cent per ounce increase in their price. In addition to the change in drink consumption and calories consumed, they also modeled the expected change in fat and sodium.

The result? Across households of all incomes, about one-half of the reduction in drink calories a price increase would result in would be offset by increases in calories from other foods and beverages. Although a price increase would be expected to lead to a net reduction of 7.9 kilocalories per capita per day, it would increase daily per capita fat and sodium intakes by 0.2 g and 49.8 mg, respectively. The increase in the price of sugar-sweetened drinks also would be expected, according to the model, to lead shoppers to drink less milk, less 100-percent juice, and less bottled water, even as it would induce an increase in diet soft drinks.

Bottom line: Ignoring the cross-effect of a sin tax on soft drinks on other foods means policy makers could be overestimating the effect of such a tax on overall calorie reduction by over 100 percent on average. In addition, a "back of envelope" calculation in the overall welfare loss for low-income households caused by such a tax is about $5 per household per year more than high-income households because low-income households reported higher sugar-sweetened drink purchases. This difference in welfare loss between low- and high-income households reinforces another ugly reality of the sin tax: It's a regressive tax that hits the poor relatively hardest, at least in the case of sugar-sweetened drinks.

Foresight on Food Politics: A Brief Who's Who? of Food-System 'Stealth' Critics

They can be hazardous to your longterm business health. Look carefully behind the agendas of some of these “pro-food” groups

Ever since both the Governor and several Nebraska farm organizations pronounced the group persona non grata in the state, the Washington-based Humane Society of the United States has taken most of the heat for activism against traditional agriculture. However, behind HSUS lies a whole second tier of activists with much broader aims than ensuring safe and healthful food, who have successfully grafted their political agendas to the food-system movement. Before grocers and farmers ally with these groups to improve food access and react to perceived “consumer demand” for system improvements, it’s important we consider: Do they really hold your interest at heart?

Center for Science in the Public Interest

The grand-daddy of “science-based” criticism of many foods and food-systems practices, CSPI has a long, dubious track record of lobbying for cost-boosting food-service regulations, including banning trans fats, regulating salt as hazardous, mandating nutrition information on menus, and restricting youth access to vending machines.

Institute for Agriculture and Trade Policy

Founded in 1986 to oppose industrial agriculture and technology, IATP lobbies U.S. companies to limit trading to organic foods, like “Peace Coffee,” (in which, coincidentally, the group’s principles have had a financial interest). The group has been a vocal critic of crop biotechnology.

Community Food Security Coalition

This coalition of more than 300 organizations lobbies for local regulation and policy developments that encourage “social and economic justice, anti-hunger, environmental, community development, sustainable agriculture, community gardening and other fields.” In practical terms, these local councils often involve themselves in city hall and state legislatures, direct farmers market activities, farm-to-school provisioning and other marketing channels that bypass the traditional supply chain. “We seek to develop self-reliance among all communities in obtaining their food and to create a system of growing, manufacturing, processing, making available, and selling food that is…grounded in the principles of justice, democracy, and sustainability,” according to the Coalition’s mission statement.

PEW Charitable Trusts and Johns Hopkins’ Center for a Livable Future

The $6 billion charitable behemoth PEW Trusts has contributed more than $1 billion to several activist environmental groups over the past decade, including $3.4 million to the Johns Hopkins University-affiliated Center for a Livable Future. This critic of all agriculture except small-scale and “urban” farming also supports the “Meatless Monday” campaign to scare consumers into cutting — even eliminating — their meat purchasing for at least one day every week.

Global Resource Action Center for the Environment

GRACE targets not only modern agriculture through it’s “Factory Farm” project, but also traditional energy production and internal combustion automobiles as being too favorable to “corporate profits.” GRACE has mastered the tactic of mobilizing local groups to protest and to lobby regulators. It also urges consumers frustrated with slow progress by their supermarkets in offering “local” food to apply the same pressure to them..

Environmental Defense Fund

Though the 300,000-member environmental- activist group dresses itself up as a “partner” in helping businesses improve their sustainability, many of its dictates are painfully costly to small business, such as the recent restrictions on diesel-driven generators many supermarkets rely upon.

Have a question about any of these groups? Leave it in the comments section below, and we'll find an answer.



Supported by the Nebraska Corn Board

The Nebraska Corn Board, on behalf of 23,000 corn farmers in Nebraska, invests in market development, research, promotion and education of corn and value-added products. The board aims to work closely with the farmer-to-consumer food chain, to educate everyone about the role corn has in our everyday healthy lives. The Nebraska Corn Board is proud to sponsor the Farmer Goes to Market program to help bring its mission of expanding demand and value of Nebraska corn to the consumer, through the strongest touch point in that chain: the Nebraska retail grocer.

In patnership with the Nebraska Grocery Industry Association

The Nebraska Grocery Industry Association was formed in 1903 by a group of Omaha grocery store owners, wholesalers and vendors to allow them to promote independent food merchants and members of the food industry, and to promote education and cooperation among its membership. NGIA continues to represent grocery store owners and operators, along with wholesalers and vendors located throughout Nebraska, by promoting their success through proactive government relations, innovative solutions and quality services. NGIA offers efficient and economical programs. NGIA also lobbies on both a state and national level, ensuring that the voice of the food industry in Nebraska is heard by our representatives.

Supported by the Nebraska Farm Bureau

The farm and ranch families represented by Nebraska Farm Bureau are proud sponsors of the Farmer Goes to Market program. We take great pride in supporting Nebraska's agricultural foundation. A key part of that effort is to make sure we produce safe and affordable food. This newsletter is an important part of our effort to connect the two most important parts of the food chain -- the farmer and the grocer -- with the goal of increasing consumer awareness and information about how their food is raised in Nebraska.