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Monday December 11, 2017

Are you complicit in selling fairy-tale farming?

Mercy For Animals, the nonprofit animal-rights group behind several recent undercover animal-cruelty videos, which Farmer Goes to Market has reported on, has officially called the match: Cage-free eggs are now inevitable.

In a blog post written nearly a year ago, the group"...dedicated to preventing cruelty to farmed animals and promoting compassionate food choices and policies," quoted the United Egg Producers president as conceding the U.S. egg industry now has no options but to go cage-free.

How did Mercy for Animals take UEP, over the course of less than a decade, from spending $10 million to fight California legislation requiring cage-free to agreeing to back a system nationally that it not only predicts will increase egg farmers' housing costs by two to three times, but also stands a good chance of actually making chickens less healthy, less productive and more stressed?

It did so by a strategically executed public-relations campaign characterized by the group's latest cinematic drama from late June. The footage, shot this spring by a hired MFA plant pretending to be a farm worker at Washington's Briarwood Farms, a supplier for egg distributor Eggland’s Best, edited together footage of people engaging in questionably cruel behavior with somber and brooding images of caged chickens, artfully gloomy background music and poetically suggestive narration. It all combines to further the group's constant narrative: The system of caged-hen production is unacceptable.

But had it simply stopped there, MFA may have convinced a hardcore fringe the food-animal system is unredeemable, but it wouldn't have turned it into a movement. Instead MFA leveraged a well-targeted and increasingly belligerent directed e-mail campaign against key members of the chain, including Nebraska grocers large and small, with the megaphone social media now provides and the willing support of the old-line press. It effectively named and shamed suppliers to large companies, who could then be pressured to announce changes, all in the name of giving consumers what they're asking for. Those announcements could then, in turn, be used to coerce smaller, less powerful retailers and food producers into submitting.

"Following pressure from caring consumers," the video narrator of the latest MFA video says, for instance, "many of the biggest companies in the world, including McDonalds, Kroger, Walmart and many others, committed to stop cramming hens in cages."

It worked.

In only a year's time, virtually the entire food chain has acquiesed. Publix, the fifth largest grocery store chain in the country, announced in mid July it plans to transition to 100 percent cage-free eggs by 2026. Hy-Vee and Price Chopper pledged similar progress in May by 2022 and 2025, respectively. The Independent Grocers Alliance, which represents over 1,000 retailers nationwide, joined the growing list , announcing, "It is our goal to source 100 percent cage-free eggs for IGA by 2025 based on available supply. IGA, its retailers and its wholesalers do not tolerate animal abuse of any kind, and we expect our suppliers to adhere to accepted industry standards."

Josh Balk, senior food policy director for the Humane Society of the United States, told TriplePundit that it has “fortunately become very difficult for major food companies to appear on the side of animal abuse, in this case, the cruel confinement of hens in tiny cages.” Among the benefits he cites: “It’s also good business sense to align policies with customer sentiment regarding animal welfare.”

Fortune's most recent, overly glowing profile of McDonalds' agonizing over going cage-free likewise places the ultimate driver at the feet of consumer demand: "...the movement in the U.S. is taking on a pace that many had never expected. 'It stunned me two years ago how we leaped over enriched to cage-free,' says Craig Morris, deputy administrator of the USDA Agricultural Marketing Service’s livestock, poultry, and seed program. 'It all goes back to consumer expectations of how food is produced.'"

But are consumers really behind it? Are grocers agreeing to an unrealistic make-believe farming system because they're being told by the media, old and new, that consumer pressure is driving the trend?

It is dangerous, accourding to Texas Tech ag economist Darren Hudson, to infer that supply-side manipulation says anything meaningful about what consumers are really willing to pay for. Hudson cites studies noting that when consumers who say they favor animal-welfare standards are asked if they still favor them when they actually cost them more, either in form of food price and taxes, their support significantly wanes. He considers the scientific literature supporting true economic impact of animal welfare to be "scant."

Despite what Mercy for Animals claims, the fact is economics research generally agrees that willingness-to-pay estimates are inflated. Often respondents tell surveyors they do want traits like cage-free based on their own hypothetical assumptions and their unwillingness to give the politically incorrect answer. Consumers may in fact be willing to put money on the counter for animal welfare, says Danish ag economics professor Laura Mørch Andersen, but so far it's only to a small degree. Her research supports the conclusion that stated willingness to pay "to a large extent is just cheap talk." Her work cautions retailers to consider the market for higher welfare products to be only a niche market, capable of attracting only certain consumer segments.

But perhaps the most compelling evidence that consumers say they want voluntary production constraints like Walmart's but won't pay for them comes from the biggest real-world experiment in such practices so far, says University of California at Davis economist Tina Saitone: organics. Study after study shows consumers routinely tell surveyors they will buy more organic foods at a price premium. Yet the market share for organic in the United States has remained stalled over the last decade at only about 3 percent of food sales. Saitone calls the difference between experimental studies and the real marketplace a "vast chasm."

Similarly, " most consumers want farm animals to be treated well," writes Oklahoma State ag economist Jayson Lusk. "But judging by shopping habits, they’re only willing to pay so much for hens’ amenities. The market share for affordable, cage-produced eggs (about 90 percent) dominates the more expensive, cage-free eggs (less than 10 percent)."

"There are many studies on consumer willingness-to-pay for non-GM, cage-free and more," Lusk tells Farmer Goes to Market. "And most of these surveys and experiments show most consumers are willing to pay something for such attributes.  The trouble is that these WTP values don’t often materialize in the marketplace.  When you look at grocery scanner data, for example, market shares for these sorts of products are typically very low. ...most consumers are not willing to pay the price premiums for non-GM, cage-free, organic, when they have to put their money where their mouth is." 

In further evidence, Lusk's monthly consumer-panel surveying in July asked 1,000 shoppers to choose from six different characteristics in random order that might influence their egg purchases. On average, price was most important when shopping for eggs, with 26 out of 100 points allocated to this issue on average across participants. Caged vs. cage-free fell almost 50 percent below price.

Do shoppers really want cage-free when they have to pay for it?

So consumers will have their cage-free eggs, whether they really demand them or not. But where will these top-down restrictions, and costly, demands on food production end?

Mercy for Animals' same blog post claiming victory in the egg battle points to the next frong: "While the egg industry may see the writing on the wall, the pork industry continues to oppose reform. National Pork Producers Council spokesman Dave Warner pledged that the group will fight [housing mandates]. Although more than 85 percent of U.S. pigs are currently kept in gestation crates, NPPC president-elect, John Weber, admitted that the status quo will change. 'In another 10 years that percentage is probably going to change significantly,' Weber said. 'I would predict longer term ... we'll be housing sows differently.'"

MFA's June video followed the same model of MFA's past works targeting not only poultry, but also pigs, milk cows, turkeys, veal calves, and even ducks. They all skillfully use isolated depictions of animal cruelty (some real, some implied or staged) by individuals to cinematically indict the wider system of intensive animal production or individual practices like caging hens, keeping pregnant pigs in individual stalls, beak-trimming to prevent cannibalism, or confined housing. Grocers can expect those targets to be next on their list.

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