Author of Meatonomics: How the Rigged Economics of Meat and Dairy Make You Consume Too Much—and How to Eat Better, Live Longer, and Spend Smarter
Americans consume almost 200 pounds of meat annually per person, more than almost any other people on the planet—and nearly twice what we ate 75 years ago.1 We also have twice the incidence of diabetes and heart disease as the rest of the world and almost three times the incidence of cancer. There is little doubt that, as this book’s many authors argue, we must reduce our meat consumption. Perhaps, like an engineer peering inside a motor to see how it works, we can explore the machinery of animal food production to learn why meat consumption levels are so high to begin with. If we can understand what makes Americans want to stuff a half pound of meat into our mouths every day, maybe we can find ways to cut those huge consumption levels.
As consumers, we like to think we make informed, well-founded decisions about what to buy. But when it comes to purchasing meat, new evidence shows consumers are routinely denied the ability to make such informed, rational decisions. Instead, government bureaucrats and industry players overwhelm consumers with a triple-whammy of price miscues, product misinformation, and aggressive manipulation. Like an invisible leash pulling us around by the neck, this set of influences literally changes our behavior and makes us buy more meat than otherwise. This essay looks at one of the most pernicious forces that drive people to consume animal foods in such huge quantities: artificially low prices.
The price of a McDonald’s double cheeseburger hasn’t changed much in two and half decades—it was $1 in 1991, and it’s just over $1 today. The prices of other consumer goods have increased substantially in that time. What keeps the price of meat so low?
The answer is externalized costs—a fancy term for a simple concept. Producers externalize their production costs when they impose them on society instead of bearing the costs themselves. Steve Wing, a University of North Carolina at Chapel Hill epidemiologist, expressed this phenomenon succinctly in a New York Times article published, serendipitously, the day I sat down to write this piece. “Pork is cheap and cheap to produce in large factories,” said Wing, “because they don’t pay for cleaning up the Des Moines water supply and they don’t pay for the asthma neighbors get, they don’t pay for polluting downstream water that used to be potable and they don’t pay for the loss of property values.” Couldn’t have put it better myself.
The rise of factory farming over the past half century has, increasingly, given meat producers the means to externalize their production expenses and impose them on the rest of us. In my 2013 book Meatonomics, I add up these costs and find they total more than $414 billion. To put this huge number in perspective, it’s about one quarter of Canada’s gross domestic product or half of what the United States spends on Social Security each year.
Here’s the rub: By massively externalizing their costs in this fashion, meat producers have been able to aggressively lower their products’ prices. Thus, on an inflation-adjusted basis, the retail prices of various kinds of meat have fallen dramatically in the past half century. Since 1935, steak prices are down 20 percent, ham is down 48 percent, and chicken is down a whopping 74 percent.
It’s hard to overstate the importance of a good’s price when it comes to a consumer’s decision to buy it or leave it. The most basic principle of economics, the law of demand, says that when a good’s price is low, we’ll likely buy more of it than if the price were higher. Pretty simple. But when it comes to meat prices, the result is shocking: Retail prices, pushed down to artificially low levels by producers’ externalizing most of their production costs, cause Americans to eat much more meat than we would if prices rose to their true levels.
How do we know that low prices are driving high consumption? Because hundreds of studies have shown that consumption of animal foods is closely linked to price. On average, for every 10 percent drop in meat and dairy prices, consumption rises by about 6.5 percent. Conversely, if prices rise by 10 percent, consumption falls by about 6.5 percent. There are lots of reasons people buy meat: beliefs, preferences, disposable income, force of habit, and other factors. But the data on price and consumption show that retail prices play an enormous role. As animal science professor Marta Rivera-Ferre notes, “consumer demand [for meat] is not linked with the actual biological needs of the human organism but with prices.”2
Now that we know why the market for animal foods is broken, we can also posit one easy way to fix it: Let meat prices rise to their true levels. For every dollar of animal foods sold at retail, another $1.70 is imposed on consumers and taxpayers in the form of externalized costs. This means that a $5 Big Mac really costs society $13. A $15 slab of ribs really costs $40. If the retail prices of these goods reflected their true societal cost, meat consumption would drop faster than you can say “tofu.”
There are lots of ways to add externalized costs back into the retail price of meat. We might eliminate government subsidies, impose a tax on meat, or use other legislative or regulatory measures to force producers to bear their fair share of costs. In fact, any activity that raises the price of meat will help shift Americans’ protein consumption to plant-based alternatives and would be a welcome step in the right direction. Most consumers want to act rationally. Let’s make that possible by giving ourselves the proper price cues to do so.