?STICKER SHOCK??STICKER SHOCK Rapidly increasing meat prices threaten to fundamentally alter the American diet ?? ?In 1917, in Russia, the cost of food skyrocketed to four times what it had been just three years earlier, in 1914. The causes were several 每 the disruptions of World War I, runaway inflation, hoarding by farmers who were trying to protect their livelihoods, etc. 每 but the consequences were decisive. After decades of economic erosion while the czars and their cronies draped themselves with ostentatious wealth, the peasantry finally had had enough. Lenin and Trotsky may have given words and a political programme to the discontent, but it was an empty stomach that put the Russian common man into the streets and gave him a taste for revolution. Proving that little has changed, Bruce Springsteen wrote, in his 1995 song ※The Ghost of Tom Joad,§ about the desperate power a man is given when ※You got a hole in your belly and a gun in your hand.§ Driven to Vegetarianism? Anti-meat organizations might hope to change the American diet with emotional or philosophical arguments, but history demonstrates time and again that economics is nearly always the most powerful force governing food choices. And in the U.S. today, the rapidly rising cost of food in a prolonged period of economic recession and high unemployment threatens to alter the American diet in a way no vegetarian might imagine. Meat could become a luxury 每 and so could everything on the table but the commodity staples. For example, in just a single month this year, February, wholesale food prices rose nearly four per cent, ※the largest increase on record for one month since 1974,§ reported the New York Times. The cost of meat is rocketing upward at an especially steep angle. Comparing prices in March 2011 to March 2010, the cost of bacon is up 16 per cent, the cost of beef and veal are up 12 per cent, and pork is up 11 per cent, according to data compiled by the U.S. Bureau of Labor Statistics. (The overall inflation rate across those 12 months was 2.7 per cent.) The Consumer Price Index, which the U.S. Department of Agriculture uses to report and forecast food prices, is a bit more conservative, but only a bit: The CPI reported in September that beef prices had increased more than 10 per cent since September 2010, and pork had gone up 7.5 per cent. Significantly, the CPI noted an 11.5 per cent increase in the price of ground beef. Beef trimmings from fed cattle 每 the basic raw material for ground beef, which comprises more than half of all beef sold in the U.S. - reached US$120 per hundredweight in early November, a record price. According to the latest Daily Livestock Report from the CME Group, the price of 50/50 trimmings is up nearly 45 per cent from a year ago, and the cost of 90/10 trimmings is up more than 20 per cent. At the livestock level, cattle prices in 2012 are projected to increase another 10 per cent over 2011 as cattle numbers decline. At a projected 32.4 million head, U.S. beef cattle numbers in 2012 are expected to be down 4.2 per cent compared to 2011 每 and that＊s after the total U.S. cattle herd has already shrunk down to its smallest size since 1958. U.S. consumers have already shifted from more expensive whole-muscle cuts to ground beef, the industry＊s cheapest product, so if ground beef prices rise beyond reach for an increasing number of consumers, many will be forced to give up beef altogether. That will cause further herd shrinkage, which in turn will force prices still higher. Cost and Decline But more than simple supply and demand are at work in the market for U.S. meat. Higher prices for fuel and feed (the latter driven in part by federal ethanol policy, which has pushed corn prices to record highs) have increased the cost of production. So has worldwide demand for food. Due in large part to increasing demand from the burgeoning economies of China, India and other once poor but now thriving, populous nations, the cost of food worldwide rose 37 per cent from February 2010 to February 2011, according to a report issued by the U.N.＊s Food and Agriculture Organization, although since then prices have leveled somewhat. But worldwide meat prices remain stubbornly high, up 12 per cent overall in a year, reports the FAO. ? Meanwhile, meat consumption in the U.S. has been in a steady decline for at least five years. Agricultural economist Paul Aho notes that between 2007 and 2012, U.S. per capita consumption of red meat and poultry together will have declined by 17 pounds 每 but the bulk of the drop is due to declining red meat consumption, which has dropped 15 pounds since 2007. ※To find a decline of similar magnitude you have to go back to the early 1970s with the oil embargo, recession, and grain crisis,§ he commented in a recent report. All of this news comes at a time when, traditionally, the red meat industry is banking profits from the summer barbecue season and looking forward to increased sales of high-end items such as prime rib as the nation heads into the holiday period. But already, the Americas Research Group, in a survey of U.S. consumers, found that more than a third of those consumers surveyed say that rising food prices will cause them to cut back on holiday food spending. For many Americans, Christmas dinner this year will look more like the meager meals at poor Bob Cratchet＊s and less like the feasts at Fezziwig＊s. ? Back to Basics These are hard shocks to the U.S. meat economy, and the forces behind them are of a size and strength to fundamentally alter the American diet.? In the early years of the 20th century, meat was a mainstay of the American diet, and pork was the favorite. Culinary researcher Lynne Olver lists veal, steak, roast beef, hamburger, ham, oysters, clams, flounder, mackerel, codfish and shad as typical spring menu items for an American family in 1908 每 much of it home-grown, hunted or fished. But the Great Depression of the 1930s, which did so much to alter the landscape of American agriculture, putting tens of thousands of small, diversified farms out of business, refocused the American diet on basics, many of them store-bought. Despite the economic calamity 每 U.S. unemployment in the early 1930s was 25 per cent (today it＊s officially nine per cent and unofficially about 16 per cent) - most U.S. households owned a refrigerator for the first time. Most food shopping was done, for the first time, at a grocery store. Processed foods began to have a market impact for the first time. And in the 1930s for the first time, the number of calories in foods became an important concern for many American homemakers. ※Unlike now, where we＊re counting calories to keep them down, they were counting calories to get enough,§ Alice Kamps, curator of an exhibition at the National Archives called ※What＊s Cooking, Uncle Sam? The Government＊s Effect on the American Diet,§ recently told National Public Radio. During the Depression, millions of Americans hovered just above the point of starvation. In those years, for the struggling working and middle classes, the price of sustenance became inextricably entwined with the price of raising a family 每 with the price, that is, of simply living. It was a fact of life that has never changed. To a great extent, the way the nation still eats is a modification of the diet that Americans settled on in the 1930s and ＆40s. Moreover, the ties that fasten the price of food to changes in consumption and the impacts of the market have grown only more intricate over time -- e.g., should we pay more for organically raised meat if it＊s supposedly healthier for our families?? ???? Steve Bjerklie |