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MEATONOMICS
How the Rigged Economics of Meat and Dairy Make You Consume Too Much-and How to Eat Better, Live Longer, and Spend Smarter
By David Robinson Simon Red Wheel/Weiser, LLC
Copyright © 2013 David Robinson Simon
All rights reserved.
ISBN: 978-1-57324-620-0
CHAPTER 1
The Brave New World of Government Marketing
In his 1932 novel Brave New World, Aldous Huxley imagined a future in which humans exist solely to support the economy and are conditioned from birth to buy things. Government bureaucrats manipulate the sheep-like citizens with drugs and slogans to make them consume as much as possible. In Huxley's vision, 26th-century consumers learn that "ending is better than mending" and "the more stitches, the less riches"—that is, buying new things is better than fixing old ones. But for US consumers, this eerie futuristic fantasy—with government using marketing slogans and other undue influence to drive consumption—has arrived a few centuries early. This chapter explores government marketing as a feature of meatonomics and considers its consequences for consumers.
Checkoff Programs: Unseen and Unknown, But Felt Everywhere
In the Brave New World of the 21st century—where big box stores and mega markets dominate the landscape—our government uses innocuous-sounding "checkoff" programs to encourage us to buy more animal foods and other goods. The mechanism's name persists from a time when the assessments were voluntary and producers willing to opt in participated by simply checking a box. Nowadays, the programs are tax-like and mandatory, even though the benign checkoff moniker remains.
The way they work is simple: Congress slaps a small assessment (less than 1 percent of wholesale price) on certain commodities, and the collected funds are used to pay for research and marketing programs that boost the goods' sales. So when animal food producers collect $1 per head of cattle, $0.40 per $100 of pork, or $0.15 per 100 pounds of dairy, they pass those funds on to national marketing organizations. The proceeds are allocated among state and regional industry organizations throughout the country. There aren't many Boston Tea Party–like protests when it comes to making the payments—probably because most consumers don't know about checkoffs and most producers think their trade groups put the money to good use. These trade groups don't equivocate much about what they do or why they exist. The Kentucky Cattlemen's Association, for example, keeps it simple, saying its business purpose is "Promotion of the beef industry."
Although few Americans have heard of checkoff programs, we've all heard or seen the catchy, feel-good slogans they've generated:
Beef. It's What's for Dinner.
Milk. It Does a Body Good.
Pork. The Other White Meat.
Written, spoken, or sung—and flashed across every medium, including print, radio, TV, and the Internet—these statements have bombarded American consumers for decades. The echo of one particularly snappy jingle that went with a ubiquitous 1990s commercial—"The Incredible, Edible Egg"—still rattles in my brain. And while that phrase and many others predate social networking, they persist because their sticky messaging fits in perfectly with today's meme-saturated, web-dominated world. Like an ink stamp, these messages imprint themselves with authority on our subconscious and become part of our belief system. What's for dinner? Without even knowing why, many think, Beef.
Across the board, animal food checkoff programs are remarkably effective at making us buy more than we would otherwise. According to the USDA, for each dollar of checkoff funds spent promoting animal foods, "the return on investment can range as high as $18." The beef checkoff program raises sales by $5 per checkoff dollar spent. The pork checkoff program drives $14 in sales per dollar spent. While it may not boast a memorable motto, the lamb checkoff provides an unusually huge boost, driving additional sales of $38, or seven extra pounds of lamb, for each dollar spent on promotion. But the biggest winner might be the dairy industry, which recently boasted that over a year and a half, checkoff efforts contributed to more than 7 billion additional pounds of milk sold. That's an extra forty-seven servings of dairy per person in the United States—above and beyond the hundreds of servings we would have consumed anyway during the period. Clearly, milk is up to more than just doing a body good.
All told, these programs provide funding of $557 million yearly for animal food producers to promote their goods. This massive, government-mandated marketing budget gives the meatonomic system something few other microeconomic systems have: an exceedingly deep marketing war chest, deployed to boost sales of all goods from all producers in the program. A few other commodities, like cotton and soybeans, have checkoff programs of their own. Yet in every other industry, except for those lucky enough to have a checkoff program, individual corporations must fork out their own funds to increase sales rather than rely on government programs to prop up their numbers. With meatonomics, on the other hand, the effect of checkoff programs is that we all buy more of nearly every conceivable animal food than we would otherwise. Like a diner with an insatiable appetite, the animal food industry relishes the higher sales that result. Dairy promoters brag that since their checkoff program started in 1983, annual per capita consumption of milk "has climbed 12 percent to 620 pounds."
Some say checkoff programs have been unfairly linked to government and are actually just the tools of good old-fashioned capitalism. They argue these checkoff arrangements involve only private firms who pool advertising monies without government participation, and their mission and methods are no different from those of any private advertiser. However, the US Supreme Court decisively rejected this position in a 2005 case involving the beef checkoff. In Johanns v. Livestock Marketing Association, beef industry participants who disagreed with the message of the latest beef campaign claimed that being forced to fund it violated their right of free speech. The Supreme Court disagreed, holding the message was actually government speech (a form of speech the government can make others support). The court said:
The message set out in the beef promotions is from beginning to end the message established by the Federal Government.... Congress and the Secretary [of the USDA] have set out the overarching message and some of its elements, and they have left the development of the remaining details to an entity whose members are answerable to the Secretary (and in some cases appointed by him as well).
Moreover, the record demonstrates that the Secretary exercises final approval authority over every word used in every promotional campaign. All proposed promotional messages are reviewed by [USDA] Department officials both for substance and for wording, and some proposals are rejected or rewritten by the Department.... Nor is the Secretary's role limited to final approval or rejection: Officials of the Department also attend and participate in the open meetings at which proposals are developed.
This crystal-clear language from the highest court in the land leaves little doubt that the beef checkoff program, and the messages it generates, are the product of the federal government. Simple logic shows that other animal food checkoff programs, which were established by Congress in the same way and are similarly administered by the USDA, are equally the mouthpieces of the federal government. So when one of these organizations speaks—regardless of the product it's hawking—it may say it's the National Pork Board, but the background sounds you're hearing are the imposing bass tones of the US government.
In fact, the government's continued regulatory involvement is a necessary component for mandatory checkoffs to remain legally and operationally viable. If Congress simply created a checkoff program and then stepped aside to let industry run it, the First Amendment's free speech protections would likely prevent the industry majority from bullying dissenters into participating in its message. Under those circumstances, forget the government speech exception: it wouldn't apply and individual participants could opt out. The result would be a checkoff program that is in fact optional, not mandatory.
Why does that matter? Because such a scenario would likely undercut the force of the messaging. As research on optional checkoffs shows, economic free riders—those group members who opt out of paying for all the snazzy commercials but still enjoy their benefits—significantly lower the effectiveness of such programs. Ultimately, a lack of government involvement would likely lead to the decline—or maybe the end—of checkoffs.
Checking Out Checkoffs
Few people have heard of checkoffs, and fewer still have considered their effects. Yet these programs have a number of important consequences, some good and some bad, that merit attention. First and foremost, checkoffs stimulate the economy. By boosting sales, checkoffs create jobs and drive spending. As the USDA puts it, "The fundamental goal of every checkoff program is to increase commodity demand, which increases the potential long-term economic growth of all sectors of the industry and the communities in which they operate."
With a few calculations, we can estimate the overall economic effect of checkoffs. It's a full-fledged bonanza: As table 1.1 shows, the USDA's figures for return on investment from checkoff funds suggest that checkoffs boost sales of animal foods by about $4.6 billion. There's also a multiplier effect related to this sales increase: checkoffs create new jobs, and that in turn increases spending. Applying the typical multiplier used by researchers (0.77) to the sales total yields $8.2 billion in total economic stimulus related to animal food checkoffs. Not bad, but what about the other side of the ledger?
For starters, animal food production generates large external costs—expenses that producers impose on society instead of paying themselves. In the book's second half, we'll see that for each $1 of animal food sold at retail, the industry generates about $1.70 in external costs. Applying this ratio to the $4.6 billion sales figure reveals that checkoffs generate roughly $7.8 billion in external costs not reflected in the retail prices of the goods they promote. That's nearly equal to the economic activity they generate. As with many of the interesting equations that meatonomics presents, the $64,000 question is whether the trade-off is worth it.
Checkoffs, moreover, cause us to buy more animal foods than we would otherwise. Yet judging from the data, Americans already eat plenty of these foods and don't need more. Teenagers, for example, consume 78 percent more saturated fat and 48 percent more cholesterol—both linked primarily or exclusively to animal foods—than government guidelines recommend. One in three US teenagers is obese or overweight, triple the rate in 1963, and a growing number have diabetes or high blood pressure—diseases directly linked to meat and dairy consumption and formerly seen only rarely before adulthood.
Nevertheless, the USDA keeps urging these kids to eat more of the very foods that help make them fat and unhealthy. The huge milk promotion Fuel Up to Play 60, for instance, enjoys more than $50 million yearly in government-mandated funding and reaches 36 million students in seventy thousand schools. And checkoff funding helped the Dairy Board team with Domino's Pizza to offer pizzas in two thousand US schools. Yet it's not just kids who overindulge; as table 2.1 in chapter 2 shows, adult Americans also routinely consume more animal foods than the USDA recommends.
Weird Science
With annual promotional funds of $389 million, the dairy industry enjoys nearly three times the checkoff spending of all fruit and vegetable producers combined (not to mention a marketing budget that would be the envy of many a Hollywood studio). To look at it another way, dairy spends more on advertising in one week than the blueberry, mango, watermelon, and mushroom industries spend together in a year. Under federal law, checkoff funds are intended to be used for both promotion and research. Thus, the National Dairy Council, the largest of dairy's many checkoff-funded arms, boasts that it "partners with top universities and other research facilities across the United States to support nutrition research efforts." Dairy research, funded by at least $58 million yearly, is largely focused on finding ways to convince consumers that dairy is healthy.
Since industry-funded research might be suspect, dairy takes steps to ensure its research appears unbiased. For scientific credibility, research must be published in a respected, peer-reviewed journal. But here's the rub: the National Dairy Council ensures access to such journals, and the benevolence of their editorial boards, by donating cash to a number of nutritional organizations. These include the American Society for Nutrition (whose other corporate sponsors include Dannon and McDonald's) and the Academy of Nutrition and Dietetics (brought to you by the National Cattlemen's Beef Association). Both organizations publish prestigious research journals.
The "best source for the most accurate, credible and timely food and nutrition information," boasts the website of the Academy of Nutrition and Dietetics. But what's left unsaid is the Academy, formerly known as the American Dietetic Association (ADA), has a particularly cozy relationship with dairy. As the world's largest organization of food and nutrition professionals, with over seventy thousand members, it's easy to see how food industry players can benefit from access to this influential group. This begs the question, just how accurate and credible is the organization's nutrition advice?
In a 2007 press release discussing a major increase in the size of the National Dairy Council's funding commitment, the ADA said the sponsorship arrangement gave dairy producers "prominent access to key influencers, thought leaders and decision-makers in the food and nutrition marketplace." The release went on to illustrate, with candor, how the relationship benefits the Dairy Council. One quid pro quo of past sponsorship apparently included the ADA's endorsement of the Dairy Council's "3-A-Day of Dairy" campaign, which educates consumers and health professionals about the nutrition and health benefits of consuming three servings of fat-free or low-fat milk, cheese and yogurt a day." The ADA release didn't disclose the extent of the Dairy Council's generosity, but judging from the size of other contributions from animal food producers to nonprofits, it's safe to assume it wasn't insignificant. The National Livestock and Meat Board, for example, gave $189,000 in one year to the American Heart Association.
Dairy also seeks to extend its scientific influence by installing its people on boards, committees, and editorial panels of nutritional organizations and their journals. One of these people is Gregory Miller, who serves in multiple capacities—president of the Dairy Research Institute, executive vice president of the Dairy Council, and committee chair for the American Society for Nutrition.
Miller and I spoke about dairy research. Among other things, I was curious about studies that have looked at industry influence in the scientific process. These studies find that industry-funded research is up to four times more likely to reach conclusions favorable to the sponsor than unfavorable. In one of these studies, researchers found that "systematic bias favors products which are made by the company funding the research."
According to Miller, the dairy industry provides a sort of public service through its support of nutrition research. "With government funding continuing to shrink," Miller told me, "industry has a responsibility to help fund some of the research that needs to be done out there." In light of such apparently selfless motives, who could accuse the dairy industry of bias? Furthermore, Miller assured me dairy research is not biased, twice using the Fox News slogan "fair and balanced" to drive home the point.
But what about the study that found industry-supported research is four times more likely to reach conclusions favorable to its sponsor? "That study design is somewhat flawed," Miller told me. "I would take it with a grain of salt."
Miller sent me a number of published articles from industry-funded research. These studies have titles like "Dairy Calcium Intake, Serum Vitamin D, and Successful Weight Loss" and, even catchier, "Drinking Flavored or Plain Milk is Positively Associated with Nutrient Intake and Is Not Associated with Adverse Effects on Weight Status in US Children and Adolescents." For anyone interested in just how fair and balanced this research is, a look at one study is enlightening.
In 2010, researcher Patty Siri-Tarino of the Children's Hospital Oakland Research Institute and three colleagues published an article that found consumption of saturated fat does not cause heart disease. This article's surprising conclusion runs contrary to a significant and consistent line of published research that finds exactly the opposite—that dietary saturated fat causes heart disease. Not surprisingly, the news that eating fat doesn't lead to heart disease hit the blogs like celebrity wedding gossip. The animal food industry now trumpets the Siri-Tarino study as one of several said to debunk the "myth" that saturated fat is unhealthy.
(Continues...)
Excerpted from MEATONOMICS by David Robinson Simon. Copyright © 2013 David Robinson Simon. Excerpted by permission of Red Wheel/Weiser, LLC.
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