Partnership for a Healthier America Summit 2013

The Partnership for a Healthier America Summit is this week, March 6-8, in Washington DC. The theme is "Building a Healthier Future."  I look forward to participating in a breakout session Friday morning, March 8.

The True Cost of Healthier Choices (Room: Constitution A)
Obesity prevalence among shoppers visiting budget supermarkets was three times higher than the obesity prevalence among shoppers visiting higher-price supermarkets. Does a healthy diet cost more than an unhealthy diet? It depends on how you measure it. As food prices rise, how can we not compromise nutrition by insuring access to healthy food?

Moderator:

• Lisa Sutherland, President, LA Sutherland Group

Panelists:

• Andrea Carlson, Economist, USDA Economic Research Service
• Janet McLaughlin, Senior Director, Share Our Strength’s Cooking Matters®
• Parke Wilde,... Friedman School of Nutrition Science and Policy, Tufts University

An earlier post on the U.S. Food Policy blog offers some approaches to thinking about the cost of healthy food, along with links to other reading and resources.  Andrea Carlson and Elizabeth Frazao published a USDA report on food costs in May 2012, which this blog discussed at the time.  The Cooking Matters program from Share Our Strength has resources for healthy, affordable meals.

Following the breakout sessions Friday morning, First Lady Michelle Obama is giving the keynote Friday afternoon. There are many other great breakout sessions throughout the summit.

Healthy food not more expensive

In contrast with the conventional wisdom that healthy food costs too much, USDA's Economic Research Service this week reports:

For all metrics except the price of food energy, the authors find that healthy foods cost less than less healthy foods (defined for this study as foods that are high in saturated fat, added sugar, and/or sodium, or that contribute little to meeting dietary recommendations).

The argument turns largely on three different methods of measuring the cost of food:

• price per unit of weight ($ / 100g of edible weight)
• price per serving ($ per cup or ounce equivalent)
• price per unit of food energy (cents per Calorie)

Based on the third method, people frequently say healthy food is too expensive.  Based mainly on the first two methods, USDA argues instead that healthy food is reasonably inexpensive.

You might think this is a delightfully arcane and nerdy point of contention.  Yet, the new study has major news coverage today, including a surprisingly complete explanation of this whole units issue.  The Wall Street Journal quotes one of the report's authors, my colleague Andi Carlson:

Often, less-healthy food options are made up of empty calories, prompting people to eat even more, said Andrea Carlson, lead researcher of the report.

"Take a chocolate glazed donut which is 240 calories," she said. "You can easily eat one, if not two or three without any trouble at all. However, a banana, which has a lot of nutrients in it and will make you feel quite full, has only 105 calories. You will feel fuller if you eat the banana versus the donut."

I can think of reasons to like each measurement method in certain circumstances.  Beverages provide an example of a comparison where it seems the per-serving approach is sensible.  If we compare the cost of milk to sugary soda, a per-Calorie comparison makes soda look cheaper when it really just has more Calories.  The per-serving comparison better captures the choice consumers really face.

On the other hand, if you think of the cost of a day's food supply, consumers' bodies generally regulate total food energy intake.  For such comparisons, perhaps price per unit of food energy does make some sense.

For those who want more detail, here is a summary graphic from the USDA report.  It is a bit complex.  Generally, the high-carbohydrate category is fairly inexpensive, which corroborates the conventional wisdom.  But, the fruit and vegetable categories are less expensive than meat by the preferred second and third measurement methods, which is USDA's main point.

A skeptical question about financial speculation and food prices

Tom Philpott at Mother Jones blames food price increases since 2007 on financial speculators.  He is quite harsh on the fools like me, who thought rising food prices reflected resource scarcity.

Here is my question in his comments section:

I don't understand how speculation could raise food prices for more than a few months. 

The financial speculators are placing bets on the futures market.  If they expect prices to go up in January, they will buy a contract today that guarantees them a certain amount of commodity in January.  When January comes around, they sell their paper commodities on the ordinary spot market.  If they are correct that prices rose, they make a profit, because their January sale is more than the price they originally paid. 

An essential feature of this game is that the speculators do not want to take possession of a ton of corn or soybeans.  For speculators, the game is not "buying and more buying," it is "buying and then selling."  The buying drives up prices, and the selling drives down prices.  Commodity futures are different from "dot com" stocks, which can be held for a long time.

Basically, I find it much more plausible -- as an economist and as an environmentalist -- to see rising food prices as a symptom of real resource scarcity.

But I'll keep an open mind.  Can somebody explain more clearly: beyond the first few months of a speculative boom, how can financial speculators keep driving the price higher and higher?

Mark Bittman asks if junk food is really cheaper

Mark Bittman's column this week in the New York Times argues that junk food is not really cheaper.  For a reader who is skeptical, Bittman's rhetorical method is to provide an array of examples, each of which has different advantages. 

In general, despite extensive government subsidies, hyperprocessed food remains more expensive than food cooked at home. You can serve a roasted chicken with vegetables along with a simple salad and milk for about $14, and feed four or even six people. If that’s too much money, substitute a meal of rice and canned beans with bacon, green peppers and onions; it’s easily enough for four people and costs about $9. (Omitting the bacon, using dried beans, which are also lower in sodium, or substituting carrots for the peppers reduces the price further, of course.) 

The column concludes with both a cultural agenda and policy prescription.  Do you like one, or the other, or neither, or both?

Are food price increases always bad?

From my interview this week by Gail Bambrick in TuftsNow.

Does it seem like you need a second mortgage to fill your cart at the grocery store these days? Are these price spikes that hit us at the checkout line for real, or not as bad as they seem? A lot depends on which prices you consider.

Take the old standby of meat and potatoes. According to the federal Bureau of Labor Statistics (BLS), over the past two years a pound of ground beef went from an average of $2.23 per pound to $2.77, an increase of almost 25 percent. By contrast, potato prices rose over the past two years from $.63 to $.69 per pound, an increase of only 8 percent.

According to Parke Wilde, an associate professor and food economist at the Friedman School of Nutrition Science and Policy, U.S. food prices are more complicated than they appear at first glance....

Are those increases going to harm the economy?
This is the hardest thing for economists to express to people, because it sounds on the face of it totally loony: not all food price increases are bad. You have to ask yourself, is the food price increase a mistake or does it reflect a genuine scarcity? If things are really scarce, economists think prices ought to be high, because that sends the right message to everybody. It indicates to consumers that they should moderate their consumption, and it indicates to producers to innovate and produce more efficiently. These are all good things that can happen. Moderating consumption should not mean people going hungry, but perhaps going a little easier on the meat consumption, because that uses more resources than raising fruits and vegetables and grains.

A price change has two effects. It changes how well-off we are. And it changes the market's assessment of relative scarcity.

First, in thinking about how well-off we are, consider producers that you care about as well as consumers. Higher prices make producers better off and consumers worse off. They help some people and hurt others. Now, for a moment, set aside this issue of being richer or poorer.

Second, in thinking about relative scarcity, ask yourself if you think food really is becoming more scarce. Don't panic about it, just acknowledge that there are strong environmental reasons for thinking of food as scarce. In this setting, are you sure you would want food prices in the marketplace to stay forever low?

Here is the full interview.

Photo: Emily Zilm.

The cost of nutrients

Pablo Monsivais, Anju Aggarwal, and Adam Drewnowski have a fascinating new study out today in the journal Health Affairs.  Using data from surveys in Seattle, it found that diets were more expensive for people who consumed higher amounts of certain nutrients, such as potassium, and lower amounts of other food components, such as saturated fat.

Our findings highlight a stark economic dimension to observed imbalances in diet. Based on the diets reported by a representative sample of King County, Washington, residents, our analyses indicate that people attempting to bring their diet closer to recommended consumption levels for the nutrients we studied would probably have to pay higher food costs.

The nutrients themselves are not expensive.  In a 2009 study of diet models using the framework of USDA's Thrifty Food Plan, Joseph Llobrera and I explored different types of economic and nutritional constraints that one could try to meet. While choosing diets that are as similar as possible to current consumption patterns, it is fairly inexpensive to meet just nutrient constraints (like getting enough calcium and sufficiently low saturated fat).  It is a bit more expensive to meet Pyramid food group constraints (like getting enough fruit).  And it is more expensive still to meet idiosyncratic food-specific constraints (like getting enough of particular red meats).

The Health Affairs article is getting nationwide coverage today from the Associated Press, under the headline: "Healthy Eating is Privilege of the Rich, Study Finds." I am quoted for opposition to the main thesis.  Journalists do this in part because of the intrinsic value of multiple points of view, and also for narrative tension, quoting one scholar against another.  It is more fruitful to see this as an ongoing conversation in a community of researchers, trying to identify the economic and non-economic sources of unhealthy eating patterns, and reading each other's work with great interest and appreciation.

Addendum: Still mulling over this discussion, a good way to think quantitatively about these questions is to fiddle with our Thrifty Food Plan Calculator, on the Friedman School website.  For example, the tab titled "good sources of..." has a list of the food groups that provide the most potassium per dollar, the most fiber per dollar, and the least saturated fat per dollar.  These are the nutrients that featured most prominently in the Health Affairs article.  Enjoy exploring.

Some economic benefits and costs of vegetarianism

Vegetarian diets generally are the most economical way to acquire food energy and protein, according to a 2009 article in the Agricultural and Resource Economics Review by Oklahoma State University agricultural economists Jayson Lusk and F. Bailey Norwood.

The pattern is sufficiently strong, the authors find, that "sizable demand shifts away from meat consumption would result in significantly lower corn prices and production."  As a consequence, both plant-based and animal-based diets would become less expensive.

It is worth noting that some fruit and vegetable production is expensive on a per calorie basis, and also that animal food production makes efficient use of some agricultural resources that are particularly suitable, such as marginal grasslands.  Also, the authors emphasize that high-meat diets are highly desirable to many consumers.  Still, the basic thrust of the article is that more nearly vegetarian diets would make efficient use of food production resources. 

Similar points have also been made by many other writers covering food production and the environment, but it is interesting to see the issue quantified so plainly by economists at a leading land-grant university.

Salinas Valley, 2011 (P. Wilde)

In Seattle: "The Search for Affordable Nutrient Rich Foods"

A new study (.pdf) from King County (Seattle), Washington, looks into some of the leading concerns in national discussions of local food retail access -- (1) whether supermarkets are found in poor neighborhoods, and (2) whether food prices are higher in poor neighborhoods. Nadia Mahmud, Pablo Monsivais, and Adam Drewnowski find supermarkets in neighborhoods of all income levels. For most chains, outlets were found in both poor and rich neighborhoods. Each chain offered approximately the same prices in a store sampled from a poor neighborhood and a matched store sampled from a rich neighborhood. Yet, the chains differed from each other, with some chains having much higher prices in both kinds of neighborhood. The paper names the chains and has nice maps and tables of actual prices.

Stomaching the recession

Julie Flaherty's lively article on food consumption during recessionary times is currently the lead feature on the Tufts website. It draws on conversations with Friedman School Professor Jeanne Goldberg and myself. Flaherty explores whether one would expect people to eat more or less healthy food during an economic contraction:

If we look to history for clues as to what size jeans we will be wearing in 2011, our past recessions serve as imperfect precedents. The Great Depression may be the closest equivalent to the current economic crisis, but the nutritional landscape was very different then. "There were no televisions; levels of restaurant consumption were vastly lower; processed food consumption was much lower; and levels of physical activity were higher, especially among lower-income people," says Parke Wilde, Ph.D., a food economist and an associate professor at the Friedman School.

A better comparison may be 1982, when joblessness reached a high of 10.8 percent. People didn’t slow their food spending (it increased by 5 percent), and in fact, new-fangled "health foods," including low-fat and low-sodium products, did quite well. But at the time, the percentage of obese adults was only 15 percent. It is now closer to 34 percent.

"Something has happened in the last 30 years that the whole middle of the distribution has shifted in weight upwards," Wilde says. "And so you really need to look at things that are characteristic of the last 30 years."

One thing we’ve discovered during that time is that hunger has a relationship to obesity. In 2006, Wilde and Friedman School doctoral student Jerusha Peterman, N11, published a study showing that women who have difficulty putting food on the table every day are 58 to 76 percent more likely than other women to be obese or gain weight over time. Other studies have drawn similar conclusions. One found that toddlers whose families have gone hungry are three to four times as likely to be obese.

The reasons behind this nutritional paradox are unclear, but it is no secret that junk foods filled with calories, refined grains and sugars are a cheap and easy way to fill up. This has spurred Wilde to get to the bottom of a question that has plagued public health officials and shoppers alike: Does it simply cost too much to eat a healthy diet?

US dairy crisis, message from Willie Nelson & Farm Aid

The drastic drop in milk prices paid to farmers over the past year has led to an unprecedented crisis for dairy farmers who, on average, are being paid less than half the cost of production. Low prices and high production costs threaten to push nearly one-third of dairy farmers off their land over the next couple of months, strengthening corporate control of the dairy industry and severely impacting the health of local and regional economies nationwide.

“Setting a fair price for milk won’t fix all the problems that led to the current crisis, but it may be the only way to keep thousands of dairy farmers on their farms this year,” said Farm Aid board member Willie Nelson. “Unless Secretary Vilsack takes immediate action, huge areas of the United States may be left without any local dairy farms at all.”

Dairy farmers have been hit with a catastrophic combination of factors beyond their control. Farmers are struggling to pay bills from record high feed and fuel costs; adequate credit is increasingly impossible to come by; and the price of milk paid to farmers by processors collapsed a record 30 percent in January alone, and is currently down 50 percent since July 2008. In the meantime, the top dairy processors have recently announced 2009 first quarter earnings that are up from the same period last year. The top processor, Dean Foods, reported their first quarter earnings are more than double that of last year thanks in part to the plunging price Dean pays to its milk producers.

Under Section 608c (18) of the Agricultural Marketing Agreement Act of 1937, the Secretary of Agriculture is required to adjust the price of milk paid to farmers to “reflect the price of feeds, the available supplies of feeds, and other economic conditions which affect market supply and demand for milk and its products.” Farm Aid urges Secretary Vilsack to use this power to immediately institute a set price for milk that reflects the cost of production, keeping dairy farmers on their land.

“The U.S. has a tradition of local and regional milk distribution, making dairy farmers a base for strong local and regional economies. The loss of these farms will reduce spending in small businesses, investments in banks and shrink the community tax base. If we lose a third of our dairy farms in the next few months alone, imagine the impact on these economies by year’s end.” said Carolyn Mugar, executive director of Farm Aid. “As our independent family dairy farmers go out of business, our milk supply gets more consolidated by giant confinement dairies that do not contribute to our local economies or act of stewards of the land like our family farmers do.”

The petition can be accessed by going to www.farmaid.org/dairyfarmers

Following Parke's lead, I would like to disclose that I am (proud to be) interning at Farm Aid. Cross posted from Epicurean Ideal.

A question (not just an answer): How much does a nutritious diet cost?

How much does a nutritious diet cost?

Some say that the high price of healthy food is making us obese and unhealthy. Others wonder how that could be so, because (even with recent inflation) food of all sorts has been comparatively cheap in the United States for many years, due to government policy and technological change in the food system.

The leading source of disagreement about the cost of an adequate diet is different definitions of "adequate," not different price estimates. Your estimate of the minimal necessary cost depends on your opinion on questions like the following:

• whether a high level of meat and dairy is necessary for an adequate diet,
• whether your vision of healthy food includes foods marketed as healthy (organic yogurt, low-fat cereal) or simple basic staples (whole grain rice, cabbage, carrots),
• whether diets should be judged by their adherence to USDA's Pyramid recommendations,
• whether diets should be judged by their adherence to the National Academies' nutrient recommendations, and
• whether you think low-income people can cook at home, or whether instead convenience and restaurant foods are central to your definition of adequacy.

More subtly, your estimate of minimal cost depends on your opinion about whether people can change their diets in order to meet cost and nutrition goals, or whether it is inevitable that any realistic diet closely resembles the current average diet.

Reasonable answers about the cost of a nutritious diet, corresponding to different definitions of nutritious, range from even less expensive than the federal government's Thrifty Food Plan to much more expensive.

No wonder this issue generates a lot of argument! Most people on all sides of this issue leave these key assumptions implicit and unstated. Yet, these assumptions strongly influence conclusions about minimal costs.

In a recent article in the Journal of Consumer Affairs (free abstract, pay site for full article), "Using the Thrifty Food Plan to Assess the Cost of a Nutritious Diet," Joseph Llobrera and I use USDA's Thrifty Food Plan (TFP) framework to clarify the relationship between assumptions and cost estimates for nutritious diets. Let me know by email if your library does not have the journal. There is a related seminar on the Friedman School website. If you would like to play around with these models yourself, see our Thrifty Food Plan calculator. In both the seminar and the calculator, I should have emphasized more strongly that all of the dollars are in 2001 dollars per adult in the household, not adjusted for inflation (if you didn't know this, the amounts would seem unrealistically low).

For some readers, the whole computation will seem beside the point. They may reason that is clearly wrong to set the TFP cost target too low, but harmless to set it too high, so why not just pick the highest estimate? For a number of reasons, I think better food assistance policy comes from trying to choose the right estimate for a minimal cost target, rather than padding the estimate too much.

In the article, we find that the USDA's Thrifty Food Plan cost level can purchase a nutritious diet if (1) you think nutrient constraints (adequate protein, for example) are more important than food category constraints (plenty of meat), or (2) if you think it is reasonable to expect people to drastically change their current consumption pattern. If, instead, you think substantial meat and dairy amounts are essential to an adequate diet and you defer to the current consumption pattern of low-income consumers, you will probably prefer a more generous TFP cost target.

Update: Slate's Daily Bread food business blog has a thoughtful post about this article (gently needling the online presentation as "a little geeky" -- ha!).