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January 2012 Archives

Realities of Hunger in America

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As a whole, Americans do not spend much money on food. The USDA estimates that in 2009, Americans spent only 9.4% of disposable income on food. Some believe that there is little cultural value tied to food in the US, and others say we have a system that rewards cheap food. While this may be part of why we don't spend much on food, the more likely explanation is that on average, we have more money. Engel's law tells us that as income goes up, people spend less of a proportion of their income on food. The statistics are misleading though. Despite our wealth, hunger is a very real problem in the United States.

Amber Waves, a publication of the Economic Research Service of the USDA, estimated that in 2010 14.5% of households, or 48.8 million people in the United States were food insecure at some point during the year and over ⅓ of these, 5.4% of households, were very food insecure. An alarming 16.2 million of the nation's children lived in households that were food insecure. A household is considered food insecure if at some point they didn't know if they were able to access enough food to maintain their eating patterns. Those with very low food security had at least one household member who had to change their eating patterns during the year because of a lack of resources.

While these figures are shocking, they are not new. The percent of food insecure households has remained unchanged after a spike in 2008. What has changed is nutrition assistance spending. USDA statistics give us some valuable insight. In 2010 the USDA spent $95.4 billion on food and nutrition assistance. This was a 20.5% increase from 2009. More people than ever are now participating in the Supplemental Nutrition Assistance Program (SNAP) also known as food stamps. Participation is up 70% over the last 4 years and now, 15% of the population receives assistance through SNAP. In order to qualify for the SNAP program, a person's income has to be less than 130% of the poverty line. For an individual, this translates to a gross income of $1,180 or less each month.

As the Minnesota winter drags on, we encourage you to think about the many organizations that need volunteers and food pantries that need fresh, healthy food. Hunger effects not only the hungry, but society. According to the University of Minnesota Cost/Benefit Hunger Impact Study, the direct and indirect costs of hunger in Minnesota range from 1.26 to 1.62 billion dollars each year. Helping to end hunger in Minnesota and throughout the country and world is an investment in our future.



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Getting Your Money's Worth

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No matter where you buy your groceries, it is likely that you have the option to buy organic, and it's likely to be more expensive. Many people wonder if this price premium is reflected in the costs of organic production. In the January 2012 issue of the American Journal of Agricultural Economics Karen Klonsky gives us a very candid explanation of just that in her article Comparison of Production Costs and Resource Use for Organic and Conventional Production Systems. She looks at various types of crops including alfalfa, tomatoes, field corn, broccoli, lettuce, strawberries, raisins, almonds, and walnuts.

For both the organic and conventional crop systems, Klonsky looked at the costs per acre to maintain fertility along with weed, pest, and disease control. These are broken down into categories such as materials, labor, fuel, lube, and repairs on equipment. The article also compares resource use in the categories of fuel use, labor (human and machine) and water use. What Klonsky found is that "the total cost of fertility, weed, pest, and disease control is higher for the organic systems than the conventional systems except for strawberries and lettuce due to the fumigation of strawberries and the high use of synthetic pesticides in lettuce."

When looking at resource use, machine labor does not vary between the systems much except for conventional lettuce which requires many applications of pesticides. Fuel use is also very comparable except organic almonds require much more due to propane used for flaming to kill weeds, and water use was the same for both systems. However, the organic system required more hand labor per acre for every crop except almonds.

Klonsky closes by saying that given 1) yields are lower for organic strawberries and almonds, 2) organic alfalfa's shorter stand life, 3) organic vegetables produce fewer crops over a 2 year period, and 4) higher organic production costs - the organic market is largely dependent on price premiums often reflected in grocery store prices to make comparable profits. For more information on price premiums and the U.S. Organic Market, check out Price Premiums Hold on U.S. Organic Produce Market from the USDA ERS.



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Challenging the Conventional Wisdom on Soda Taxes

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Getting a lot of attention in the past week is the argument for a sugar tax on soda. Publishing A Penny-Per-Ounce On Sugar-Sweetened Beverages Would Cut Health and Cost Burdens of Diabetes in the January issue of the journal Health Affairs, a group of scientists at the University of California San Francisco estimated that a one cent tax per ounce of soda could save as many as 26,000 lives over the next decade, and prevent as many as 240,000 cases of diabetes per year. Their work is another study aimed at how using taxes can improve public health. Not everyone agrees though, and some researchers believe that proponents of the soda tax ignore the far more complicated issues underlying the obesity problem.

In the October 2011 Choices Magazine, Robbin S Johnson comes out against a soda tax in her article Caloric Sweetened Beverage Taxes: The Good Food/Bad Food Trap. Johnson gives four reasons why a soda tax is not an effective strategy for combating obesity. The first is that it fails to address the complex nature of the problem. Obesity happens overtime and for many reasons. A lack of exercise and large proportions are also contributors to obesity but a soda tax only looks at the input level of calories, not the output. The second reason Johnson gives is that a soda tax does not account for the substitution effect. People will likely switch to other calorie dense foods or will get used to paying the higher soda prices. She argues that sin taxes have historically not worked and the decrease in smoking came from warnings and advertisements; Policies focused on behavioral change rather than taxes.

A soda tax is also regressive. It will disproportionately effect the poor and give them even less money to spend on fresh fruits and vegetables. You can consume some soda without adverse effects, so Johnson argues that you can not compare it to cigarette taxes because smoking is never good for anyone. The last reason that Johnson gives against soda taxes is that "it does not lead to a better understanding of the problem and individual accountability." She argues that the funds raised from a soda tax are unlikely to go to public health campaigns and that if done, should be done with a fairer tax, one that is not so narrowly aimed at soda.

Using well founded science and broad based education on living healthier lives of balance, choice and responsibility is much more likely to accomplish real goals of treating causes rather than symptoms Johnson says. It refrains from making the beverage industry an enemy and instead encourages collaboration and real progress rather than confrontation.



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Lack of Snow Could Drive Up Food Prices In 2012 | KSTP TV - Minneapolis and St. Paul

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Brian Buhr, Applied Economics Department Head and TFIC Research Affiliate, discusses how the recent dry weather may impact future food prices.

Lack of Snow Could Drive Up Food Prices In 2012

About this Archive

This page is an archive of entries from January 2012 listed from newest to oldest.

December 2011 is the previous archive.

February 2012 is the next archive.

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