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The Economic Impact of Food Waste

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IMG_20121218_171933.jpgIt is no secret that food waste is a serious issue. When talking about ending hunger and feeding an increasing population, environmental experts such as Jon Foley of the University of Minnesota Institute on the Environment often state that part of our strategy in feeding the world must include reducing food waste. The reason is the Environmental Protection Agency estimates that more than 34 million tons of food waste was generated in the United States in 2010, with only 3% diverted from landfills. Food waste is the single largest material in municipal solid waste. Worldwide, the United Nations Food and Agricultural Organization estimates that approximately one third of food produced for human consumption is lost or wasted every year.

With all the attention on how much food is wasted around the world, at The Food Industry Center we were curious about the economic impact of this food waste. Fortunately for us, Jean Buzby and Jeffrey Hyman of the USDA Economic Research Service published an estimate of the Total and Per Capita Value of Food Loss in the United States in the July 2012 issue of Food Policy. The authors focus on the retail value of food loss in the United States to estimate the economic impact.

Using Loss-Adjusteed Food Availability (LAFA) data published by the USDA ERS and Nielsen Homescan Data for retail food prices, Buzby and Hyman estimate the consumer and retail food loss value for more than 200 individual foods and categories of food. Their results are staggering. They estimate in 2008 "the total value of food loss at the retail and consumer levels in the United States was $165.6 billion." They find 41% of the value is losses in meat, poultry and fish, 17% of the value is in vegetables, and 14% of the value is in dairy products. Per capita, this represents the value of food waste to be $390 a year, almost 10% of average food expenditures. For an average household of 2.4 people, this represents 654 pounds of food not eaten at a retail value of $2.56 a day. These numbers offer a compelling case for consumers to reduce their personal food waste.

In addition to the retail cost, the authors also highlight the production costs of food waste. They state that in 2008 it cost an estimated $1.3 billion to landfill food waste, and the production of the wasted food took an estimated 300 million barrels of oil amongother costs. For this reason, the authors believe that looking for market based approaches that promote reducing food waste, while reducing the cost of production, will be the most successful approach to combat the environmental, economic, and societal implications of food waste.

Let us know what you think! What are some of your ideas to reduce food waste in the United States?

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1 Comment

There are a number of efforts to reduce food waste across the US and the world, but they tend to be localized and early in their start-up. I am not aware of a significant effort in Minnesota, but the University would be a great place to start, and to assume state-wide leadership.

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This page contains a single entry by Sadie Dietrich published on December 18, 2012 12:34 PM.

The Value of Corporate Social Responsibility was the previous entry in this blog.

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