Really raises the question - should vital infrastructure, like food production, be built in an attempt to maximize profit or resiliency? Have things swung too far in one direction?
To my mind there's no question that it's swung too far. But it's very easy for me to live in the country and say "oh I get all my fresh produce from the local farm!" when there are cities of millions of people that need feeding too. Scaling while retaining resiliency is not easy.
Which is not scalable for the entire big city. My parents are organic market gardeners, and there is simply no way that model could scale up enough to feed that many people cheaply.
Food budgets would have to go back to the 1940's or earlier - where they were a significant fraction of take home pay. Now they are almost a rounding error comparatively.
I don't necessarily think that would be a bad thing. A lot of the asset price inflation like homes can be tracked to food and consumer goods taking an increasingly lesser portion of the family budget. Re-balancing this seems wise to me.
>Food budgets would have to go back to the 1940's or earlier - where they were a significant fraction of take home pay. Now they are almost a rounding error comparatively.
You are demonstrating your privilege. I am pretty frugal and my INDIVIDUAL food cost is like $100 a week, or 10% of my take home pay, and while I make peanuts compared to most in tech, I make more than the average adult.
USDA stats say the average numbers are closer to $500 a month and 11% of gross salary, and also:
>households in the lowest income quintile spent an average of $5,278 on food (representing 32.6 percent of after-tax income).
You put your finger on what I think is the real issue: whether or not access to cheap food is a net benefit or not. I also won't claim to have the perfect answer but do feel we've gone at least a bit too far in one direction.
Yes, and I think it goes beyond "healthy", depending on one's definition.
Part of it is also that "cheap" tends to lead to monocultures and other patterns that are more easily disrupted.
An example being the Cavendish banana, which for most of the western world is the only thing they know of when the word "banana" is mentioned. And now the banana supply of a large part of the world is in danger of going extinct [1]
And there's also ecological health. "Cheap" tends to promote mass production in certain areas and shipping everywhere. "Cheap" tends to promote less sustainable farming practices. That sort of thing.
Almost a round error comparatively doesn’t mean it’s 0.01%.
People used to spend ~30% of their income on mass produced basic staple foods with very little meat they cooked at home. You can live like that on like 1$/day. Median household income is over 80k today so we are talking more than an older of magnitude price reduction.
Get regular meal delivery etc and sure you can spend crazy money but it’s not really spending that money on food itself.
family of 3, never ordered delivery in my life outside of pizza once in a blue moon and eating out no more than twice per month - food bill $1,900-ish / month
The article is literally about eggs being 7$/dozen, which is an egg specific price spike.
Even assuming you’re spending twice as much on eggs it just doesn’t add up to over 20$/day. Flour is 0.50$/lb, lettuce is 3$/lb, butter is 5$/lb, etc. Even a 3,000 calories per day you’re well under that.
I have a similar build, basically all adults and I am the only one who pays for food. My monthly bill is about 30 - 60% your bill. Mostly sits in the 30 - 40% range.
I don't dine out, I don't drink, and I have some lifestyle + allergy restrictions for some things, but I tend to believe those restrictions actually make it more expensive than not.
I am also not in a VHCOL, but still quite high since I'm quite close to a major hub in an expensive suburb.
That number is insane to me. I would have to go high end on every single meal to get to the same number. I don't think I debate quality all that much either. I don't feel I cheap out either generally. Food is a fair bit less than 5% of what I make annually too.
In many cases maximizing profits increases supply through efficiency, especially in the case of things like food. Increased supply is usually considered a safer place than a lower supply if it's vital.
Every step you take that makes food more expensive, some use cases of food are no longer possible (say, free eggs in all elementary schools or something).
How many of these uses are we ok eliminating so the wealthier population has a more consistent/resilient supply?
> built in an attempt to maximize profit or resiliency
I think framing it as an either/or is a bit of a mental trap. They are sometimes in opposition, sometimes not.
For example, those farms which were not resilient are not maximizing their profits, since they've had more than a year of warning of avian flu. They were operating to minimize work and costs, not maximize profit, and they are losing out on a ton of it right now.
Those operations which built with resilience, or got lucky, are swimming in profits right now.
The issue with that reasoning is that it fails to take into account that risk is a commodity now. It's often more profitable to go for short term profit and offload your risk to an insurer who amortizes that monetary risk in a pool containing a bunch of other industries.
For critical services like food production, that's a problem. "Well, we don't have food, but it's okay because screw production went well" doesn't make sense socially, but our system makes it so monetarily.
I'm not sure in what sense you mean risk is a commodity, and why it's a problem. I'm also unsure what changed to make it so now, as opposed to having ever been so.
Those who actually took risk into account and planned accordingly have profited wonderfully. Those who did not take risks into account lost their bet. Eggs are priced higher for some, but are pretty much available everywhere still, and have not dipped below some sort of minimal level of availability. In California, past shortages were far far worse than this one, and even then the egg shortages were in no way catastrophic to the economy or health of humans.
Of all the times in history, ever, we are at the lowest possible risk of famine. Instead, our abundance of high calorie food is the biggest risk to the health of Americans.
So I would like to understand your point a bit more if you have the time to elaborate.
I think the assumption they're making is that we want to guarantee a certain reliability of food, and that even if we have perfect insurance that pays out when there isn't enough food, we just have money, and no food.
That's a theoretical problem that could occur, but is extremely unlikely. The worst we'll see is what we have now (eggs are spendy) or a certain type of food disappearing for awhile (tomatoes one year were gone from almost all fast food places).
If we have to substitute one food for another for a year or two that's an inconvenience. But preventing famine by trying to guarantee that the price of eggs doesn't go up is likely far, far down the list. Better that money be spent on improving the supply chains and if necessary bulk storage of long-lasting caloric sources (cheese and flour reserves, perhaps).
Here's an idea. Let's get a large proportion of our calories from inefficient animal sources. Then if there is a widespread crop failure we can eat the breeding stock and then the animal feed.
That's generally what happens in Africa. It doesn't work as well in North America because consumers here are too rich to switch to barley and oats when wheat is expensive.
Yes, ethanol is the American equivalent. If we ever have a food shortage due to widespread extreme weather or similar, the president can nix the ethanol mandate to eliminate the food shortage.
The world does not have caloric food insecurity. We might be insecure in terms of specific nutrients or specific foods, but the modern world is not insecure in terms of human food calories.
> Those who actually took risk into account and planned accordingly have profited wonderfully.
I don't know why you're saying this. Imagine I'm investing.
If I "take risk into account" and select stocks anyways, I may lose a bunch of money one year. But I expect to make more on average than bonds.
Looking at a year where bonds excel compared to stocks doesn't mean that I failed to "take risk into account."
Likewise, a conventional producer of eggs that has now had a significant downturn in production may be having a bad year, but this doesn't mean that they're not following a profit maximizing strategy or not taking risk into account.
> Of all the times in history, ever, we are at the lowest possible risk of famine.
I think this is making the same kind of mistake: looking at today's outcome and assuming that reflects the risk picture.
We're not observing too much famine right now. But we could certainly have a more of a risk of the most catastrophic possible famines now because of things like monoculture, critical links in production, climate risk, etc. Just looking around and saying "all is great today" or "conventional egg producers are having trouble today" or "stocks are down 15% for the year" does not capture the picture of risk, particularly for rare events.
The best we can do is try to interpret sentinel events like this one and think about what else can happen.
I don’t think of it this way. I think the conventional producers were acting to maximize expected profits at the cost of increased volatility in outcomes. Most years these practices have been more profitable.
Conventional producers have been working to contain things like this for year. They don't all succeed, but this isn't the first time eggs have got expensive because of a bird flu, and they have been paying attention to what works. They don't remodel all barns at once to fix the issues, but they have been remodeling barns over the years to prevent this issue.
> Conventional producers have been working to contain things like this for years.
Sure. My point is, what optimizes for average production and profits doesn't necessarily optimize for worst case production and profits. There is a level of care that doesn't pay off most of the time.
1000 years ago we were much less resilience, and that despite farmers then optimizing for that and not profit. (read acoup.org for long discussions on what farming was really like over different times in history)
We as thoughtful human beings can consider non-extreme points where we find other optimizations that aren’t necessarily around profit or resiliency. We can create a new metric called “human progress mertric” where we consider profit as a strong driver but also put weight on things like resiliency and allow profit to slide a bit so our real goal is better achieved.
Rarely ever, IMO, are worthwhile goals entirely profit optimized or resiliency optimized. Some blend tends to be best, and sometimes you can even have both simultaneously (they’re not always inherently mutually exclusive, although those taking in the winnings may want it to be).
A surprisingly large amount of the United States' crop yield comes from rain falling on non-irrigated fields (85%). Our biggest crop is corn, and corn is very water-sensitive at specific points in its growth.
There is no infrastructure to protect there – only infrastructure to build (irrigation), for better resiliency.
> Our drive to capture efficiencies through economies of scale
Is that what's happened here? It looks to me more like the billionaire/PE class's drive to capture rents through monopolies is a more accurate lens to view the situation through. Especially as it's the trope namer for chickenization
