Thursday, March 29, 2007

Feels like the the tide going out...

Every now and then I think I detect a sea change in our business. Sometimes it pertains only to my farm, but sometimes it simply dawns on me agriculture is shifting course somewhat. This week's news gave me that same impression. Something different our way comes.

And it's not just ethanol.

The curious upper-end trends in food are being carried to the everyday consumer, not because they embrace them, but because the food industry is adopting them, and that is how nearly 50% of our food is delivered. The immediate example of this development is animal welfare concern by food retailers.
In what animal welfare advocates are describing as a “historic advance,” Burger King, the world’s second-largest hamburger chain, said yesterday that it would begin buying eggs and pork from suppliers that did not confine their animals in cages and crates. [More]
Obviously BK considers this to be a wise move to improve or protect their competitive position, but also consider that the executives making this decision are also more likely to be shopping at Whole Foods and ordering free-range chicken dishes when they eat out. Higher income consumers set food trends in more ways than simply by example.

Cheap food is no longer enough. In fact, "cheap" has taken on a definite downscale connotation. The now widespread practice of selective conspicuous consumption - Manolo shoes with Lee jeans - coupled with the considerable disposable income for many rearranges the shopping profile for America.

Food is becoming, I believe, a way to make a personal statement about your class and status, and it is this trend that food retailers are acting on. What you order when you are out with friends may be a subtext, just like the clothes you wear. Now add in the increasing concern with obesity and other surprising health alarms. Suddenly, you have a different answer to what eating is all about.

Significantly raising food prices to fund new ways of managing meat animals is not as unthinkable as it was a few decades ago. Consumer resistance to this could be much less than producers imagine. Still the supply-demand effect suggests that we will eat collectively less, but more expensive protein.

The implications are significant. The hog and poultry industries will likely be more frequently and harshly examined in the process, and the cattle industry will not go untouched. Meatpacking will be changed as well. Animal welfare is one part of the cause, but the cumulative effect of other simultaneous market choices will be considerable, I think.

There will continue to be an enormous demand for reasonably priced food. But the spectrum of market choices for that food could be vastly different.

I cannot help but think that all this turmoil and industry dislocation was partly triggered by the constant complaint emanating from farm country: "People don't know where their food comes from."

We got our wish. They found out.


Bill Harshaw said...

I agree. That's why I bought some Whole Foods stock a while back. The fact is that many people are getting so well off they have problems finding ways to spend their money, hence designer jeans. (Designer jeans!!) Spending that is linked to being environmentally friendly and/or to animal welfare has a moral, even religious, quality to it.

Anonymous said...

John, your post made me chuckle. I've been having this debate with my dad (turf/soybean/corn farmer) for more than a year now. I live in the 'burbs of Indianapolis and have noticed an increasing yuppy-fication associated with food. It's not just about buying organic; it's about where you bought it, how much (more) you paid, etc. I wholeheartedly agree that some of it is symptomatic of the fact that people don't know where food comes from, but I also think status is a huge part. After all...if nearly anyone can qualify to lease a luxury car, then isn't the status associated with what you're feeding your family a natural extension?

I'll skip Whole Foods and keep visiting my local farmer's market, and making treks back home in the summer for sweet corn and tomatoes. :-) Really enjoy your blog!

John Phipps said...

I think we can move beyond classifying this as an affectation. I am fortunate to live with a Master Gardener and great cook, and eating well (if less) is a big part of our happiness in life. We stop the planter/combine for a good dinner, for example. (OK, that's supper for some of you.)

American incomes - even on the farm - have improved to the point of not being the central point of decision-making. Far down the economic ladder more people simply want to be happy in their lives.

Good food may be a new status symbol, but good golly, for once we've chosen a uplifting one.

The best thing is, this will reverberate not just through agrarian, but industrial ag as well.

Thanks all, for reading.