Agricultural News
Steve Meyer on Kirkpatrick Foundation and Their Food Price Increase Claims Because of Industrial Ag
Mon, 01 Aug 2016 21:16:20 CDT
Following is an analysis and opinion piece that responds to a recent set of graphs and comments about those graphs made by the Kirpatrick Foundation, who asked the question, "Does Industrial Agriculture Keep Food Prices Down?" The Foundation made reference to claims being made by proponents of modern production agriculture who support State Question 777 that those modern production practices have been able to keep food prices down. The graphs shown by the Foundation would suggest those claims are wrong. However, a leading animal protein market analyst, Dr. Steve Meyer, has looked at what the Kirkpatrick Foundation is claiming- and he disputes their math. Here is his commentary, courtesy of the Oklahoma Cattlemen's Association.
"In a recent web posting, The Kirkpatrick Foundation claims that the prices of several popular products produced by Oklahoma's pork and chicken industries have risen sharply since 1992. And they are correct when one considers only the nominal prices of these goods. But figures can lie and liars can figure. Oklahomans deserve to know the entire story that appropriately compares the prices of pork chops (and other product) today to those of the past.
"The most serious error in the foundation's allegation is that it does not allow for the changing value of the dollar. A dollar in 1992 was worth far more relative to the incomes of consumers than was a dollar at the beginning of 2016. Yet the foundation compares 2016 prices and 1992 prices as if the currencies used in the two years were of equal value. And they did so even when putting prices from different time periods on an equal footing is quite easily done by using a measure of inflation to "deflate" current prices. Using the Consumer Price Index for all goods, the deflated prices of sliced bacon, bone-in pork chops, whole chickens and chicken legs stated in constant 1992 dollars appear as at right. In these "real" terms, the price of pork chops dropped by 23% and the price of chicken legs dropped by 16%. The price of whole chickens in constant 1992 dollars has remained virtually constant through the whole time period. Only the price of bacon has increased in those constant 1992 dollars and the increases in bacon demand due to its inclusion on hamburgers in the 1990s, sandwiches of many varieties in the 2000s and as an ingredient in everything from salads to ice cream to cookies in the 2010s has been widely discussed and well documented. Did the Kirkpatrick Foundation think Oklahoman's were not aware of the fact that the value of the dollar has changed? Or did they just think Oklahoman's were not smart enough to see through their ploy.
"But the foundation's other two "ploys" were even more disingenuous. The first is seen in the footnote to their misleading charts. "Source: Bureau of Labor Statistics Consumer Price Index" it says. It is true that the price data used in the graph comes from the Consumer Price Index report each month. But it is obvious that the foundation never used the actual Consumer Price Index - as I have done above -- in its calculations. While accurate, the citation strikes me as misleading since the Index itself was never used.
"And finally, note how the price axes in the foundation's charts are constructed to leave out zero and put each individual price on a scale that presents the largest possible rise in the chart. That's a trick to make the price change look as dramatic as possible. I know how to do that and have done it in cases where I wanted to demonstrate a large change to an audience. I don't believe I have ever used it to try to convince someone that a change was larger than it actually was. When combined with the use of nominal dollars, I think it is easy to conclude that was the goal in this case.
"Modern agriculture is a technological marvel that has consistently driven the real cost of food downward worldwide. Nowhere is that more true than here in the United States where only about 10% of our incomes are spent on all of the food we eat, whether consumed at home or from restaurants. Compare that with nearly 50% in parts of Africa and Asia. Is part of that gain due to industrial practices such as economies of scale and standardization of procedures, practices and products? Absolutely. Does everyone want product produced that way? No. But the beauty of the marketplace is that, if left alone, it will bring the vast array of goods that consumers want to them for the best price possible. Let's stay out of the way and allow consumers with a desire and enough money to buy specially-grown products that satisfy both their palates and their politics. But lets' also allow this marvel that is modern technological agriculture to continue delivering safe and nutritious products to those of us who must make every food dollar stretch as far as possible. To do otherwise would be shamefully unethical."
Click here to see the original graphs from the Kirkpatrick Foundation.
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