The Cost of Local Food

There has been a lot of conversation about local food and one of the criticisms has been its high cost.  Local meat does cost more, but it is important to understand what is driving the cost, and what actions could be taken to reduce cost.  Every economic decision we make has consequences and the commercial food system can provide cheap food, but not without repercussions.  In this example I will use pork, but the results are just as applicable to local lamb, beef, chicken, and turkey. 

There are three primary drivers of cost: processing, feed, and labor.  It cost about $1.65/lb to process local pork.  You can buy pork cheaper in a store than what it costs to pay a local meat processor.  So why the high cost for local?  There are two local USDA processors, both process fewer than 15 animals per day and operate in a custom model where every pig, cow, or lamb is processed to customer requirements.  This requires a higher skill level, and those processors will make over $10/hour.  Reducing the processing cost is simple: move to an economically efficient factory model that processes thousands of animals every day, hire low skill level workers who make minimum wage, and have those workers do the same thing thousands of times a day.  A mass production processor costs a fraction of what it costs to do locally.  The down-side is you end up with poor working conditions and higher risk of e-coli and other bacteria.  You cannot operate a high volume meat processing facility with the same level of cleanliness and care for the animal that you can at our local processors. 

The next driver is feed cost, which amounts to $1.80 per pound.  We raise heritage breed pigs that predominantly eat pasture grass.  We provide 2-3lbs of grain each day that we purchase from a local feed supplier.  The feed is predominantly corn and soybeans purchased from the Midwest, combined with some vitamins and minerals.  During the winter, when our pasture is not available, we have to purchase orchard grass and alfalfa.  Our pigs take about 10-12 months to reach maturity and are slightly smaller than grain fed commercial pigs that reach maturity in 6 months.  Our pigs are not as efficient in their feed use, by using breeds of pigs that are more efficient it is possible to bring the cost down, but not enough to explain the entire difference.  It may also be possible to purchase feed at a lower price if you were buying larger quantities. Feed costs could also be substantially reduced by using non-grain filler material that is much cheaper than corn and soybeans.  Feed does have an impact on taste; grass fed heritage pork is leaner and more flavorful, and has a different texture and color than the pork you buy in the store.

The third driver is labor, which costs about $1.05 per pound.  This provides the local farmer with a reasonable hourly wage to care for the animals 365 days a year.  Large, automated factory models can bring down labor costs by putting large numbers of pigs in a small area and using technology to monitor the animals. The labor costs, correspondingly, gets divided across the larger number of pigs.  We raise about 60 pigs a year, compared to factory farms that raise thousands each year.

Not everyone can afford local meat; it will always cost more because of the lack of high volume processing and factory operations.  It costs about $4.50 per pound to raise local pork, far higher than what it costs to purchase mass produced pork in the grocery store.  This amount does not include smaller expenses like maintaining breeding stock, supplies, recouping the initial investment, and any profit for the farmer, nor does it include any mark-up for the retail establishment that sells the meat.  It is easy to drive costs down, but it requires using factory farming techniques that produce massive quantities of food in small spaces and then using those same mass production techniques to process the meat.  The consequences of these factory farms are becoming clear as we increasingly need legislation to further regulate our food system and prevent unsafe food.  We are also learning that cheap food impacts the disposition and personality of the animals and the taste of the meat.  Cheap food does have its consequences and the local food debate needs to include not only the economic cost drivers, but the real impacts on taste and animal husbandry practices.