Adam Ozimek -- blogger at Modeled Behavior and associate at Econsult Corporation
There have been a lot of complaints and outrage lately over the beef product known as "pink slime." Officially called Lean Finely Textured Beef (LFTB), these are beef additives made from processed trimmings of beef leftover from other cuts. It's worth considering some of the economic issues involved in pink slime.
Many seem to have the impression from the complaints that there is something unsafe or unhealthy LFTB. For instance, the following comes from the Change.org petition asking the USDA to ban pink slime from schools:
Two former government microbiologists claim that, for political reasons, pink slime was approved for human consumption by USDA over serious safety concerns...
Even apart from safety concerns, it is simply wrong to feed our children connective tissues and beef scraps that were, in the past, destined for use in pet food and rendering and were not considered fit for human consumption.
Despite these complaints about safety and whether the meat is "fit for consumption," if you read the pink slime critics who are knowledgeable of such things, you'll see that these claims are false. For instance, Marion Nestle reports that it "is not really slimy and it is reasonably safe and nutritious". If safety and nutrition aren't a problem, then why shouldn't we eat it? Economist Robin Hanson has a saying that helps explain phenomenon like this. The short version is "politics isn't about policy", but it's really a general theory of human belief and behavior he summarizes using the following list:
- Food isn't about Nutrition
- Clothes aren't about Comfort
- Bedrooms aren't about Sleep
- Marriage isn't about Romance
- Talk isn't about Info
- Laughter isn't about Jokes
- Charity isn't about Helping
- Church isn't about God
- Art isn't about Insight
- Medicine isn't about Health
- Consulting isn't about Advice
- School isn't about Learning
- Research isn't about Progress
- Politics isn't about Policy
Instead, most of these things are about signaling something else about ourselves. If people's desire to regulate pink slime isn't about health, safety, or even taste, then what is it about? Robin would probably suggest that it is about signaling. Pink slime is seen as low status, and even though consuming it is not bad for our selves or our children, we would ban it to show that we care. This Hansonion hypothesis is borne out pretty clearly by a lot of pink slime complaints. Nestle herself makes it about as clear as possible that signaling is why she is critical of pink slime:
Even if LFTB is safe, nutritious, and tastes like hamburger, it may not be culturally acceptable. Do we want LFTB in our food? Or do we and our children deserve better? Serving healthy and delicious food is a way to show respect for our culture, food, children, and schools, and to invest in the future of our nation.
Our children deserve "better", but better in what way? Apparently not safety, nutrition, or taste. Many people aren't opposing pink slime because it's bad for us, but because doing so shows that we care.
The problems with the anti-pink slime campaign extend beyond this though. Pink slime is what economists would call a joint product with other cuts of beef. A joint product is when there is some shared costs for multiple products that can't be attributed to any of the products individually.
In this case the joint products are the various beef cuts of beef and pink slime, and the shared costs include things like the price of raising the cow. In these cases profit maximization means considering the total marginal revenue of each unit, which in this case is each cow. A decrease in the demand for the pink slime will drive down the marginal revenue of a cow, which will lower the profit maximizing number of cows produced.
However, that is not the end of the story, because pink slime is also a substitute for other parts of the cow, namely ground beef. Schools that are replacing pink slime seem to be doing so with ground beef rather than, say, vegetables. This means that a lot of the decline in the demand for pink slime will be offset by an increase in demand for normal ground beef, which will mean more cows will be slaughtered.
So will the number of cows produced and slaughtered increase or decrease? In the end, the cattle industry reports that this filler saves about 10 to 12 pounds of edible meat from every cow, and this is the equivalent of 1.5 million heads of cattle. Despite the lower revenues from each cow discussed above, the demand shift effect will likely outweigh the lower profit effect so that the net impact will be a significant increase in the number of cattle that will be raised and slaughtered every year.
You are probably wondering why we should even care how many cows are produced? After all, if a cow ever got the chance, he'd eat you and everyone you care about. But in his forthcoming book, An Economist Gets Lunch, Tyler Cowen argues that less cows are a good thing given the polluting methane that they produce (cow farts). So we should worry about the negative environmental externalities that this increased production of cows lead to. In addition, Nestle reports that half of weight of the 34 million cattle slaughtered each year goes to human consumption, and some of what doesn't get eaten goes into landfills or gets burned up, which could also create environmental costs.
While the environmental impacts of getting rid of pink slime aren't certain, intuitively we should not find it too surprising if it turns out getting less food out of each cow is bad for the environment. With no health or nutrition gains to be had, I don't see how the pink slime critics claim the moral high ground here. This is another example of society engaging in potentially costly signaling just to show each other that we care.