If anything, globalization increased the cost of meat in America

American Thinker ^ | April 19, 2016 | Sierra Rayne

[expat_panama]

Returning to this quote from Kevin Williamson's well-known article from National Review:

The manufacturing numbers -- and the entire gloriously complex tale of globalization -- go in fits and starts: a little improvement here, a little improvement there, and a radically better world in raw material terms (and let's not sniff at those) every couple of decades. Go back and read the novels of the 1980s or watch The Brady Bunch...

...the cost of butter was not a major financial concern for well-to-do families in the 1980s, or now. But another of Williamson's points needs to be addressed: the effect of globalization on meat prices.

Globalization started to kick in during the mid-1990s, and by the late 1990s it was well underway...

...All types and grades of beef have seen prices explode since the mid- to late-1990s. The following chart shows the price of ground chuck since 1980, and it is representative of what has happened to beef in general:

Between 1980 and 1999, the price of ground chuck was approximately constant in nominal terms, while the general inflation rate was 100% (i.e., average prices doubled). Thus, the real cost of ground chuck in the pre-globalization era declined by 50% during the 80s and 90s. Since the end of the 1990s, the nominal price of ground chuck more than doubled, while the average inflation rate was just 42%.

Same thing happened with other food groups: flour, eggs, cheese, most fruits and vegetables, various cuts of chicken and pork, and so on.

...

...The two most fundamental needs are food and shelter, and globalization has certainly not reduced the real costs of these....

...Dismiss the silent majority and you lose elections...

[Nervous Tick]

>> He can’t lose!

Here’s hoping he finds a way. At the primary stage, that is. :-)

[McGarrett]

DDG’s limited the cost impact for feedlots, but it’s no coincidence that after beginning a cyclical expansion in 2005, the U.S. cattle population quickly reversed course in 2007 (after peaking at 97 million on Jan 1, of that year) and the next liquidation phase didn’t end until sometime in 2013. Admittedly, drought extended the contraction, but there’s no doubt that a lot of small ranchers and cow-calf operators exited the business, while Midwest grain farmers made out like bandits.

[expat_panama]

...adjust the price of food for inflation but what about...    ...income always lags....

My bad if I ran w/ too many buzzwords, but up at post #1 my link to real percapita income was the idea that "real" means adjusting for inflation just like we adjusted the price of food for inflation.  Also population was covered by "percapita" = per person.  Here's the average inflation-corrected American income per person that I linked--

--it's doubled in 30 years.   That's why I said it takes half as long to work to feed ourselves now than it did for our parents.

 

[Chgogal]

http://news.heartland.org/newspaper-article/2013/01/28/study-ethanol-mandates-causing-spiraling-us-food-prices

From NPR
Fuel Vs. Food: Ethanol Helps Boost Meat Prices
http://www.npr.org/templates/story/story.php?storyId=132136255

The U.S. corn crop is enormous. But about a third of it doesn't go to cereal or cows — instead, it helps run your car. To boost our use of renewable fuels, the federal government subsidizes corn-based ethanol.

This has the meat and dairy industries up in arms over the high cost of their main feed. The rise of ethanol has pitted livestock producers against the oil industry......

.......But let's get out of the kitchen for a minute — this is a story about corn. Because when you're eating meat, you're indirectly eating lots of corn. Far more corn goes into the meat you're eating than into a box of cornflakes.

.....When it comes to raising meat, eggs and dairy, feed is the biggest cost. And, most likely, that feed is corn.

For years, the livestock industry was the main buyer of cheap and plentiful corn. Then came the ethanol mandate in 2005. Ultimately, the government required that Americans use about 13 billion gallons of ethanol in 2010. And the way we make ethanol here? Yep, you know this one: corn.

To further boost using corn to fuel your car, Congress created subsidies paying gasoline blenders for every gallon they blend with ethanol.

Not surprisingly, since the ethanol mandate was enacted five years ago, the ethanol industry's corn consumption has tripled. Our cars now burn up a third of the nation's corn crop.

“I don't see why we can really justify subsidies, when all that does is raises cost of producing food,” says economics professor Bruce Babcock, of Iowa State University.

Ethanol policies increase the cost of food at least 1.5 percent, Babcock says. And the impact on meat prices is significantly greater.

It's economics 101, he says. Ethanol plants increase the demand for corn, driving up the prices for other buyers — like livestock producers. International demand is up, too – and we're exporting more ethanol than ever before. Many grain farmers are seeing record incomes this year.

[DoughtyOne]

[expat_panama]

...economics 101, he says. Ethanol plants increase the demand for corn, driving up the prices...

What I'm looking at is that the price of corn has not gone up. In fact, adusted for inflation--

--corn's at the low end of its long term range.  This is where the econ prof usually says "your goofy low-corn-price story may be all well and good in practice but in the cold hard world of theory it just falls apart."

[Chgogal]

I remember beef being about $2.99/lb before the ethanol debacle. Now it's $4.99/lb. I doubt if globalization has anything to do with that.

Here is the proof.
http://data.bls.gov/timeseries/APU0000703112