The Ugly Truth Behind Cheap Food

Source: Wikimedia Commons 

In a different article  this week, I did my level best to capture all of the positive economic benefits that come along with cheap food. Chief among them is how the cash that would have been spent on food is freed up and put to use elsewhere—creating jobs and spurring innovation.

This cheap food is the product of the combination of new farming technology, increased usage of fertilizers, and genetically modified crops (GMOs).  But is it possible that with such huge food surpluses, we've got too much of a good thing going on here?

When Bad Food is Cheap

Aniruddh Chaturvedi was a student from Mumbai, India who attended Carnegie Mellon. Upon leaving the United States, he shared some of the most surprising things about our country with Business Insider. Among them: "Rich people are thin/ well maintained, poor people are fat. This stems from the fact that cheap food is fatty, rich people don't eat cheap food — they tend to eat either home-cooked food which is expensive or eat at expensive / healthy places." 

Though I would argue that home-cooked meals can be very affordable—you just need the time to make them—Chaturvedi points out an important aspect of our agribusiness model: food that is really bad for you is also very cheap. One look at McDonald's dollar menu will tell you that.

This wasn't always the case. But a combination of subsidies to overproduce corn following World War II, and cheap meat being processed in overcrowded farms—and fed some of this very corn—has created the perfect storm  for bad health. Right now, processed corn is present in at least one-quarter of all food products in a supermarket .

As fellow Fool Alex Planes wrote last year, though the cost of feeding America's youth has declined by 19% since 1960, the cost to keep them healthy has risen by almost 150%!  

Of all the stats, two simple pictures tell the story the best.  

Obesity in America, 1990

Source: CDC

In 1990, it was difficult to find a state with a population of obese residents making up over 14% of the citizenry.  But just 20 years later, there wasn't a single state in the union with obesity rates that low!

Obesity in America, 2010

Source: CDC

Monospeciation and Mutations
The overabundance of corn alone isn't to blame for Americans' poor health. But because all of that land in middle America is being used for corn or soybeans only, there isn't enough left over to produce non-processed fruits and vegetables—what Americans need more of.

Farmers can't shoulder all of the blame; they are incentivized by subsidies to produce corn. And though local farmers' markets are growing , unless there are enough hungry people nearby, most produce doesn't have anywhere near the shelf life of corn.

And the increasing monospeciation of the American farmland -- which is dominated by corn and soy, and helps keep food cheap -- presents some unique and scary possibilities when it comes to food security.

Monsanto (NYSE: MON  ) was the first company to have a GMO seed on the market for U.S. public consumption, but DuPont (NYSE: DD  ) and Dow Chemical (NYSE: DOW  ) quickly followed in Monsanto's footsteps. Together, these three companies control enormous market share for corn seeds and processing.

In Monsanto's case, the idea is that by buying GMO corn seeds that are resistant to the company's Round-Up herbicide, farmers can plant corn, then use the herbicide, knowing that once-harmful weeds will be killed.

In theory, that sounds great. In practice, nature has always favored adaptations, and weeds are no different. In 2010, Popsci noted  that genetic mutations had led to superweeds that were Round-Up resistant. Because Round-Up Ready GMO crops accounted for 90% of soybeans and 70% of corn and cotton in the United States, these superweeds posed a significant threat to our supply of soy, corn and cotton.

Obviously, three years later, we're still here; no doomsday scenario played out. But we're clearly following the same tortuous pathway: inviting superweeds (or pests) to develop while simultaneously planting more crops that we can't defend when they hit. It's a recipe for disaster.

Booming population
In his 1992 best-seller Ishmael, author Daniel Quinn controversially argued that increased food production isn't a necessity of increased population -- but that the other way around.

Globally, Quinn argued, we humans will always grow our population to meet that of the food supply. We are, after all, simply made up of food in the first place. The more food we cheaply produce, the more our (global) population will grow—even if that food is grown in America and shipped off to other continents.

A hypothetical case from nature provides an easy-to-grasp example. Let's say wolves eat rabbits. As the number of rabbits grows, so will the wolf population. That is, until the wolves eat too many of the rabbits, then the wolf population will slowly dwindle. At some point, it will dwindle enough so that the rabbit population spikes again—and the cycle starts all over. Both populations are kept in check.

In essence, as our resources dwindle, we become less likely to reproduce.

While some may scoff at the idea, the Great Recession provided vivid proof of Quinn's assertion. As Pew Research demonstrated , our birth rate closely mimics our per capita income, and following the Great Recession, the birth rate in America took a precipitous fall.

Source: Pew Research Center

I'll show my cards and tell you that, in reality, I think there's a whole lot of damage done when food becomes as cheap as it is in America.  Not only is our particular system of agribusiness producing unhealthy food, but it's also damaging the environment and a key factor in unsustainable global population growth.

In the end, I'm not saying that we should artificially make food costs higher, or that a growing population is an inherently bad thing. Instead, I would argue that food as cheap as it is now is a historical anomaly, and that for better or worse, there are consequences for deviating so far from our evolutionary norm. Eventually (over hundreds of years) I wouldn't at all be surprised to see us revert back a more-normal mean

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Read/Post Comments (12) | Recommend This Article (11)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 19, 2013, at 12:27 PM, mdk0611 wrote:

    As you say, home cooked meals CAN be affordable. And really, when compared to going out and picking up fast food, how much extra time is REALLY involved? You don't have to watch the food cook.

  • Report this Comment On September 19, 2013, at 12:46 PM, TMFLomax wrote:

    Brian, as usual a great article.

    For those who are at least interested in GMOs and the attached issues (and I believe in labeling and keeping an eye on it, but by no means do I eat all organic, although i try to as much as possible) -- once you start looking at the labels, as you say, the amount of foods that contain corn and soybeans is absolutely stunnning. Plenty of foods you wouldn't ever think could include say, high-fructose corn syrup... wow. (Although I have noticed more shifts, like companies clearly stating they do not include GMOs, or high-fructose corn syrup etc.)

    I would also agree with you and mdko611 on the point that home-cooked meals can be affordable done thoughtfully, and often cheaper than eating at middle- or higher-end restaurants. I think with the amount of people working long hours though, many people feel so squeezed for time and the perception that it's more "expensive" also includes the "time is money" aspect, and I'm guilty of occasionally feeling like chopping things up and putting together ingredients, then a relative large amount of dirty dishes (and I'm single with no kids) just seems like a lot.

    Your points are really good and well-researched though. Anyway, in covering food issues lately, I find your pieces really enlightening and good "food for thought" (OK, that's just a terrible overdone turn of phrase, but I couldn't think of anything better in having wanted to give some relatively quick feedback!)



  • Report this Comment On September 19, 2013, at 1:04 PM, SkepikI wrote:

    ^ <I would also agree with you and mdko611 on the point that home-cooked meals can be affordable done thoughtfully, and often cheaper than eating at middle- or higher-end restaurants. > Hilarious. Laughed myself silly on these comments and that portion of the article. Is this what passes for thoughtful insight and discovery for those under 40? I am sad that your grandparents were missing in action.

    Almost as amusing as the proliferation and fashionable status of backyard chicken coops in the Pacific NW. I am picturing my deceased Aunt eying one of her lazy layers and remarking "I have a stewpot for you!" and trying to imagine a current chicken keeper doing the

    Still, I have to admit I found the discussion on monocultures and adaptation interesting.

  • Report this Comment On September 19, 2013, at 1:31 PM, mdk0611 wrote:

    You think I'm under 40? God Bless you Skep!

  • Report this Comment On September 19, 2013, at 2:15 PM, Schneidku40 wrote:

    I think the hype about GMOs is a little overblown. As you pointed out in the article, most genetic engineering is done to make a plant resistant to a pesticide or herbicide. This does not inherintly make it dangerous to humans. Native peoples the world over practiced genetic engineering millenia ago when they selectively bred plants that grew heartier, had higher yields, grew better in drought conditions, or had other properties they wanted.

    I know it's a little off topic, but pesticide-resistance buildup in the targeted pests is no different than the antibiotic-resistant strands of "super bug" bacteria that have formed due to our antibiotic use in medicine.

    Overall though I like the article, especially the figures of the US. That really paints the picture. But I believe human innovation will prevail. There are many ways to kill weeds, and if they start becoming immune to one pesticide, others will be formulated that will work.

    I think the problem stems more from personal choice than the available foods (ESPECIALLY the parents' choices). Producers produce that which is demanded. If stores were consistently sold out of fruits and vegetables, additional farmers would change from planting corn to planting fruits and vegetables. As it stands, those cheap foods made with high fructose corn syrup, etc., are apparently what is being demanded. Consumers would rather spend $400 on an Iphone than eat correctly. Until that changes, McDonalds's stock will probably continue to go up.

  • Report this Comment On September 19, 2013, at 2:48 PM, TMFCheesehead wrote:


    Thanks for the comments. I would argue that the type of selective breeding that took place millenia ago was fundamentally different than what GMOs do.

    As someone said recently: "Evolution is like throwing a bullet at me and I adapt and catch it. The way we are changing things right now is like putting that bullet in a gun and firing it."

    As far as GMO health concerns, I simply haven't read any findings that are conclusive enough--which makes sense because they haven't been around for that long.

    Brian Stoffel

  • Report this Comment On September 19, 2013, at 4:36 PM, devoish wrote:

    Reading material for Brian -

    Best wishes,


  • Report this Comment On September 19, 2013, at 4:39 PM, devoish wrote:

    BTW - The article is a good start toward reaching the ultimately correct conclusion that the biggest reason food is as cheap as it is in America, is because of the impoverishment of the people who provide it.

    Best wishes,


  • Report this Comment On September 19, 2013, at 4:53 PM, Jim12567 wrote:

    How do you explain the low per capita income in developing countries and high birth rate?

  • Report this Comment On September 19, 2013, at 5:21 PM, Schneidku40 wrote:

    Nice link Steven, I was just able to scan it quickly now but I'll read it in more depth later.

    I must admit my opinion is biased at this point because my dad and grandpa practice no-till farming, which conserves soil but necessitates the increased use of herbicides.

  • Report this Comment On September 19, 2013, at 7:18 PM, digitalags wrote:

    I really do despair for the future of humanity, when people hold the views expressed by some of the contributors here. One reader says that mutating food to make it resistant to weeds etc is no different to the increase in super bugs due to the use of anitbiotics. EXACTLY!!!! So why then hope that we can develop other strains of corn that will be resistant to herbicides, and new herbicides that will kill the resistant weeds. Do we really wan the weed version of Golden Staph?This is a never ending circle with no winners. Maybe the solution is to get rid of Mosanto, Dow, DuPont etc, and bring back the farmers with some common sense.

    Another issue that shocked me was the writer's comment that the money spent on food could be better spent on creating jobs and innovation. Sorry, it wouldn't be better spent on those things. Money is a tool for bartering - it doesn't have magical powers to solve all that ails us. Demand will create jobs. Curiosity will drive innovation. While money has a valid part to play in both (as an instrument in the bartering process), the believe that it is our salvation is what has driven America to the pitiful state it is in now. The parlous state of our food producing society is probably best reflected by the situation where users of Mosanto's GM products can sue neighbouring farmers whose crops are affected by wind drift of GM pollen and become "infected". Rather than the GM farmer being penalised for allowing the wind drift, the victim is penalised for getting the "benefit" of the GM. How scary that large companies can buy such protection.

    In Australia, we have a problem with the duopoly supermarkets driving prices down, by paying the producers as little as they can. I think therefore that the comment that the reason food is cheap is because of the impoverishment of its producers, is a little awry. In our case, the producer is poor because he can't get a fair price for his products, and that's because not enough of us think about how we use our dollar to safeguard our future against these large companies.

  • Report this Comment On September 19, 2013, at 9:50 PM, TMFCheesehead wrote:


    Lower infant mortality due to newly introduced medical technologies. There's usually a one-generation lag as people's behavior adjusts to the fact that a much higher proportion of children survive to adulthood.

    Brian Stoffel

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