Whether it be for ethical, environmental, or health reasons, vegetarians around the world have long been making a compelling case for why they do not eat meat. However, knowing Americans, perhaps the most persuasive reason of all lies in targeting carnivorous Americans where they would be most empathetic: their pocketbooks, as opposed to their hearts. With the difference of up to $200 billion dollars at stake for reducing meat consumption in the United States, the financial argument is one that could lead many to reconsider what they’re really putting into their mouths. However, red meat seems to be the main victim in an increasingly vegetable-dominated world.  

This is profound news for a country where meat has always been a large cultural and historical component of the American diet. A majority of American holidays include meat as a staple item, including Christmas, Thanksgiving, Fourth of July, and perhaps the most revered American Holiday of all: the Super Bowl party.

For the past few decades, demand for meat has steadily risen or declined, based on the type of meat. Americans have been adjusting their meat consumption patterns in accordance to the variations of meat pricing over the years. Global Meat News reported this past September that beef and veal recorded a three percent decline in consumption, compared to a global increase of meat consumption steady with the world’s growing population. In 1972 alone, the average American consumed 144 pounds of red meat a year, according to the USDA (National Chicken Council). Comparatively, in 2015, the average American consumed only 104 pounds of red meat. However, consumption of poultry has increased from 50 pounds per American in 1972 to 106 pounds in 2015 (National Chicken Council). This increase in consumption of poultry over red meat can be attributed to two factors: recent red meat health fears and rising red meat prices.

Behind the rising price of red meat in the United States is lower supply of cattle due to the drought. Raising cattle requires more room and feed than other animals like chicken or turkey, making it especially costly to raise throughout drought conditions, directly impacting the supply of cattle.

Cattle pricing strategy in an extremely volatile market is incongruent amongst internal sellers and producers. To combat unsteady prices are multiple safety nets are in place to protect sellers and buyers. These vary per seller/buyer relationship, ranging from simple forward contracts and more complex options and plans. Ultimately fueling the volatility in the cattle market is the strong basis levels, or the difference between the cash sales price and the futures price. According to Rabobank’s global strategist animal protein Justin Sherrard:

“In the event a producer has had the opportunity to place a hedge or further position at a price level that offers a positive price for the cattle, a strong basis can be viewed as a bonus. This is because it enables the producer to capture the difference between his cash sales price and the offset to the lower-priced futures position” (Global Meat News, “Extreme Volatility”). With ever-changing prices, both beef processors and buyers become weary as they find difficulty setting prices that will help the overall market.

Further impacting the demand for meat in the United States are alarming headlines and announcements from health organizations, including, “Red Meat causes Cancer” and, “CSPI calls for a cancer warning on processed meat,” Americans have understandably turned to alternative meat products to satisfy their desire for protein (Global Meat News). However, demand for meat in outside countries have remained high, and with the lifting of a Chinese import ban on U.S. beef in September 2016, the price of beef has not yet dropped despite the low demand (Global Meat News, “Food trends”).

Many Americans have not yet considered how their individual meat consumption patterns could have a larger significant economic impact. In March 2016, the Proceedings of the National Academy of Sciences published a global-specific health model study describing the varied effects of adopting a diet with pro rata reduction in animal products, including ruminant meat, total meat, and dairy. According to Marco Springman, one of the study’s researchers, “It’s always hard to really get your head around what it means if you avoid climate change to [a certain] degree, or have one less person dying from diet-related diseases. We wanted to illustrate the scale of those benefits.” In comparing the world’s current meat consumption patterns to diets that abstaining from meat or are less-meat heavy, they were able to examine the subsequent economic impact of current meat-heavy diets.

The five researchers from the University of Oxford compared hypothetical situations set to arise in 2050 if the world were to continue their current meat-heavy eating habits. They compared these hypotheticals to the recommended diets proposed by healthy global diets (HGD), vegan, and vegetarian diets, and examined the subsequent impacts that current diet trends could have on healthcare, environmental, and value-of-life benefits.In order to access the economic valuation of the health benefits associated with dietary change, the study relied on both “cost-of-illness” techniques which included direct and indirect costs of informal care and lost work days associated with deaths from specific diseases– and “value of statistical life” which would estimate the cost of the lives saved under each dietary scenario. They found that changes in diet, particularly in Western high- and middle-income countries would reduce the number of overweight and obese people, by 29-40 percent. Furthermore, in combined healthcare, illness, and “value of life” costs, the study found that current meat-heavy diets are costing Americans between $197 and $289 billion annually (PNAS). In particular, America, for its high per-capita healthcare costs, is in a favorable position to save more money than China, or all of the EU countries combined (Atlantic).

Though the current meat industry as a whole slowly declining as Americans begin to adopt more plant-based diets, meat will most likely remain a staple for a majority of Americans. In recent history, red meat has received its fair share of media backlash, and in conjunction with its steadily rising prices, Americans are filling their carts with more reasonably priced meat alternatives. As beef prices are set to increase, whether Americans continue their health-conscious meat-eating behavior, or revert back to their red-meat eating ways will reveal the true motivations behind their changing diet. However, the study published in Proceedings of the National Academy of Sciences suggests that continuing reducing meat-heavy diets could not only change the hearts of Americans, but also their pocketbooks.

Sources:

http://www.globalmeatnews.com/Analysis/Food-trends-meat-consumption-up-beef-declines

http://www.theatlantic.com/business/archive/2016/03/the-economic-case-for-worldwide-vegetarianism/475524/

http://www.pnas.org/content/113/15/4146.full.pdf

Per Capita Consumption of Poultry and Livestock, 1965 to Estimated 2016, in Pounds

http://www.msnbc.com/msnbc/the-decline-red-meat-america

http://www.globalmeatnews.com/Retail/US-beef-industry-targets-millennials

http://www.globalmeatnews.com/Financial/Food-trends-Beef-pork-prices-to-fall

http://us.blastingnews.com/news/2016/09/beef-prices-to-come-down-usda-001146533.html

Birkenstocks. Tevas. Chacos. Mark’s.

Though you may not recognize the aforementioned shoe brands, you almost certainly have seen these “dad sandal” brands sported by millennials riding the wave of the infamous counter culture trend. Though most of the older generation has laughed and many more have scratched their heads in confusion, the dad sandal lives on as a reflection of the a growing market for “counter culture” products. Today, as millennials are set to inherit a significant portion of the purchasing power, the economic influence of counter culture trends are increasingly prevalent.

Counter culture, often referred to as “being hipster,” is often known as the rise of appreciating originality and going against the grain of what would be considered mainstream. Though appreciation for alternative fashions and trends are not a new phenomenon, they have a new-found importance in today’s economy due to increased globalism and increasing uniformity. As ideas are spread faster than ever before, cultural uniformity is an undeniable byproduct. Now, being “hipster” is influencing decisions of mainstream companies and trendsetters as they look to consume products reminiscent of being different. This sincere appreciation for individualism has manifested itself in an appreciation of smaller, independent companies and brands reflecting authenticity and alternative trends.

Prada, SS14

Today, appreciation for counter culture has led to the rise of small craft breweries outpacing Budweiser at 16.1 million barrels of beer annually, a twenty percent increase of independent bookstores since 2009, and three billion dollars spent on funding more than four thousand independent feature films in 2014 (New Yorker). Even high-end fashion brands Prada and Marc Jacob’s took influence from counter culture in their 2014 Spring runway shows, where models donned strappy sandals eerily resembling the “dad sandal” made infamous by shoe brand Teva a few years prior (Fashionista). According to Lorie Pointer, global product director of Teva, they have always continued to stay true to their brand. She says, “I think that’s what’s resonating with consumers right now: We are original. This is authentic product. Trends come and go, but Teva has stayed true to our nature.” The authenticity and alternative nature of Teva compared to more mainstream brands is what entices Teva’s alternative consumers.

Teva continues to receive partnership offers with high-end fashion brands like Opening Ceremony (Fashionista) whilst the brand expands its core consumer base. Though brands like Teva catering to an increasing number of consumers seeking authenticity, alternative culture, and originality grow in popularity and influence, big brands and companies are still essential to “high income countries,” as described by Tyler Castle of American Enterprise Institute initiative called Values and Capitalism. These big companies provide goods and services at reduced costs and more efficiently than their smaller counterparts. However, as big companies grow, Americans are increasingly enticed by the diversification and trust provided by small companies like Teva. Perhaps in the future, Americans can expect to see more surprising and confusing fashion choices similar to the “dad sandal” today, reflective of an aversion to lack of diversity created by globalism.

Sources:

https://www.theguardian.com/fashion/2015/aug/18/teva-original-universal-weirdest-shoe-trend-ever-is-here-dad-sandal

http://metro.co.uk/2016/09/19/teva-sandals-and-ugg-boots-have-collaborated-and-people-are-reeling-6136565/

http://www.bloomberg.com/news/articles/2016-09-21/the-billion-dollar-race-for-the-ugliest-shoes

How the Hipster Ethic Is Revitalizing the American Economy

http://www.forbes.com/2008/10/01/hipster-buying-power-forbeslife-cx_ls_1001style.html

http://fashionista.com/2014/03/how-tevas-became-the-most-unlikely-it-shoe-of-the-fashion-set

http://www.newyorker.com/business/currency/small-bountiful-small-business-craft-beer

Paying a little extra for avocados is an affordable luxury for most Americans. Many are willing to pay an extra dollar to incorporate avocados in their favorite tacos, soups, salads, wraps, and burrito bowls. Following the avocado’s newfound status as a staple food, increased consumption and difficulty harvesting in the United States has led avocado trade to become a lucrative crop for Mexico. Most Americans currently enjoy the nutty fruit blind to how the avocado’s gang-stricken trade impacts could continue to raise prices.

Image Source: https://www.washingtonpost.com/news/wonk/wp/2015/01/22/the-sudden-rise-of-the-avocado-americas-new-favorite-fruit/

In the United States, avocados are obtained from three main sources: Mexico, California, and Florida (The Plate). High worker wages, lack of rainfall, and an avocado-tree pathogen have greatly impacted production and profitability of avocado trees in the United States. Thus, the United States has increasingly relied on Mexico to satisfy its avocado needs, importing over 40 percent of its avocados from its neighbor (The Plate).

Avocado imports from Mexico began in 1997, after Congress lifted an eighty year ban on trading the fruit (NPR). The ban was lifted shortly after the introduction of the North American Free Trade Agreement (NAFTA), which ended most tariffs between Canada, Mexico, and the United States. American avocado producers were initially fearful of the risk of oversupply and exposure to pathogens that the influx of Mexican avocados could supply. Since 1997, a large number of American avocado producers have turned to facilitating avocado trade between the United States and Mexico as a profitable source of income.  In 2014 alone, Avocados from Mexico, a not-for-profit marketing association, reported that the United States imported over 1,763,593,888 pounds of avocados (Avocados from Mexico).

Today, Mexico is the leading global producer of avocados, producing three times the number of avocados as California and Florida combined. State Michoacan is Mexico’s avocado hub, accounting for 92 percent of the country’s production of the crop. More than 80 percent of Michoan avocados are exported to the United States (Daily Kos). With Mexican grown avocados generating $1 trillion in revenue for the country in 2014 alone, It’s no wonder that in Mexico, avocados have been dubbed the “green gold” (Vanguardia). Avocados produce more profit in Mexico than any other crop, including marijuana, making it a target for Mexican gangs who view it as a source of political and financial influence over areas like Michoacan.

The Caballeros Templarios (Knights Templar) are an example of a Mexican gang targeting the avocado industry. The Knights Templar are primarily known as a drug cartel trafficking cocaine and meth throughout the country. The knights view themselves as protectors of the Michoacan area, using a Robin Hood complex to take money from the rich to help sustain the poor. Now, the gang controls a significant portion of the Mexican avocado industry, from production to distribution (Daily Kos).

Image Source: http://mexiconewsdaily.com/news/a-thriving-industry-is-still-wary-of-cartels/

According to one Avocado trader, who changed his name to Jesus to maintain privacy from gang members, the cartel is already taking over land and avocado plants. The gang affects farmers, packers, and shopkeepers, taking a huge portion of profits under taxes and fees that they forcibly inflict. Workers are required to report the number of pounds produced per acre of land. The gang receives most of its revenue through administering taxes ranging from ten cents per pound produced to $100 per hectacre of land (Daily Kos). Lying or failing to abide by the gang’s policies often results in violent punishments, including rape, death, and destruction of homes of farmers or their loved ones.  Three weeks ago, one notary in Uruapán who refused to sign the deeds to his plantations over to the cartel was severely punished: his son was kidnapped and killed a few days later.

The result of increased crime has led to instability and fears for those in the avocado industry. It has impacted the numbers of those involved in the industry, thereby decreasing supply and raising prices. Though American avocado traders have not revealed the specific financial impact the gangs have had on the prices of avocados, Jesus says that the gang inevitably racks up prices for those in the avocado business trying to stay afloat amidst their high taxes. Ultimately, these price increases make their way all the way up past the Mexican-American border and into grocery shelves across America.

Prices of avocados in the United States have been on the rise for years, but began taking a sharper turn starting in 2013. In 2014, the average price of a Hass avocado was $1.29. In 2015, it went up to $1.38 (Hass Avocado Board). However, avocado demand has remained high as ever. Avocados are continue to fly off the shelf, even if rising prices leaves Americans saying, “holy guacamole!”

Sources:

http://www.vanguardia.com.mx/lostemplariostomancontroldelnegociodelaguacate-1888691.html

http://www.12news.com/news/nation-now/holy-guacamole-avocado-shortage-causing-prices-to-soar/346400878

http://www.producenews.com/the-produce-news-today-s-headlines/19948-avocado-picking-resumes-volume-to-ramp-up-quickly

http://www.theatlantic.com/health/archive/2015/01/the-selling-of-the-avocado/385047/

https://www.washingtonpost.com/news/wonk/wp/2015/01/22/the-sudden-rise-of-the-avocado-americas-new-favorite-fruit/

http://theplate.nationalgeographic.com/2015/05/05/thanks-to-america-weve-reached-peak-avocado/

https://thinkprogress.org/chipotle-warns-it-might-stop-serving-guacamole-if-climate-change-gets-worse-d797f64a932c#.9pird9xu1

http://www.dailykos.com/story/2016/7/12/1546610/-Avocados-and-the-Mexican-Drug-Cartels

http://www.hassavocadoboard.com/retail/volume-and-price-data

http://www.npr.org/sections/thesalt/2015/02/13/385754265/how-nafta-changed-american-and-mexican-food-forever

About AFM

Last year, Nike brought back their Air Cortez sneaker in the White/Varsity Royal-Varsity Red color scheme– the very same style Tom Hanks was seen donning in the 1994 movie Forrest Gump. Producing this shoe is incredibly labor-intensive– its leather stitching, exposed padding on the nylon tongue, and crisp white laces have undoubtedly been produced in one of hundreds of thousands of Nike’s manufacturing plants outside of the United States. However, a significant portion of what consumers pay for when purchasing shoes like the “Forrest Gump sneaker” go not only towards manufacturing costs, wages, and shipping, but also tariffs and shoe taxes. Unbeknownst to many, outdated shoe tariffs have been contributing to the rising costs of shoes and have led to many Americans, like Forrest Gump, running their shoes into the ground.

In status-driven industries like fashion, there tends to be a high demand for stylish, high-quality products at a fraction of the cost. With a globalized economy and companies increasingly outsourcing plants to take advantage of cheaper labor, locally produced brands have found difficulty competing with low prices. In order to counter the low costs of the textiles and apparel imports, the United States government has imposed incredibly high tariffs of up to 67.5 percent compared to an average 1.4 percent on most other goods to protect the United States’ dwindling domestic manufacturing supply chain (The Hill).

The shoe tariff was created in 1930, when the United States boasted a large domestic footwear manufacturing base (The Hill) that needed protection from foreign companies. Back then, footwear manufacturing was even more labor intensive than it is now, with each stitch handmade and leather tediously done. Numerous European craftsmen brought with them knowledge and credibility in the art of shoemaking, which helped the United States manufacturing base flourish. Since the rapid globalization of the shoe industry, cheaper labor across seas made manufacturing in the United States less practical. Today, European shoemakers are no competing with the United States for shoe manufacturing, but counterfeits and cheaper goods from countries like Vietnam and China.

Generally, imposing high tariffs are meant as a supportive measure for the domestic manufacturing market. Raising prices of incoming goods keeps prices competitive for imports and domestic products, thereby encouraging United States consumers to continue supporting the United States economy on a local level. In the United States, over 99 percent of shoes are imported, mostly from Asia (Wall Street Journal). However, these tariffs still exist to protect the remaining one percent, whilst most Americans cannot name three American shoe companies manufactured in the United States.

An example of a company benefitting from the high tariffs is New Balance, an American sneaker company, and one of the last to continue manufacturing in the United States. Even New Balance, however, says that it is struggling to keep manufacturing in the United States. Though Mr. DeMartini, CEO of New Balance, insists on keeping manufacturing in the United States, stating that New Balance’s U.S. plants are “twice as effective” as Asian plants, and that “we learned a lot because we had to in order to survive” (Wall Street Journal), the company is still facing difficulties to keep work in the States. New Balance still manufactures two-thirds of its shoes across waters, and relies heavily on machinery in order to keep costs profitable. This begs the question: Are the high tariffs imposed on shoe companies simply supporting jobs that we can no longer afford to keep in the United States? And, if this is the case, are American consumers the ones suffering the burden through unnecessarily high costs of shoes in order to protect that small one percent of shoes manufactured here at home?

Nike is one company protesting the high tariffs. Nike claims that current money going towards tariffs and taxes could go towards research and development advancing sustainability and innovation. The company argues that lowering tariffs can actually increase manufacturing jobs in the United States by allowing the company to develop advanced manufacturing methods that would make keeping jobs in the U.S. more practical. Last year, Nike had upwards of $28 billion in sales, $2.7 billion of which went towards taxes and tariffs (Nike declined to state what percentage of tariffs went towards shoe sales specifically) (NPR).

The remaining 99 percent of shoes manufactured abroad pay a significant portion of their budget towards shoe taxes, which in turn ups the prices of shoes for unsuspecting Americans. Whilst shoes are considered a necessary household expense, the highest shoe tariffs seem to be on shoes that are supposed to be cheapest– children’s shoes and low-cost-to-produce sneakers. According to Economist Bryan Riley, shoe tariffs increase costs of the cheapest shoes by about one-third. This in turn impacts how families living paycheck-to-paycheck end up spending money in other household necessities, like groceries. Purchasing goods and services to support their children and their family’s health are affected unnecessarily.

Americans should take a second look at how the tariff can be impacting their everyday purchases. Though the 1930s Tariffs once held a significant purpose in the United States economy, it has since lost its importance as American manufacturing work has traveled overseas. Though some may consider sparing a few dollars to keep the few American manufacturing jobs that select shoe companies have maintained, those most negatively impacted by the tariff are those who can’t afford to.

Sources:

http://www.usalovelist.com/american-made-shoes-ultimate-source-list/http://www.aei.org/publication/the-us-has-imposed-protective-shoe-tariffs-on-americans-for-decades-even-with-no-domestic-shoe-industry-to-protect/

The Economy and a Pair of Shoes

http://www.npr.org/sections/itsallpolitics/2015/05/08/405196569/would-lower-shoe-tariffs-actually-encourage-american-jobs

http://thehill.com/blogs/congress-blog/economy-budget/264019-footwear-needs-tariff-relief

http://www.wsj.com/articles/SB10001424127887323764804578312461184782312

http://money.usnews.com/money/personal-finance/articles/2011/10/28/how-consumers-and-communities-can-benefit-from-buying-local

http://www.usnews.com/opinion/blogs/economic-intelligence/2012/09/21/the-wasteful-culture-of-forever-21-hm-and-fast-fashion

http://www.forbes.com/sites/danikenson/2013/07/23/textile-protectionism-in-the-trans-pacific-partnership/#275d91d593a8

http://www.wsj.com/articles/SB10001424127887324735104578123523795505336

http://hypebeast.com/2016/7/nike-classic-cortez-og-forrest-gump

Most are aware that having a debt crisis or financial hardship may lead to many increased mental health issues, namely depression, anxiety, and suicide attempts. However, there lies a far less known connection that mental health is often tied to family finances, employment longevity and duration. Mental health should be something to be stressed when the economy leaves the public stressed.

Take for instance, Greece, a country currently faced with financial crisis. Media coverage often reports high unemployment rates, closing of banks, and political uncertainty. However, far less coverage is done on how political and financial uncertainty negatively affects the mental health of the Greek people. New research reveals a 35 percent jump in the suicide rate during the first two years of austerity programs, with a direct correlation in additional unemployment to an incremental increase in the suicide rate among working-age men. Clinical depression rates have also increased from 3.3 percent to 8.2 between 2008 and 2011.

The issue in Greece is that whilst the need for mental health support is increasing, the government’s austerity measures is resulting in dwindling healthcare. Hospitals are overflowing, and less than half of the Greek population is able to afford healthcare. In an attempt to decrease the debt that is causing so many mental problems, the Greek government has forgotten the consequences of allowing existing mental problems to brew without treatment. Those with mental health problems tend to be pushed into poverty, namely due to increased health costs, loss of employment, reduced work hours, and stigma.

No matter the public’s stance on Greece’s austerity measures, the mental health statistics in Greece reflect how factors on a microeconomic level can have large implications on the overall global economy.

Sources:
http://www.thelancet.com/journals/lancet/article/PIIS0140-6736%2811%2961633-4/fulltext

David Stuckler on Austerity and Death

http://www.newsweek.com/greek-crisis-has-seen-rise-suicides-and-depression-353056

Cases of Mental Illness in Greece Have Increased

As people become vulnerable with their pocketbooks, do they become vulnerable to loneliness as well? Statistics from online dating sites demonstrate that tough financial times correlates with higher numbers of people surfing the web for someone to commiserate their pain with.

These findings are supported by various online dating sight’s financial and user data. Match.com’s website traffic and quarterly results reported having the busiest site traffic during 2008’s turbulent financial crisis. They additionally reported their best fourth quarter in seven years during 2008, the same time as the Dow Jones reported a five-year low (HCPLive). This data differs from previous Novembers, which are notorious for being a particularly slow month for online dating sites.

According t0 Perfectmatch CEO Duane Dahl, the turbulent economic period after 9/11 and the end of the dotcom bubble led to a 200 percent membership increase. Dahl credits this hike in numbers to the public’s desire to find comfort in a partner, either to console their financial stresses or solve them. The poll, sponsored by eHarmony, shows that respondents those who said they felt stressed by the current economy were 14 percent more likely to aim to be in a long-term relationship within a year, compared with those who were not stressed by the economy (Time Magazine).

Though there are numerous potential explanations for this phenomena, off site dating experts have contributed them to 1) more time spent online and 2) loneliness heightened by stress. Theoretically, tougher economic times results in people staying home more often. This inevitably results in people spending more time on their computers, clicking away at their potential matches on online dating platforms. At only $35 a month, online dating is cheaper than blind dates as well, making it a more viable option for those on a budget. Whilst the public turns to online dating to find their next relationship, economists can turn to their membership numbers to determine the status of the economy.

Sources:

http://cityroom.blogs.nytimes.com/2009/05/04/how-has-the-recession-affected-your-dating-life/?_r=0

http://www.nytimes.com/2009/02/12/fashion/12dating.html?scp=1&sq=dating%20recession&st=cse

http://www.hcplive.com/physicians-money-digest/investing/bizarre-but-used-economic-indicators#sthash.MvcAoGhx.dpuf

http://content.time.com/time/business/article/0,8599,1868694,00.html