McDonald's and the End of Beef

georgia-okeefe-cows-skull-red-white-blue-cropped-500x500Americans consume more meat per capita than any other nation (about 265 pounds/year). Indeed, one way to grasp our national vastness is to consider the sheer quantity of the killing that occurs every year to keep meat at the center of our food economy. Not constitutionally disposed to appreciate irony, the marketing wing of the American meat and poultry industry proudly parades the gross numbers (as it were). In 2013, with relentless, riparian efficiency, we slaughtered 32 million beef cattle, 113 million hogs, 250 million turkeys, and – astonishingly – 8.6 billion chickens.

Also without irony, American meat industry extols the low cost of food consumption in the United States – with 6.4 percent of disposable income in the U.S. spent on food compared to 10 percent in the United Kingdom, 24 percent in Mexico, and 48 percent in India. What the meat industry fails to mention is the degree to which this artificially low (and unevenly applied) cost of food masks significant and broadly ranging external costs – to the environment, to public health, to education, to labor markets, and to poverty – that endanger our national future far more than would an honest cost accounting of our food economy.

As the most prominent intermediary between food producers and food consumers, McDonald’s benefits inordinately by keeping this chili con carnage on the down low. Wal-Mart is probably equal to McDonald’s as a consumer-facing purveyor of meat. However, given its strangely codependent relationship with meat producers and “finishers” such as Cargill and Tyson, McDonald’s remains culturally unique as the happy face of an almost unfathomably brutal and destructive industry.

Agricultural Subsidies and the True Cost of Food

Government agricultural subsidies conceal the economic costs and environmental impact of our patriotic allegiance to cheap meat, including those externalities associated with water profligacy in a time of drought. Beyond the obvious environmental impacts, market distortions resulting from these subsidies – most of which ultimately support crop production for animal feed – include monoculture, industrial farming, immiseration of peasant farmers in developing countries, subsistence wages for American workers, and the nutrition and health consequences of artificially low prices for energy-dense (high-calorie) food. Estimated costs of these distortions exceed $400 billion annually. Someone, somewhere, at some time, must bear these costs. Companies with the most leverage in the food supply chain will benefit enormously to the degree they can pretend these costs don’t exist, or otherwise sidestep any responsibility for them. Consumers, probably not so much.

There are many reasons why meat industry practices and impacts remain opaque, but certainly the most important explanation derives from effacement and misdirection strategies so ably deployed by the meat industry itself. “A lot of people like bacon and hamburgers and turkey,”wryly observes the communications director at Cargill. “But the reality is that in order to get that product, we have to harvest animals and disassemble them. And people don’t necessarily want to know all the details about how that’s done.”

It’s difficult to imagine a more disingenuous deflection of responsibility. Without a doubt, many people do want to know the harvest and disassembly details, and the public generally should know these details. But in the past century, slaughterhouses have moved from the city to the hinterlands, consolidated into a handful of supersized industrial agriculture enterprises, and looped their harvest and disassembly operations with security perimeters that would do justice to a supermax prison or nuclear power plant. Tailored food libel and ag-gag laws in meat-producing states threaten journalists, filmmakers, or activists who tries to unveil the meat industry’s dark heart, inadvertent disclosure of the profoundly insecure and defensive mentality that pervades this industry.

As slaughterhouses moved into the hinterlands, food consumers moved into urban centers cordoned off from the “countryside” and from anything remotely resembling contact with fresh – as in living – vegatables and animals. Disappearance of the local butcher and, most recently, of custom cuts of meat at the local grocery store creates another curtain of separation from the killing floor. Because most consumers don’t engage the source of their food in the barnyard, or even the roadside farmstand, their only opportunity to meet their meat is at venues such as McDonald’s and Wal-Mart where staging, presentation, and message reshape the environmental and ecological realities of their subsistence. By insistently (to almost a crazed degree) promoting a causal, biochemically engineered connection between fast food and happiness, McDonald’s has functioned ably for decades as a fig leaf for the depredations of the industrial meat economy.

Because it purchases 2 percent of the world’s beef, McDonald’s also controls most pricing levers in the global market for beef. Its business model demands enormous sales volumes, low employee wages, low consumer prices, and bulk supply contracts that confer arm-wrestling advantage in negotiations with food producers. Theoretically, agricultural producers within the beef supply chain should apply the full force of their own not inconsiderable financial and market power to push back on contracts that squeeze their margins. In other words, we consumers should pay more than we do for beef and other animal staples. Food producers instead work in alignment with McDonald’s and other multinational food retailers to pressure federal, state, and local governments to maintain (or increase) direct cash subsidies to agricultural producers and indirect subsidies for production factors such as water and fuel.

The New Deal policy foundations of agricultural subsidies were largely intended to protect small farmers from market vicissitudes. Current recipient of these subsidies – now mostly consolidated, vertically integrated food companies such as Tyson, Cargill, Monsanto, and Archer Daniels Midland – still benefit politically from the agrarian nostalgia that associates the family farm with national virtue. However, the primary beneficiaries of these subsidies have long been American food consumers. While one might inherently support the idea that inexpensive food is a social good, we run into problems when we assume the price of food also transparently reflects its costs.

Elon Musk has argued we need to fully factor the cost of fossil fuels into the actual price we pay for gasoline and electricity. For similar reasons, we need to surface and acknowledge in food pricing the external costs of beef production and water consumption patterns. Inexpensive food is not equivalent to good or nutritious or sustainable food. Policies and prices that reflect the true cost of our food will result in higher quality diets, less food waste, and more profound environmental awareness.

The True Costs of Food Include Water Weight

Let’s consider water as an example of an external social cost for which we do not sufficiently account. No animal on the farm trundles to market without consumingenormous amounts of water, generally in the form of irrigated crops that serve as feed stock for the animals. But it’s fair to say that by any measure of water wantonness, the mighty beef cow stands alone. We use approximately 1,850 gallons of water to produce one pound of boneless beef. Talk about water weight!

Given the stakes (as it were), various food and environmental interests have battled heatedly to scale this number up or down. But this debate entirely misses the point, because even if one accepts the lowest meat industry estimates for livestock hydration requirements (in this case about 440 gallons of water for every pound of boneless beef), water consumption associated with the beef portion of our food chain is a bit like astronomy data – the numbers are all so far beyond human scale that we can only with difficulty appreciate what they mean.

In 2013, American meat companies packaged 25.5 billion pounds of beef. At 1,850 gallons per pound, the water volume supporting this production level totals out to more than 47 trillion gallons of water. Given what we know about water usage aggregates in the United States, the actual number may well be smaller, but probably not enormously smaller. In the context of climate change and drought, I’ll stress again that the water usage exponent is the concern, not the actual number, and so we need to grasp the meaning of animal husbandry water waste conceptually, not mathematically.

How much water is 47 trillion gallons? Well, it represents one-third of all water used annually for any purpose in the United States (as of 2005), and is roughly equivalent to the total amount of water used for crop irrigation purposes in the United States (other water inputs besides irrigation contribute to beef cattle production, so the numbers for beef cattle and crop irrigation are not coterminous). Remarkably, power-plant cooling requirements account for nearly half of all water use in the United States, and combined with irrigation accounts for 80 percent of all water use.

One could cover the entire island of Manhattan to a height of 10,000 feet with 47 trillion gallons of water, blanket the entire state of New York with water to a height of 10 feet, and plunge all of Texas under water to a height of 2 feet. One also could build a 50-foot thick wall soaring one-mile high around the entire 10,900-mile circumference of the continental United States. In one-gallon containers stretched end to end, 47 trillion gallons of water would extend nearly 8 billion miles into outer space, well beyond the boundaries of the solar system and nearing the distance traveled by the lonely Voyager I space explorer.

You get the idea. We use an unfathomably, unsustainably, unconscionably, and indefensibly immense amount of water each year in the service of large-animal food production.

McMarkets and the Future of the Meat Economy

By itself, the market delivers only limited and inadequate incentives for McDonald’s to address long-term social consequences of a plundered water supply (and other external impacts of the subsidized beef consumption economy). No doubt, McDonald’s executives would prefer to raise and harvest beef without sacrificing water resources. But personal preferences, while perhaps the basis for absolution from our corporate sins, otherwise don’t really matter. Because McDonald’s is existentially committed to concealing the economic and environmental costs of unsustainable water use. By existential, I mean that its business model depends upon, and cannot survive without, abundant supplies of cheap raw materials, inexpensive labor, and low food prices. Absent the commitment to low factor costs that the scale of its enterprise is specifically designed to exploit, McDonald’s would go out of business.

Some, no doubt, will argue that the market has sent sufficiently clear signals about risks associated with McDonald’s environmental, food safety, and labor practices. McDonald’s executives would certainly claim they have responded appropriately to these market signals, and point for evidence to the company’s widely publicized environmental sustainability initiatives and commitment to sourcing only “verified sustainable beef” by 2016.

Please don’t hold your breath. The Principles & Criteria of the Global Roundtable for Sustainable Beef (founding members include McDonald’s, Walmart, Cargill, JBS , and the World Wildlife Federation) is rife with platitudes about prioritizing the planet, people, and progress; lacks conviction and remains uncomfortably “aspirational”; and is stuffed with filler, perhaps especially with regard to the criteria governing water resources. Extensive comments from interested “stakeholders” – particularly those concerned with ensuring the ultimate priority of profit over planet, people, and progress – also indicate the degree to which this effort is probably doomed to the worst kind of quiet death, one in which all parties are secretly relieved to allow the roundtable to give up the ghost.

But truly the nutritional emptiness of these documents is epiphenomenal. McDonald’s obviously recognizes the the generational and global dynamics at play in the evolution of its markets, and is in response energetically attacking the food sustainability issues on as many fronts as possible. However, larger growth and profit imperatives dictate that McDonald’s will be constitutionally unable to grasp the looming enormity of the global environmental challenge. While a tsunami races toward landfall, the company’s response does not extend beyond study groups on more advanced umbrella manufacturing techniques.

This is the problem McDonald’s and its investors face. Time and money spent on promoting more sustainable land or use more nutritional feed won’t diminish the full force of the tsunami. Nor will forswearing gestation crates, growth-inducing antibiotics or beef raised on deforested land. To exercise environmental, public health, and labor market leadership that would realistically account for the full cost of the meat economy, McDonald’s would have to dismantle the entire beef supply chain, and so dismantle itself.

Palliatives won’t work because the issues extend well beyond the care and feeding of the beef cattle. Let’s just focus for the moment on water resource challenges.

  • Industrial animal farming systems – with their dependence on concentrated, processed feed grains sustained by groundwater irrigation – are incompatible with sustainable global water resource management.
  • Grass-fed beef alternatives – that require access to exponentially more cattle pastureland and significantly longer cattle growth cycles – are incompatible with sustainable global water resource management.
  • Emerginh middle and professional classes on every continent – those with disposable income and urban addresses and a rapidly growing appetite for meat – are incompatible with sustainable global water resource management.
  • Competing global claims on reliable water supplies – from feed grain and meat producers, power plants, factories, mines, schools, hospitals, and homes – are incompatible with sustainable global water resource management.
  • Corporate entitlements – in which an immensely large employer such as Archer Daniels Midland can cajole city governments for privileged access to water during droughts or for more aggressive exploitation of groundwater, and then relocate its corporate headquarters anyway – are incompatible with sustainable global water resource management.
  • Consumer entitlements – to low-quality, inexpensive food, irrespective of social costs – are incompatible with sustainable global water resource management.
  • Finally, agricultural, water, and energy subsidies – that radically tilt markets in favor of economically powerful and politically connected corporations and trade associations – are incompatible with sustainable global water resource management.

McDonald’s therefore finds itself in a terrible conundrum, one that the market on its own cannot resolve so long as large corporations that view themselves as too big to fail can extract concessions from governments that bury unpleasant consequences for future generations to manage. McDonald’s can pursue palliative measures that preserve low factor costs and low prices for its signature food products, but leave the company helpless to combat the destructive impact of global warming. Or McDonald’s can honestly and courageously take a stand against the underlying causes of global warming where the company can make a difference – and almost surely go out of business.

There is a third way. Which appreciates, from a food security perspective, that consolidated industrial agriculture needs to function, and be managed, as a utility. And which accepts – even embraces – the need to honestly price – and tax – the full costs of all food production methods. Given the methane output of beef cattle, this might well include a greenhouse gas tax on methane emissions. But in reality, the only option available to us is to eat less beef, and less meat. Much less.

Given the social impact of drought, and in the absence of vigorous government action to address the environmental and economic impact of industrial agriculture subsidies, we are therefore likely, more rapidly than any of us may imagine, to experience a sharp degradation in basic public services that supply water, electricity, health care, and education. For this loss, burger tailgates and Big Mac road trips will provide our only solace. Until McDonald’s also no longer exists.