Explaining America’s Obesity Epidemic

An economic perspective on the problem affecting millions of individuals

At the time of this article’s revision, a standard box of Kellogg’s Pop Tarts [8 strawberry-flavored pastries x 52 grams each = 416 grams net weight] costs more or less the same as a pound of tomatoes [1 pound ~4 tomatoes ~453 grams net weight].

Dollar-for-gram, there doesn’t seem to be much difference: assuming that the Pop Tarts and the pound of tomatoes each cost $2.00 [*1], a dollar worth of tomatoes weighs about 9% more than a dollar worth of pastries.

In simpler terms, with one dollar, you can buy slightly more tomatoes than you can buy Pop Tarts. Using this back-of-the-napkin calculation, it seems as though tomatoes have a slight edge over the alternative.

But that’s not the best way to compare the two. After all, prices in the real world are hardly decided based on weight. Perceived utility (or lack thereof) is in fact superior to weight when determining the price of a good or service. For example, you’d expect an ounce of gold to cost significantly more than an ounce of cookies — at least in today’s economy.

Thankfully, we have one way of measuring food’s utility [*2]: the (dreaded) calorie (kcal).

Calculating dollar-for-calorie paints a different picture: a dollar worth of Pop Tarts yields 840 kcals. A dollar worth of tomatoes yields roughly 41 kcals. That’s a 21x difference. Let that sink in for a moment.

March 2014. New York City. My local supermarket.

But why? Accounting for the 21x dollar-for-calorie difference

There are many reasons why. Chief among them is that tomato plants (and most vegetable plants) are simply not as photosynthetic efficient as “staple crops.” They require more energy to convert CO2 and water to O2 and sugar, making them less calorie dense.

But surely photosynthetic efficiency doesn’t account for the whole discrepancy. The question is yet more perplexing when you consider all the stuff that Kellogg’s has to do in order to deliver their product. Factored into the price of the Pop Tarts is the cost of raw material (37 ingredients to my count), processing, labor, utilities, factory operations and maintenance, and packaging and transportation.

Exploring government intervention in the agriculture industry

If you look at the top 6 ingredients that constitute a Pop Tart, 4 of them are heavily subsidized by the U.S. government: wheat, corn, soybeans, and corn (corn is in the list twice under two different names). In 2010, the U.S. government awarded $6.8 billion in subsidies to growers of these 3 crops alone.

In almost all cases, subsidies make things artificially cheaper. But they also have another profound effect on the behaviors of farmers. Subsidies increase supply — and that’s exactly the case here: subsidies have existed in U.S. agri-policy for decades, and in 2004, these 3 crops alone dominated 82% of total U.S. planted crop area.

The first of these subsidies were introduced during the Great Depression, when the Agricultural Adjustment Act was signed by President F. D. Roosevelt. Since then, however, a comprehensive farm bill has been signed roughly every 5 years (the latest in 2014), and subsidies have been awarded regardless of boom or bust. Today, not only is the size of these subsidies egregious, but so is the obscure methods of distribution. It’s no surprise that the agri-industry spends tens of millions of dollars a year on lobbying.

So why is any of this relevant to the obesity epidemic?

Obesity is not necessarily a disease of the weak-minded, the glutton and the sloth; the environments in which we live can be as equally defining of our health as our innate human qualities. Manipulating the environment to drive sales is no capitalist breakthrough — think big billboards or TV ads, and eye-level product placement in supermarkets. In truth, there exist far more powerful techniques to influence behavior, such as odor engineering in or around food outlets to entice pedestrians.

But perhaps the single most-important determinant of our purchasing habits in today’s society is price. Subsidized crops are so artificially cheap that it makes financial sense for food manufacturers and chain outlets to process and squeeze them into as many products as they can, all while increasing profit margins and decreasing the final price of the product.

To illustrate, let’s take a look at your typical Standard American Diet meal — a burger, with a side of fries and a soda: the three aforementioned crops — wheat, corn, and soy — or a combination thereof, can be found in everything from the bun, to the oil used to cook your fries, to the high-fructose corn syrup that goes in your soda and makes its way into your ketchup, and even the fodder that is fed to the livestock (livestock and dairy programs also receive subsidies).

Simply put, the same meal would cost significantly more in a parallel universe where America does not excessively subsidize its crops.

And now we begin to understand why cheap food is so cheap. From 1985 to 2000, the prices of soda have fallen nearly 24%, while the prices of fruit and vegetables have risen nearly 39%, adjusted for inflation.

But we also begin to understand why food portions have gotten larger over time:

In 1972 McDonald’s introduced large fries. Going large was seen as good value for consumers (it did , after all, cost less than buying two portions) yet the cost to the company for the extra food was minimal, considerably less than it would charge the customer. Profits soared and, naturally, other fast-food outlets soon followed.

If these agri-policies remain as they are, America’s fight to keep its citizens healthy is taking place on a battlefield tilted against it.

So what’s the solution? Do subsidies need reform, or should they be abandoned all together? What about incentives for local vegetable and fruit farmers? Well, the short answer is I don’t know. But the evidence is clear: reform is necessary.

The first farm bill was designed to provide assistance to farmers who had over-borrowed and over-farmed to meet increasing demand during the Great War, and were harshly met with less demand when the war ended. Back then, nearly 25% of the US labor force was employed in farming; today, that number is around 2%. It’s evident that the problem that faced us a century ago is not the same problem that faces us today.

“The current structure of food politics allows high-sugar and high-fat foods to provide calories at the lowest cost.”

As of 2010, the U.S. food system supplies 24% fewer servings per person than the five daily vegetable servings recommended (based on a 2,000 kcal diet). Meaning that if every American or permanent U.S. resident decided to eat as many vegetables as the USDA recommends, there would immediately be a massive shortage. Again, let that sink in for a moment.

In general, the U.S. does not offer farmers any incentives to grow fruits, vegetables, or other “specialty crops.” Yet these are the crops that provide the most nutritional value per calorie consumed; these are the crops necessary to help fight obesity, and related non-communicable diseases.

Tackling the policies that dictate which foods are produced and at what quantities will be the most efficient method to address obesity, and the hidden costs it implies on healthcare, productivity, and social well-being.

Good reform would distribute insurance and subsidies (if any) more equitably. Reform should allow for prices of healthy fruits and vegetables to compete with alternatives. Good health should not be a luxury.

[*1] Setting aside seasonal ebbs and flows in price, geographical discrepancies, and tomato varieties.

[*2] Food can provide us utility in many ways (e.g. social, cultural); however, nutrition is food’s primary utility, and the calorie is nutrition’s primary measure.

This article was revised on June 22nd, 2016.