The Locavore's Dilemma (13 page)

Similar developments occurred all over North America and Western Europe. Regional specialization in perishable products mirrored what had happened earlier with grain markets. As observed in 1838 by George Richardson Porter, the head of the Statistical Department of the British Board of Trade, new forms of transportation were “stimulating production and equalizing prices” of perishable items:

The statistician then observed, “a like result has followed the introduction of this great improvement [in transportation] in regard to the supply and cost of various other articles of produce.”
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True, because of “external” demand local farmers could now extract a higher price from local customers than had previously been the case at harvest time. On the other hand, consumers whose access to fresh produce had been limited to a few weeks each year could now purchase these commodities over much longer periods of time at ever more affordable prices. Now, commodities identical to those produced locally were not only being produced on a large scale elsewhere, but they reached maturity at a different time of the year.

To give a striking illustration of these processes, in American cities at the turn of the 20th century, the earliest supplies of new potatoes to hit the market before Christmas came from both southern Florida and the islands of Bermuda, which, although at a more northerly latitude, benefited from the moderating influence of the Gulf Stream. Potatoes produced from further north in Florida all the way up to the northern potato belt that stretched from Maine to Minnesota would then reach maturity between March and early September. (See map on next page.)

Of course, what was true for American potatoes was also true for countless other crops. For instance, in 1880 in England, the city of Manchester's supply of green peas first came from Algeria, then from Spain and later on France. These were followed in time by English-grown
green peas, first from southern regions and then all the way up to the Scottish border. The local onion market was supplied, depending on the variety, by Bedforshire in southeast England (from August to May), Holland (between July and April), Germany (September to June), Belgium (August and September), Bordeaux, France, (from October to January), and Portugal (May to July).
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In time, seasonal products also came to be shipped in from the southern hemisphere where seasons are inverted (meaning that summer months in countries like Argentina, Australia, and New Zealand coincide with the winter months in the United States, the United Kingdom, and Germany). This pattern also historically applied to nonedible agricultural commodities such as cattle hides that were of higher quality in summer months in both the northern and southern hemispheres.
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Shipping fresh produce grown in certain latitudes to distant consumers located in other latitudes provided not only superior alternatives to local produce when not in season, but also drastically reduced the energy costs and waste due to spoilage inherent to long-term storage.

 

Source:
V. C Finch and O. E. Baker. 1917.
Geography of the World's Agriculture.
US Government Printing Office, page 66.

Unfortunately, local food activists and agri-intellectuals seem to be unaware of the economic rationale underlying the export of most of a region's perishable products at harvest time and of importing similar products from growing areas located in different latitudes the rest of the year. A case in point is the food commentator Barry Estabrook, who, upon learning that 99% of produce grown in Santa Barbara County is exported while more than 95% of the produce eaten there is imported, coined the expression “Santa Barbara Syndrome” to express how “completely dysfunctional our modern food system” has become.
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The data mentioned by Estabrook had been compiled by David Cleveland, a University of California at Santa Barbara professor of environmental studies,
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who, during a talk in which he presented his results, reportedly stressed the absurdity of “two produce-laden tractor-trailers passing on the highway, one bringing food into the county; the other hauling it out.” Two crucial facts not mentioned by Estabrook, however, are that according to Cleveland's data, Santa Barbara County produces roughly nine times the amount of produce it consumes each year and that much of its imports come from countries located in the southern hemisphere, such as Chile, Argentina, and New Zealand.

Based on historical precedents, one can logically infer a few unavoidable outcomes of an all-out adoption of locavorism in Santa Barbara County. First, faced with the loss of their export markets, local farmers would have no other choice but to sell all their production locally at harvest time. This deluge of produce would quickly bring their price below production costs. While this situation may prove a boon to customers the first time around, most producers would soon either go bankrupt, drastically decrease the acreage devoted to produce in favor of other crops less suited to the local soil and climate, or get out of the agriculture business altogether. In the process, workers with unique
expertise in the growing, harvesting, preparation, marketing, and shipping of produce would be laid off and in most cases be unable to earn as much income as they had before (otherwise they would not have been in this line of work in the first place). Local businesses that catered to these workers would suffer as a result. Some volume of local produce would then have to be preserved in one form or another in order to be consumed out of season. Whatever the preservation option selected, out-of-season local produce would be of lesser quality and more expensive than formerly imported fresh produce. In bad years—after all, even Santa Barbara County is not immune to pests, floods, and earthquakes—local residents might have to get by with very little, if any, produce. Seen in this light, the “Santa Barbara syndrome” strikes us as a blessing rather than a proof of economic derangement.

So far we have discussed the advantages of long-distance trade for agricultural producers and final consumers, but its importance for food processors and manufacturers should not be overlooked. The issue here is economies of scale in production—meaning, the more units of a good that are produced, the lower the cost per unit. Economies of scale can be achieved either by increasing the size of operations in a firm or by one firm working with another, typically located nearby. Perhaps the best historical case to illustrate the economic benefits of both types of economies of scale is the Chicago meat-packing district in the second half of the 19th century, a subject to which we will now devote a few lines.
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Although self-styled reformers maligned the meat packers for their alleged sins of collusion and greed—long before Upton Sinclair's 1906 novel
The Jungle
indicted them for alleged unsanitary practices
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—a case can be made that the real source of the industry's success and its true economic impact has been mischaracterized by contemporary critics who were essentially local food activists. The main argument on behalf
of the packers, as stated in 1908 by the pastor George Powell Perry, was that it was a common mistake “to attribute the financial success of some of these moneyed corporations to cheat and chicanery in business methods” for “to say that all this phenomenal accumulation of wealth has resulted from shrewd trickery that enabled a few to cheat their fellows of their dues is a false representation of the true workings of a system of savings that has done as much as anything else to make possible the extraordinary prosperity of our nation during the past century.” In his opinion, the fundamental truth of the matter was that “men of great business capacity and of untiring energy have been gathering up the fragments that nothing might go to waste.”
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American meatpacking first became big business in the early decades of the 19th century with the large-scale butchering of hogs, whose meat could be packed in barrels of brine and shipped over long distances. This process, however, proved unsatisfactory in the case of beef, whose meat became hard and tasteless when prepared that way. As a result, until the second half of the 19th century, most cattle destined for meat consumption were grazed in relatively close proximity to their final destination in order to minimize loss attributable to injury and shrinkage as they were walked to their deaths.
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Animals were then typically killed in relatively small-scale operations from which the meat was quickly sold to local consumers to avoid spoilage.

In time, the advent of a national railway network made possible the movement of cattle in railroad cars while the development of refrigeration led to the provision of “dressed meat” across the United States. At the forefront of the movement of cattle and meat on rails were the Chicago meat-packing industrialists whose strength lay not only in their ability to cut down costs by integrating forward in marketing, backward in purchasing, and by obtaining their own materials directly,
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but also in their capacity to turn what was once the waste of their “disassembly” activities into valuable commodities. In other words, far from encouraging them to throw their polluting production residuals back into the environment (in modern economic parlance, to “externalize” their
pollution costs), the packers had every incentive to create wealth out of waste. After all, they had paid for whole animals, so why would they have thrown out “free” raw materials from which they could devise some innovative ways to earn extra money?

Writing in 1889, the economist David Ames Wells attributed the success of meat-packing districts to economies of scale, “which are not possible when this industry is carried on, as usual, upon a very small scale.” Crucially, the scaling up of operations had made it possible to turn animal parts such as hide, hoofs, horns, bones, blood, and hair, which in the hands of small butchers were “of little value or a dead loss,” into a range of profitable products that spanned the manufacturing spectrum, from glue and bone-dust to fertilizers.
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In the early days of the Chicago packing district, large refineries took the steam-rendered lard of packers, refined and bleached it, and sold it on the open market. Glue works made glue from bones, sinews, and various other residuals. Fertilizer plants carted off the pressed tankage and raw or pressed blood, dried and sold it as such, or manufactured mixed fertilizer. Soap factories bought various grades of tallow. Butterine manufacturers used neutral lard and oleo oil from packing plants for manufacturing oleomargarine. Other nonedible portions were turned into pharmaceutical products and lubrication oil.
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A few decades later, many of these operations had been integrated within larger firms. While meat-packing districts were noisy, smelly, and polluted, slaughtering animals in large agglomerations of firms of all sizes resulted in much less waste material being released in the environment than would have been the case in more numerous, isolated, smaller, and less efficient operations.

Most citizens benefited from these developments. Because they were able to create more wealth out of every single animal, the Chicago packers were able to outbid their less efficient competitors and to pay a higher price for cattle, something that was obviously welcomed by producers in this industry. Higher purchase prices, however, did not ultimately mean higher selling prices to final consumer, because, through their more efficient and creative use of raw materials, Chicago packers were able to sell their meat cheaper and still make a profit. Not surprisingly, a growing number of American meat consumers switched their meat purchases from local offerings to those delivered by rail from the Windy City.

 

Source:
Rudolf A. Clemen. 1927.
By-Products in the Packing Industry
. University of Chicago Press (insert, no pagination)