The Next Food Crisis Has Already Started | Joel Salatin

Key Concepts

Food System Health: The importance of direct participation and connection to the food system for overall health.
Tariffs and Food Prices: The impact of tariffs on specific food items like coffee and beef, leading to significant price increases.
Beef Supply Chain: Factors affecting beef inventory, including drought, long production cycles, and farmer demographics.
Agricultural Input Costs: The rise in costs for fertilizers and pesticides due to geopolitical events and their impact on farmers.
Sustainable Farming Practices: Alternative methods like composting, rotational grazing, and water inventory to mitigate weather anomalies and reduce reliance on chemical inputs.
Market Intervention vs. Free Market: The argument against government subsidies and regulations that distort market signals and prevent natural adjustments.
Value-Added Products: The potential for farmers to increase income by creating processed goods from raw ingredients.
Food Freedom and Market Access: The need to remove regulatory barriers that prevent farmers from selling directly to consumers and developing local markets.
Anti-Industrial Food Trend: A growing consumer mistrust of large-scale industrial food production and a desire for quality and transparency.
Technological Adoption in Farming: The role of AI and automation, contrasted with biological and ecological approaches.
Lab-Grown Meat: Skepticism regarding the scalability, nutritional value, and long-term health effects of artificial meat.
Nature's Scaling Principle: The concept of scaling through duplication rather than consolidation.

Summary

Impact of Tariffs and Inflation on Food Prices

The discussion highlights the significant increase in food prices, particularly for certain items. Data from the BLS CPI breakdown shows year-on-year unadjusted percentage changes. While general food inflation was in the low single digits, specific items experienced substantial hikes:

Beef and Veal: Uncooked beef and veal saw increases of 14.5% and 16.6%, with uncooked beef roasts up by 18%.
Coffee: Roasted coffee prices rose by 18.9%, and instant coffee by 22%.
Produce: Interestingly, produce, including processed fruits, canned fruits, potatoes, lettuce, and tomatoes, showed low single-digit inflation. Fresh fruits, like apples, even saw a slight decrease of 0.2%.

Causes of Price Increases

Joel Salatin attributes the surge in beef prices primarily to a low herd inventory in the US, the lowest since 1950. This is a direct consequence of the drought in 2021 and 2022, which led to herd liquidation due to a lack of feed. The long production cycle for beef (20-30 months) means it takes a considerable time to rebuild herds. An additional factor delaying herd recovery is the aging farmer demographic, with many older farmers unwilling to expand their operations regardless of price. While poultry and beef commodity prices have also increased input costs, the primary driver for beef is identified as weather.

Coffee price increases are largely attributed to tariffs, as nearly all American coffee is imported, making it highly import-dependent.

Tariffs and Import Volume

While tariffs are a major factor, the screworm parasite halted beef imports from Mexico, which is a significant beef exporter to the US. This halt, rather than tariffs, prevented Mexican beef from augmenting the US shortage.

Joel Salatin's Farm and Mitigation Strategies

Salatin's farm has not experienced the same drastic cost increases or price hikes as the broader industry. He attributes this to being immune to many of the factors affecting industrial farms. His farm employs strategies to mitigate weather impacts, such as:

Water Inventory: Building 20 ponds and 12 miles of buried water lines to store water from snowmelt and storms, preventing downstream flooding and providing irrigation during dry periods. This is likened to the water management practices of beavers.
Increasing Organic Matter: Utilizing compost and perennial forages to increase soil organic matter, which can hold four times its weight in water. This contrasts with chemical fertilizers, which reduce organic matter.

Salatin emphasizes that the key is preparing for future anomalies by building water inventory and increasing organic matter.

Global Food Index and Meat Prices

The FAO Food World Food Index, in real inflation-adjusted terms, has remained relatively stable since the early 1960s. However, in nominal terms, it has increased significantly. Meat is identified as the line item with the most substantial growth in this index.

Soybeans, Tariffs, and Government Subsidies

The discussion criticizes government intervention in the agricultural market, particularly the $10 billion bailout for soybean farmers. China, a major buyer of US soybeans (a quarter of the US crop), imposed tariffs, leading to a collapse in soybean prices. Salatin argues that US farmers are overproducing soybeans due to crop subsidies. He contrasts the potential loss of $100 per acre on soybeans with a potential profit of $1,000 per acre from growing grass prairie for beef. He advocates for farmers to convert to grass and grow beef, addressing a shortage, rather than continuing to overproduce soybeans. He believes government subsidies create a "safety net" that prevents farmers from facing the consequences of their overproduction.

Agricultural Input Costs and Sustainable Alternatives

Tariffs on agricultural inputs have jumped from 1% to 12%, leading to an estimated $109 per acre loss for some farmers and a surge in farm bankruptcies. The invasion of Ukraine by Russia, a major supplier of chemical fertilizer, caused a 400% jump in fertilizer prices. Salatin's farm avoids these issues by not purchasing chemicals and instead focusing on large-scale composting and controlled rotational grazing. He proposes a "carbon economy" where chipped wood from forest fires is composted to eliminate the need for chemical fertilizers, making farms self-sufficient through biological solar collectors. He notes that while chipping requires energy, the decrease in energy costs since Trump's presidency has reduced his farm's overall input costs.

Scalability of Sustainable Farming

Salatin acknowledges that his approach is labor-intensive rather than capital-intensive, substituting human expertise for depreciating infrastructure. He points out that tax policy often favors infrastructure and equipment depreciation over hiring labor, creating a bias against his model. Despite this, his farm has only increased beef prices by about 10% in the last two years, significantly less than the industry average.

Government Aid and Market Access

Salatin expresses skepticism about government aid for farmers, arguing that farmers need market access and the removal of regulatory barriers. He highlights the inability to legally sell value-added products like chicken pot pies directly to consumers without extensive and costly compliance. He believes this lack of market access, coupled with government regulations and zoning rules, prevents farmers from tapping into the value-added convenience market, thus reducing farmgate income. He advocates for a "food emancipation proclamation" to allow consenting individuals to engage in food transactions without government permission, which he believes would foster entrepreneurial farmers and dismantle oligarchies.

Oligopolies in the Food Market

The conversation touches upon the concentration of power in the food industry, with four companies controlling 85% of the US beef market. This is seen as a direct consequence of farmers' inability to efficiently bring their products to local markets.

Trade Policy and Market Micromanagement

Salatin views President Trump's attempts to micromanage the market through tariffs and exemptions as problematic, comparing it to the difficulties of communism and socialism. He believes the market should be allowed to self-regulate.

Soybean Farmers and Adaptation

Salatin directly addresses soybean farmers, questioning how many times they will blame external factors before considering alternatives. He suggests that if they are consistently facing losses, they should consider switching to crops like apples or, more significantly, beef, which is in shortage. He believes this shift would naturally adjust market prices for both soybeans and beef.

The MA Movement and Consumer Mistrust

A significant trend identified is the MA (Movement for Agriculture) movement and a growing consumer mistrust of institutions like the FDA, USDA, and Health and Human Services. Discoveries, such as the high number of food additives in the US compared to Europe and the significant portion of SNAP benefits going to sugary drinks, are fueling this shift. This has led to an anti-industrial food trend, with consumers seeking non-chemical, quality food and a greater connection to their food sources.

Food Shortages and Young Farmers

The concern of potential food shortages due to import issues and farmer exits is acknowledged. Salatin emphasizes the need to create pathways for young farmers to enter the industry. He believes that enabling farmers to create value-added products, like turning a $20 chicken into $400 worth of pot pies, can make smaller farms viable and provide employment. He notes that industrial agricultural sectors resist this competition.

Land Ownership and Technology

The increasing ownership of farmland by entities like Bill Gates and investment companies is seen as a concern, driven by the exit of farmers unable to compete in the chemical-industrial climate. Regarding technology, while Salatin's farm uses technology like electric fence energizers and the internet for marketing, he suggests that investing in composting programs is more beneficial than expensive AI sprayers, as biology can address diseases naturally. He contrasts the mechanical view of soil in conventional farming with its biological complexity.

Future of Food Consumption and Production

Salatin predicts continued high beef prices through 2028 due to the long production cycle. Chicken prices could fluctuate based on factors like bird flu. He foresees an expanding trend towards non-chemical food and a shift towards purchasing outside of traditional supermarkets. He notes that the cost of retail interface has increased dramatically, while door-to-door delivery costs have plummeted, making direct-to-consumer models more competitive. He also highlights the impact of national debt on economic pressure, particularly for young people, leading to reduced eating out and increased home cooking.

Lab-Grown Meat Skepticism

Salatin expresses skepticism about lab-grown meat, citing the past failures and billions lost in the "fake meat" industry. He argues that it is difficult to replicate complex biological functions like kidneys and livers at scale, and current efforts are limited to small batches. He believes natural animal systems are more efficient and nutritionally complete. He also raises concerns about the long-term health effects of consuming artificial meats and the potential use of antibiotics in their production due to waste management challenges.

Nature's Scaling Principle

Salatin concludes by explaining that nature scales through duplication, not consolidation. He contrasts this with industrial farming's consolidation. He believes diversified, synergistic farm arrangements that simulate nature through duplication are more efficient and sustainable than large, consolidated industrial farms.

Where to Learn More

Joel Salatin can be found at Polyface Farms (polyfacefarms.com). He also has a blog called "Musings from the Lunatic Farmer" and a podcast called "Beyond Labels with Dr. Cena McCulla." He has authored 17 books, with his latest being "Pitchfork Pulpit."