Sunday, December 7, 2008

Why do veggies cost more than meat?

I once had a long argument with all of the employees of a Quizno's Sub shop when I learned that I was being charged $0.50 more for my veggie sandwich than if I had ordered a deli meat sandwich. The argument ended amicably, though I still had doubts about their answers.

At first thought, veggies should be cheaper than meat. It takes more time and money to raise animals, plus they need a lot of feed anyway. Even if the feed is of lower quality than what humans eat, the price of meat should be one or two orders of magnitude higher.

Once I got my economist brain working on the issue, there are a lot of reasons to believe vegetables could be more expensive. Here is an incomplete list, I am sure:

  1. As I have noted before, meat in the US is highly subsidized. So are vegetables, but perhaps meat just gets more money?
  2. Quality matters a lot. Meat is often of pretty poor quality (think McDonalds), and people seem fine with that. Low quality vegetables turns everyone off.
  3. Meat can be stored for longer periods of time, making it easier to ship and optimize distribution.
  4. Both 2 and 3 lead to the additional issue that vegetables are often taken locally, which, I have previously mentioned, can actually be very inefficient.
  5. There is no reason supply and demand should meet at the same price for veggies as they do for meat. Basic market principals could be driving prices higher.
  6. Vegetarians have very few choices for food, and so are are inelastic to price changes. Businesses can charge more, and there's little we can do.
Any of these reasons being true would probably be enough to get prices a bit higher, as we see in restaurants and grocery stores.

5 comments:

Aggie said...

Re # 1: veggies are more-or-less unsubsidized, while both livestock feed (e.g. corn) and livestock itself are highly subsidized. I suspect that this accounts for the bulk of the difference.

Allan Roth said...

I take some issue with #4 and #6. Local vegetables are about quality often rather than efficiency. A tomato that is bred to ship from California does not have the same properties as one bred for flavor locally and not to withstand shipping. So they might be more expensive because of the demand for a tasty tomato, not because of the inefficiency of local vegetable/fruit production. Anyway, apples and apples is sometimes like apples and oranges.

As for #6 if you cook, vegetarians have many, many more options. This would appear to be a discussion of restaurant prices masquerading as prices in general.

Bill Harshaw said...

As Allan says, you're comparing fresh vegetables. Think about the price for potatoes, dried edible beans, canned or frozen vegetables.

Barbara said...

On #2: I'm not sure, if people are fine with lower quality meat, but I think it's harder to tell just from looking at it (unless it's that low quality that it's already rotten).
On the other hand, you can usually spot very easily if vegetables are rotten.

For example, in Germany, you pay often much less if you buy pre-packed vegetables, where you can't see if it's good quality.

Logan said...

I've always wondered the same thing. My logic as to why meat should be more expensive follows a natural rule. Generally, 10% of the energy from food is passed on as energy climbs the food chain. Hence, a cow eating corn gets 10% of the corn's energy and the human consuming the cow gets 10% of that energy. Meaning that 1% of the corns energy was transfered.

So yea, really large gap in logic there.