There are people who are worried enough factory farms to boycott animal products. There are people who are worried enough about factory farms to buy humane products. And there are people who are worried enough about factory farms to pick up a humane product at the grocery store, see the price, and set it back.
A lot of the cost of chicken comes from the feed the chickens eat, but humanely raised chickens require more human labor. If the United States imported chicken from producers in poorer countries with lower wages, how much cheaper could humane chicken be? Where could we source it from?
Trade issues
Over 99% of the chickens eaten in America are American chickens. For poultry as a whole, America only imports around $30 million worth of poultry per month. Foreign importers have to make it through several regulatory barriers before import is allowed. First, the USDA has to agree that the foreign country has a poultry inspection system that’s as good as America’s and individual establishments have to be approved by the Food Safety and Inspection Service.
I think the most promising foreign suppliers of humane chicken for the U.S. would be Mexico (Sinaloa/Sonora) and Chile. Both are geographically near the U.S., have cheaper labor than the U.S., and both can export unlimited amounts of chicken, tariff free. (Mexico because of the USMCA agreement and Chile because of the U.S-Chile FTA). Mexican wages are somewhat lower than those in Chile and it’s closer. How cheap could Mexican humane chickens be relative to American ones?
How cheap could it be?
The biggest expense in raising chickens is feeding them. Chicken feed is a global commodity so it doesn’t get cheaper when you operate in Mexico. So cost savings for humane chicken are going to have to come from humane chicken requiring larger labor inputs and labor being cheaper, with perhaps some additional savings coming from lower land prices.
How much of the cost of humane chicken comes from labor?
Treats “slaughter charge” separately; if processing wages are also lower in Mexico, effective labor share could be meaningfully higher.
Mexican agricultural workers make a lot less than American agricultural workers. Different estimates put the average wage at $1.60 in Mexico (poultry breeding sector) or $2.95 (general poultry sector) compared to the average U.S. farm wage of $17.55. Using the higher wage estimate for Mexico still implies wage savings of 83%, which given a labor share of 22%, would save roughly 18%.
Humane chicken from Mexico could be meaningfully cheaper than American chicken but not transformative, and still more expensive than conventional American chicken. If the elasticity of humane poultry is the same as poultry overall, it’s about 0.68 according to this review, you would increase humane chicken consumption by about 12%.
Presumably few vegans would suddenly start eating meat because humane chickens got cheaper, but you might increase chicken consumption among reducetarians who can now afford more of it. So not all of the increase in humane chicken consumption will come from replacing conventional chicken.
Vukina and Oh (2018) put the “cross-price elasticity of conventional chicken meat demand with respect to organic chicken price” at 15.3% so assuming similar substitutions between humane and conventional, you would cut conventional chicken consumed by 2.75%. With 9.5 billion chickens farmed and consumed in the U.S. every year (almost all conventional), that implies the creation of a humane Mexican poultry sector that delivered cost savings of 18% would transfer 260 million chickens from conventional to humane farms every year.
If a philanthropist wants to get involved here is where I suggest they do so- pledge to cover the initial inspection and certification costs of humane poultry farms abroad and get Humane Farm Animal Care or the Global Animal Partnership on board with foreign certification.
Become a chicken mogul?
If you want to help chickens there are of course lots of options. You could try to improve animal welfare laws, develop alternatives to chicken meat (cultured meat or better fake meat), or try to get people to boycott unethically raised chickens. Those might be more effective?
But the attraction of this idea is that you could conceivably make money while helping out hundreds of millions of chickens. Philanthropic seed funding would be helpful– but this idea should work as a normal profit-seeking enterprise. I don’t have Mexican citizenship and I don’t speak Spanish, but I hope someone who’s better positioned than I am, considers this seriously.
Why Not Import Humane Meat from Mexico?
cross-posted from my blog
There are people who are worried enough factory farms to boycott animal products. There are people who are worried enough about factory farms to buy humane products. And there are people who are worried enough about factory farms to pick up a humane product at the grocery store, see the price, and set it back.
A lot of the cost of chicken comes from the feed the chickens eat, but humanely raised chickens require more human labor. If the United States imported chicken from producers in poorer countries with lower wages, how much cheaper could humane chicken be? Where could we source it from?
Trade issues
Over 99% of the chickens eaten in America are American chickens. For poultry as a whole, America only imports around $30 million worth of poultry per month. Foreign importers have to make it through several regulatory barriers before import is allowed. First, the USDA has to agree that the foreign country has a poultry inspection system that’s as good as America’s and individual establishments have to be approved by the Food Safety and Inspection Service.
Exports to the United States can also be restricted to control the spread of disease. Mexican poultry raised and processed in Sinaloa or Sonora can be exported to the U.S raw., but exports from elsewhere within Mexico are restricted due to the presence of Newcastle disease. Cooked products are treated more leniently.
I think the most promising foreign suppliers of humane chicken for the U.S. would be Mexico (Sinaloa/Sonora) and Chile. Both are geographically near the U.S., have cheaper labor than the U.S., and both can export unlimited amounts of chicken, tariff free. (Mexico because of the USMCA agreement and Chile because of the U.S-Chile FTA). Mexican wages are somewhat lower than those in Chile and it’s closer. How cheap could Mexican humane chickens be relative to American ones?
How cheap could it be?
The biggest expense in raising chickens is feeding them. Chicken feed is a global commodity so it doesn’t get cheaper when you operate in Mexico. So cost savings for humane chicken are going to have to come from humane chicken requiring larger labor inputs and labor being cheaper, with perhaps some additional savings coming from lower land prices.
How much of the cost of humane chicken comes from labor?
Mexican agricultural workers make a lot less than American agricultural workers. Different estimates put the average wage at $1.60 in Mexico (poultry breeding sector) or $2.95 (general poultry sector) compared to the average U.S. farm wage of $17.55. Using the higher wage estimate for Mexico still implies wage savings of 83%, which given a labor share of 22%, would save roughly 18%.
Humane chicken from Mexico could be meaningfully cheaper than American chicken but not transformative, and still more expensive than conventional American chicken. If the elasticity of humane poultry is the same as poultry overall, it’s about 0.68 according to this review, you would increase humane chicken consumption by about 12%.
Presumably few vegans would suddenly start eating meat because humane chickens got cheaper, but you might increase chicken consumption among reducetarians who can now afford more of it. So not all of the increase in humane chicken consumption will come from replacing conventional chicken.
Vukina and Oh (2018) put the “cross-price elasticity of conventional chicken meat demand with respect to organic chicken price” at 15.3% so assuming similar substitutions between humane and conventional, you would cut conventional chicken consumed by 2.75%. With 9.5 billion chickens farmed and consumed in the U.S. every year (almost all conventional), that implies the creation of a humane Mexican poultry sector that delivered cost savings of 18% would transfer 260 million chickens from conventional to humane farms every year.
Certification options
Would American consumers believe that foreign-raised chicken was humanely raised? I think so, especially if they were certified by the mainstream humane meat certifiers that already operate within the United States such as Certified Humane by Humane Farm Animal Care or G.A.P. certified by Global Animal Partnership.
If a philanthropist wants to get involved here is where I suggest they do so- pledge to cover the initial inspection and certification costs of humane poultry farms abroad and get Humane Farm Animal Care or the Global Animal Partnership on board with foreign certification.
Become a chicken mogul?
If you want to help chickens there are of course lots of options. You could try to improve animal welfare laws, develop alternatives to chicken meat (cultured meat or better fake meat), or try to get people to boycott unethically raised chickens. Those might be more effective?
But the attraction of this idea is that you could conceivably make money while helping out hundreds of millions of chickens. Philanthropic seed funding would be helpful– but this idea should work as a normal profit-seeking enterprise. I don’t have Mexican citizenship and I don’t speak Spanish, but I hope someone who’s better positioned than I am, considers this seriously.