De-commoditize Your Food

When I was still farming full time, I was struck by a line from Warren Buffet’s biography The Snowball. It read “No one goes to the supermarket to buy Howie Buffett’s corn.” He was explaining why the farm he purchased for his son was a poor investment. I was incensed. Often, when you find yourself having an outsized response it’s rooted in frustration with the truth. You wish it weren’t true, but it is, and you know it. Farming is a struggle, and I was melded into that struggle in a way that precluded me from being objective. Mr. Buffet was correct, and I knew it, but why? Food is a basic human need. That need guarantees consistent demand, so why is it that most farmers struggle to survive? I realized that in our current food system, everything has been commoditized, and in a commodity market the lowest cost producers are the only survivors. Price is the sole determining factor, practices and quality don’t matter. Commoditization works well for the building blocks of civilization like copper and oil. It makes sense for basic food ingredients like grains, but when it consumes the entire system and paints fruits, vegetables, animals, and even meals with the same broad brush of anonymity it creates an unhealthy system.

The acceptance that corn is corn, is corn, is corn, has crept into every part of the food system. Have you noticed that fast food restaurants aren’t even advertising actual food items anymore? It’s evolved, (or devolved depending upon your perspective) to marketing the number of food components for a symmetric price. 4 items for $4 dollar meal, 5 items for $5 dollar meal. It’s the clearest price discovery process in the history of food. 1 unit of food for $1. Eli Whitney’s interchangeable parts have taken over lunch. The “what” we are eating is becoming less and less important, less distinguishable. That is how you buy a commodity, like when you go to the gas station and get $20 worth of gas. Is the day when you can pull into a drive-thru and have them squirt $20 of lunch down your gullet that far away?

The key to understanding our food system and to effecting change is understanding what a commodity is. How did this useful and long used tool grow into an ideology that permeated the entire food system, and how we can de-commoditize our current system? Commoditization is at the root of all the current food and farming arguments. It is the pros and the cons. Revealing this simple truth empowers consumers, and gives them the ability to effect change. Every meal becomes a vote, every purchase a referendum.

So, what is a commodity and why did they come about? A commodity is a raw material or a basic agricultural product, widely available, with a fungibility, uniform across producers and treated by the market as equivalent without regard to the producer. They are the interchangeable, uniform raw ingredients of society, and in this specific case, the modern food system. Think of corn, wheat, sugar, and milk to name a few. The scale of the demand creates relatively stable markets where producers can clear inventory into large markets. Markets treat the products anonymously without regard to the producer/farmer of said item. As Karl Marx put it “From the taste of wheat, it is not possible to tell who produced it, a Russian serf, a French peasant or an English capitalist.” Price discovery is a function of the market as a whole. It is blind to production methods, be them innocuous, virtuous, or nefarious, it’s set by the market in aggregate.

Agricultural commodities are as old as civilization itself. The moment we could produce in excess of our needs, we settled down, developed skills, and traded. There are records of the agricultural commodity agreements among the ruins of ancient Sumeria, around 3,000 BC, outlining that a farmer would deliver X amount of Y at a specific time in the future for an agreed upon price. The Code of Hammurabi (1,754 BC) deals with ag commodity contracts. From Aristotle and the ancient Greeks, to the founding of The Amsterdam Stock Exchange in 1530, or the Dojima Rice Exchange in Osaka Japan in 1697, or the Chicago Board of Trade (CBOT) in 1848, food was paramount to civilization. Why wouldn’t it be? It’s a basic human need. Armies march on their stomachs, citizens rise, and kings fall with the food supply. Only in modern times with unprecedented food stability have we had the luxury of forgetting the importance of food.

Growing a commodity like corn is at best an unending struggle for survival, at worst complete financial collapse with the first misstep. Our current commodity based system, created over the last 70 years, has delivered abundance and security, an unimaginable world of flavors and convenience. Since the end of the second World War the proliferation of fertilizers, new growing methods, seed varieties, fertilizers, pesticides, herbicides, and GMO’s have saved millions upon millions from starvation across the globe, and at home Americans are spending less of their income on food than at any time in history. It’s created tremendous profits for multi-national food companies and big agri-business, put small family farms at a significant disadvantage, increased our waistlines, and hurt our health.

The system has hurt our rural economies, lowered the nutritional value and flavor of the food we eat, and wreaked havoc in our natural world — from dead zones in the Gulf to bee colony collapse. It industrialized the living, moving LIVE(stock) from fields and pasture to pens and spreadsheets. Monocropping consumed diversity as fertilizer enabled agri-business to disregard soil health. Irrigation and transportation advancements washed away our understanding of the seasonality of food as quickly as it eroded topsoil. Until very recently there was no financial reward for a farmer that chooses to give a cow room to move, or looks to improve the health of their soil. To the contrary ethics and sustainability just increase costs and lower profitability. In a commodity system there is no way to get a premium for best practices, ethical treatment of animals, sustainability, nutritional value, or flavor.

Which brings us back to Howie Buffet’s corn. Warren is right and will be for as long as corn remains indistinguishable, as long as consumers accept that corn is corn is corn. But all corn is not created equal and consumers are starting to acknowledge that. They are increasingly aware that some growing methods are more sustainable than others. That nutrition varies as does distance and carbon footprint. By adding transparency; labeling clarity, growing methods, point of origin we begin to differentiate, and with differentiation comes change. Transparency introduces a return on investment for farmers who strive for better, it rewards best practices. Tomatoes are a great example. Remember the ubiquitous palm sized hard orbs that were the standard not that long ago? Shipped from Florida in little green plastic trays and shrink wrapped? Once consumers “rediscovered” heirloom tomatoes, the tasteless balls that were the standard started to disappear. That change was driven by flavor. Eating a great tomato is an epiphany, and who wouldn’t pay a few cents more for flavor transcendence? The consumer changed the market. Does a pig freed from indoor confinement to feel the rays of the sun, or a chicken that has room to move deserve less? If you could feed your children today for a few cents more, so you wouldn’t be robbing from their tomorrow, wouldn’t you? A transparent system incentivizes some men and women to be their best, not just race to be the lowest cost producer. It produces a new system based on transparency, quality, and responsibility.

Food is a basic human need and the cornerstone of civilization. A better civilization starts with a better food system. You are what you eat, and you’re not a commodity. Demand information and vote for change with every purchase.