I’ve found myself conversing with a lot of folks lately about the rising price of food, and to a certain extent, the rising price of fuel. Largely there’s just a curiosity about how much it affects our operations (the answer is that we are impacted but not as much as some other restaurants, more on that further down).
In discussing the food/fuel rises, I’ve come to notice something very few news articles touch on, even in nominally analytic media like the Wall Street Journal. That is, food and fuel costs are rise together because, in our economy, food is fuel, more than it’s ever been, and vice versa.
I don’t mean that both food and fuel contain calories and serve to power people and machines, respectively. That’s always been true.
I mean that, due to our farming methods, most food in our economy is fossil fuel which has been converted into food with the aid of extracted resources from the environment such as soil and water. That is, the key source of energy which creates, say, factory pork, is fossil fuel — both as it is added to soil as fertilizer to grow the genetically modified corn and soy, and then as it is used to transport the corn and soy to confinement houses where the corn and soy are in turn converted into protein and fat (also known as pigs).
In short, much of what America eats, from breakfast cereal and bacon to marbled dinner steaks and french fries, is created by an industrial system which converts fossil fuels into edible (if not exactly nutritious) substances. The process takes resources of not only sunlight but soil nutrients and water which are not replaced. This industrial production is extractive.
This extractive conversion of oil to food stands in opposition to traditional farming, which cultivates the wheel of life — birth, growth, death, decay — for a myriad of forms, from the crops and animals and people to the bugs and microorganisms which populate the soil. In traditional farming, the health of the soil, where death becomes life, is the foundation on which the cycle rests. Since the system is in balance, and feeding the soil is paramount, the system is not extractive. It’s sustainable.
So, in the current economy, an industrial producer of beef or pork or bread is subject to rises in the cost of oil not just for transportation, but as the very source of energy that the producer is selling. Obviously in this environment the rise in the price of oil will be quickly followed by a rise a price of oil based foods — which, in our Corn Economy, is damn near everything you can buy in the supermarket.
But wait, as the Ginsu man says, there’s more. With the addition of a mandated ethanol market, rather than converting oil to food and selling it to the public, we now convert oil to corn and then back to oil and then back to corn, indefinitely. Given that each transformation diminishes our environment’s ability to sustain human life , this has to be one of the most insane applications of government policy in history (bread and circuses without the bread).
The World Bank estimates that ethanol has caused a 75% increase in world food prices. Converting oil to food and back again is causing the supply of food to diminish.
Of course, each transformation from oil to corn and back is quite good for the shareholders and directors at companies in the oil, corn, and transformation businesses.
Government-compelled ethanol production actually removes the necessity of market demand to raise prices (though of course there will always be plenty of demand to move goods, drive cars, and, you know, eat). Now, all that’s needed to drive profits is enough energy spent in the transformation process and we can have perpetual shortages of both food and oil, which will boost the shareholder value of companies not only in the oil business but also in the petroleum-based food business such as fertilizer, seed, and corn processing companies. In fact, the only way I can think to further assure profits is to start feeding our crops Brawndo. (It’s got what plants crave!)
(BTW, note that actual farmers in the industrial system get the shaft here, all they do is give up the health of their land in exchange for the minimal amount of money allowed them by the companies who sell them seed and fertilizer and buy their corn and soy.)
So here we are now in caught in the cycle of rising food and fuel costs which seems to be largely out of the control of the actual eating/buying populace. How to we get out of it, and in the meantime, what does this situation mean to restaurants like the Linkery?
The answer to the first question is, I think, clear (if challenging to implement). With the addition of biofuel production to the agricultural/industrial complex, the only way to save the soil, the farmers who tend the land, and the communities that depend on the farmers, is to quickly develop a traditional farming infrastructure on which we can live. This means small farms growing myriad crops and animals in harmony with their ecology. Some farms like this do exist, even here in San Diego, but they are often considered providers of luxury items, when in fact they are providing our barest necessity: the framework for how we can continue to feed ourselves.
As for what the current situation means to restaurants in general and the Linkery in particular (this is the question I’m often asked which leads me to write this post), it’s really a challenging time for restaurants, particularly traditional ones. We’re all dependent to a certain extent on basic commodity staples, such as flour and so forth. And to the extent that any of us are dependent on Midwestern-grown staples, we’re feeling the cost impacts hard.
Furthermore, restaurants that sell primarily specific cuts of meat, such as pork chops or T-Bone steaks, etc., are in an even tougher bind. This is because, traditionally, the preferred cuts of meat are where the farmer recoups the main cost of growing the animal. Pigs in this country are grown primarily for the loin (pork chops). So the farmer has to recoup most of the his cost of the pig in selling the loin — the rest is often sent to the commodity market and does not return much to the farmer. A restaurant that always has a pork chop on its menu, then, is feeling the whole of the impact of the soaring cost of oil and corn, all in the 10 ounces or so of chop on the plate.
As a result, the best way for a restaurant to insulate itself from the cost of rising food and fuel is to 1) buy from farms that are separate from the corn economy, including local integrated traditional farms and farmers that raise animals on natural pasture, and 2) buy and serve whole animals, so any additional costs of fuel and food are spread through the whole weight of the animal rather than just a single muscle.
We’re fortunate that our basic idea for the Linkery has brought us to where we’re already doing quite a bit of both of those, and have been continuing to work to do more. However, our menu and purchase structure isn’t enough to totally remove us from the food/fuel rises, because (due to almost no infrastructure for a local food economy) most of our producers — even local and regional ones — have significant transportation costs, and because none of our producers are completely insulated from the costs of introducing at least a little food or energy into their systems (remember, in Omnivore’s Dilemma, Michael Pollan notes that even Polyface Farms uses the input of chicken feed).
Next up for all of us, to reduce the impact of the food/fuel cost craziness: rebuild the local food infrastructure, including local farms, urban microfarms, real local greenmarkets (either virtual or physically located), and a local USDA meat processor to restore the viability of local livestock farming.