Amidst all the hand-wringing in the media over the rollout of Obamacare, the largest cuts in the history of USDA’s food stamp program (the Supplemental Nutrition Assistance Program) have taken place largely under the media radar.
The impact won’t be a positive one for animal agriculture.
The cuts went into effect on Nov. 1, when Congress allowed the increase built into the 2009 economic stimulus bill to expire. The reductions, which total about $5 billion, have affected some 47 million people who receive assistance from the SNAP program. That’s 1 in 7 Americans, more than half of whom, by the best estimates, are working the equivalent of a full-time job, although their incomes qualify them for the program.
Whatever your politics, there are politicians who try to make the case that cutting off benefits to low-income families and the working poor is a good thing. They say it will spur them to work harder (or longer) to make up the difference with additional earnings — including, presumably, retired seniors on fixed incomes who also need to get off their duffs and get a job.
(By the way, to qualify for SNAP assistance a single person living alone cannot have an income greater than $958 a month, in which case they qualify for about $47 a week, or $1,293 for a couple, in which case they’ll get about $44 a month apiece).
Maybe cutting back on that level of largesse might influence some people to work harder — or smarter, as business gurus love to suggest — but here’s an impact that is impossible to dispute: As people’s food budgets shrink, whether due to underemployment, SNAP reductions or other constraints on other purchasing power, they will be forced to make hard decisions about what food products they can afford to buy.
The one category that gets reduced first, or in many cases, cut out altogether, is meat and poultry — especially when less nutritious alternatives, such as macaroni, are significantly less expensive.
(Proving that the past is prologue to the present, back in the 1990s, when it first became trendy to make your own fresh pasta with some expensive Italian-made appliance, the late, legendary Chicago columnist Mike Royko noted that when he was a kid, if your family served “spaghetti” to some guests you invited to dinner, the first question they’d ask is, “What happened? Did you lose your job?”)
With retail beef prices hovering nationally around $4.90 a pound, ground beef selling at somewhere around $3.20 a pound; with pork chops averaging over $3.30 a pound and boneless ham selling for $4 a pound, how big of a meat purchase are people going to consider with their $47 in food stamps that has to last the entire week?
Any way you slice it, the cuts in the SNAP program will hurt domestic sales of meat and poultry.
Food is non-discretionary
Beyond that, there’s the economy to consider. Without consumer purchasing power, both retailers and foodservice operators suffer in direct proportion to people’s loss of income. That’s because supermarket food purchases aren’t made with discretionary income, and given the frequency with which Americans subsist on out-of-home meals — especially fast-food — neither are restaurant purchases.
Taking food money away from people thus hurts the entire food industry, which includes the majority of livestock producers’ end customers.
The reason the 2009 American Recovery and Reinvestment Act — the stimulus bill — increased SNAP benefits across the board was partly to mitigate the hardships imposed by the recession, but also as a highly functional way of delivering the best “bang-for-the-buck” stimulus to the overall economy.
When people receive food stamps, they’re spent fully, quickly and locally. Those dollars immediately recirculate in the local economy, which benefits all businesses, not just those selling food products.
Finally, for those who argue that private charities, churches and food banks can offset any gaps in people’s food budgets, here’s the salient fact: The fiscal 2014 SNAP cuts — not the whole program, just the $5 billion to be cut — exceeds the entire annual total of all private-sector food assistance nationwide. And virtually all of that food is already going to families who desperately need it.
These SNAP cuts, although they were agreed upon to fund programs keeping teachers employed and supporting Medicaid expansion in the states, are bad for the recipients, bad for the industry and bad for the economy.
You’d have to search to find another program “adjustment” with those three strikes.
The opinions expressed in this commentary are solely those of Dan Murphy, a veteran food-industry journalist and commentator.