How can we undermine the factory farming system? Some argue that factory farms rely on structural supports to survive. In this newsletter, I focus on three commonly cited supports — farm subsidies, sub-therapeutic antibiotics, and market concentration — which seem fairly indefensible:

Farm subsidies cost the American taxpayer about $20B every year, more than double the EPA’s budget, mostly to support wealthy corporate farms.

About 80% of all antibiotics in the US are fed to farm animals, almost all non-therapeutically (not to treat disease), contributing to antibiotic resistance.

The pork, chicken, and beef industries are today more concentrated than the beef industry was in 1902, when it was a target of President Theodore Roosevelt’s trust-busting.

But how important are these supports to the factory farming system? Could removing them make plant-based or pasture-based meat cost-competitive with factory farmed meat, as some claim? This newsletter is my first, very tentative, attempt at answering these questions.



Farm subsidies



The federal government largely doesn’t subsidize factory farms directly, but it does subsidize the crops on which they depend. It does so through the farm bill, which Congress first enacted in 1933 as part of the New Deal, and has since re-authorized roughly every five years. The farm bill's centerpiece is farm subsidies, which mainly subsidize farmers to buy crop insurance (direct payments to farmers are a thing of the past). These insurance subsidies lower the price of crops like corn, helping factory farmers, for whom feed costs can reach 70% of production costs.



But these subsidies might not help factory farmers as much as we think. It’s tough to estimate the effects of crop insurance subsidies because of the many factors that affect crop and meat prices. The best estimates I know of though, from agricultural economist Jayson Lusk, suggest that repealing US crop insurance subsidies might only raise animal protein costs at retail by 0.1 to 1%.



Other federal farm policies may negate even this small effect. The federal ethanol mandate requires fuel refiners to blend ethanol into their gasoline, creating competition for corn, the most popular feed grain for farm animals, especially chickens. Estimates of the price effect of the ethanol mandate vary wildly, from less than 1% to over 50%. But even taking a conservative estimate, the ethanol mandate might more than cancel out the impact of crop insurance subsidies.