Food study exposed What is the cost of our food?

Production costs and selling prices differ widely

There is a big gap between the food prices we pay in the supermarket and the costs of manufacturing. An Augsburger study reveals the massive price difference, which exists between the shop price and the manufacturing costs. Consumers are left in the dark about the hidden costs. We pay too much or too little for our food?

Researchers at the University of Augsburg recently presented the results of their new study "How much is the dish - what do food really cost us?" At a Tollwood GmbH press conference on cultural and environmental activities. The research team examined how much certain food actually costs and how much the consumer pays. In doing so, they uncovered a massive gap between production costs and actual consumer prices. The study results can be viewed on the Tollwood Society website.

Luscious food with lots of meat is regularly on the table for many people in Germany. Would that change if consumers had to pay for actual production costs? (Image: Dar1930 / fotolia.com)

Mispricing and market distortion

"Our study reveals a significant false pricing and thus market distortion by the difference in price between the current producer prices and the true costs," reports Dr. med. Tobias Gaugler from the Institute for Materials Resource Management (MRM) of the University of Augsburg in a press release on the study. The study reveals, among other things, how consumer-fair consumer prices should look, so that they are in a fair relationship with the cost of production.

We pay too much or too little?

The researchers unearthed massive costs associated with food production but are currently not included in store prices. "The highest external follow-up costs and thus the largest false premiums go hand in hand with the production of conventionally produced products of animal origin," explains Gaugler.

How much food costs really?

According to the results of the study, animal products from conventional agriculture would have to be supplemented by 196 per cent to cover actual production costs. This would mean that all conventional meat products would be three times as expensive as before. Even conventional dairy products would have to be twice as expensive to cover the actual costs (96 percent surcharge).

Which foods have the best relationship?

According to the Augsburg investigation, the best relationship between production costs and consumer prices for organic plant products. Here, a premium of six percent could cover the cost of manufacturing. In general, the cost ratio for organic food is a bit more production-friendly. For example, a 35 percent premium would cover the cost of organic dairy products and an 82 percent mark-up on the cost of organic meat products.

Why are there such massive price distortions??

"With animal products, the amount of external costs and surcharges can be explained in particular by the energy-intensive breeding of livestock," writes the Augsburg team. During the raising and keeping of the animals numerous follow-up costs are incurred, which are not or only partially included in the final price. For example, this would include the following factors:

• Fodder production,
• Heating and ventilation of the stables,
• Discharge of reactive nitrogen,
• higher energy requirements than with vegetable products.

Why is the ratio better for organic food??

"Most of the markup is due to the nitrogen driver, followed by greenhouse gases and energy," the study's authors sum up. In the case of organic food production, the absence of mineral nitrogen fertilizers in plant cultivation as well as the reduced use of industrial concentrates in livestock farming would, above all, provide the better consumer price / cost ratio.

The market has failed?

"For many of the negative consequences for the climate, the environment and health resulting from the production of food, neither agriculture nor consumers currently come to the attention", emphasizes Dr. med. Gaugler. He sees in the current price and market distortion a market failure, which must be countered with economic policy measures. As the researchers report, it is likely that actual costs will vary even further as unpredictable factors such as antimicrobial resistance and the environmental impact of using pesticides have not yet been included in the calculation.

who pays?

"The ecological and social costs are paid by the community and not by the consumer," comments the managing director of the Schweisfurth Foundation. Niels Kohlschütter. The prevailing prices have no relation to the truth. "It can not be that the costs of ecological damage in food production are not priced in and instead have to be paid by the general public," adds Stephanie Weigel of Tollwood GmbH. Consumers would be fooled. According to Weigel, many more people would buy organic products if all food were endowed with a production-friendly final price, since then they would hardly be more expensive than conventional products.

An example of calculation - what would consumers have to pay for??

If the hidden costs revealed in the study were added to sales prices, the average price increase would be as follows:

• Conventional animal products: + 3,57 Euro per kilo
• Organic animal products: + 2.83 euros per kilo
• Conventional dairy products: + 0.25 Euro per kilo
• organic dairy products: + 0.17 euros per kilo
• Conventional herbal products: + 0.04 Euro per kilo
• Organic herbal products: +0.03 Euro per kilo

(Vb)