True Cost Accounting of food

What is True Cost Accounting (TCA)?

The price of a fast-food burger does not reflect the cost to society, the environment, and human health. True cost accounting is an innovative and evolving method for determining the true costs, and benefits, of different types of food production systems. This new way of accounting will help to develop practical policy solutions for agricultural practices, and help move us to a more sustainable food system.

True Cost Accounting Research at the Swette Center

Unveiling the Hidden Capitals of Beef Livestock: A TCA TEEBAgrifood Application

Beef livestock ranching is an important agricultural activity rooted in the history of the American West. Despite the long history and culture surrounding cattle and ranching in the West, recent times have left many cattle ranchers feeling under attack as media attention has highlighted potential environmental impacts of cows and health concerns around red meat. As these generalizations influence consumer perceptions around beef consumption, there is a need to employ a more robust understanding of beef livestock production as a complex socio-ecological system. 

While mainstream conversations around beef bring to light important concerns, they also leave much unexamined. To address this, ASU and Colorado State University collaborated on a pilot study conducted with ranches in Arizona and Colorado. Using the true cost accounting (TCA) approach, we implement a more holistic assessment that avoids broad generalizations of ranching as either good or bad. TCA seeks to understand the broader, human, social, and ecological impacts of food systems activities to make better decisions about the food we produce and eat. We focus our work at the intersection of human, cattle, and rangeland; namely, the cow-calf supply chain, which is the primary stage of beef livestock production that relies on western rangeland. We use a combination of multiple qualitative and quantitative methodologies that complement each other. Results document the complexity of analyzing ranching in the West and provide monetary estimates that capture key benefits and costs in cattle production. Additionally, the findings in this report have allowed us insight into how different government policies support western ranching and rangeland conservation.

Milk and Plant-Based Alternatives TCA Research: A Collaboration with Starbucks

The consumption and sales of Plant-Based Alternatives (PBAs) have been growing substantially in the last decades. PBAs are beverages marketed as alternatives to dairy milk. They are derived from plant species that are manufactured to replicate the sensory characteristics of dairy milk, such as similar viscosity, white color, and creamy mouthfeel, while attempting to match important nutrient characteristics by fortifying them and promoting the calcium and protein content to be similar to milk. An important reason for PBAs increasing popularity is that consumers of these products consider them better than dairy milk for both the environment and animal welfare. However, given that their popularity and increased market importance are particularly related to their perceived positive environmental attributes compared to dairy milk, it is surprising that data on their environmental impacts in the scientific literature is limited, heterogeneous, and fragmented. Furthermore, there is very limited data on how PBAs compare to dairy milk in terms of their dependencies and impacts on human and social capitals. We are collaborating with Starbucks on carrying out a True Cost Accounting exercise of selected PBAs and dairy milk in order to assess not only the market prices of these beverages, but also by including the positive and negative externalities that they generate in order to arrive at their true cost for these beverages to help Starbucks make better and more informed decisions about the mix of beverages that they offer in their stores.

Kaiteki Center + Swette Center project

Edible oils are products that are not only important for direct human consumption, but also play a key role in the production of other food products. For example, canola oil is commonly used for the production of plant-based alternatives to dairy milk such as oat milk, or for the production of plant-based meats. However, the production and use of different edible oils generate different levels and types of externalities for the environment, diets, human and social conditions. The choice of edible oil has important implications for the sustainability of food products where the oil is an ingredient. Furthermore, different edible oils have different nutritional profiles, some healthier than others. Therefore, the choice of oils as ingredients can present important trade-offs between the externalities associated with an oil and its nutritional and health implications. For this reason, we are collaborating with the Kaiteki Center to carry out a True Cost Accounting exercise to compare the true cost of canola, palm, and coconut oils, which are some of the most common edible oils used in the food industry. The final aim is to provide evidence to make better and more informed decisions about the oils that minimize negative externalities while delivering healthier choices as ingredients for food products that are healthier and more sustainable.

FAO Advisory Committee – content TBD