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True Cost

The true cost of a holiday dinner

<p>What are the environmental impacts of that turkey and all the trimmings? There&#39;s a price.</p>

The holiday dinner has always been an occasion to gather family and friends together to enjoy a delicious feast. However, hosting a holiday dinner can come at a high cost — for the host’s pocket and for the environment.

Trucost analyzed the environmental impacts of 2 kg (4.4 lbs) turkey, 1 kg (2.2 lbs) potatoes and 1 kg sweet corn – the average quantities needed to make holiday dinner for a family of four. We examined the stages from farm to supermarket shelf, looking at the carbon and water footprints, and embedded waste and pollution, for each product. Trucost then calculated the natural capital cost of each of these impacts, applying the social carbon cost and the average cost related to water scarcity in the United States. The percentages on our graphic indicate the contribution each impact makes to the product’s total environmental impact.

(For a closer look at the results, please click on the image below).

Our analysis indicates that the true cost of a 2 kg turkey (the centerpiece of the dinner table) should be about 23 percent higher than the retail price, 1 kg of potatoes should be about 17 percent higher and 1 kg of sweet corn approximately 24 percent higher. Potatoes are the most greenhouse gas-intensive product, and sweet corn the most water-intensive. Greenhouse gases are the most significant impact for potatoes and turkey, presenting 44 and 41 percent of the overall environmental cost respectively. For sweet corn, water accounts for the highest external cost, representing 49 percent over the overall impact. In contrast, water only contributes 23 percent to the environmental footprint of potatoes. In fact the potato has a productive water use as it yields more food per unit of water than any other major crop.

However, the data can vary according to production country, a fact reflected in the regionally adjusted prices for water scarcity. For example, if sweet corn was produced in a water-rich state such as Ohio (one of the main corn producing states in the U.S.), the price of water would be 95 percent lower than if corn was produced in a water scarce state such as California. Sourcing corn from California would result in a 46 percent increase in the price of 1 kg sweet corn.

We compared the optimization potential of all three food items by changing sourcing locations from the most to the least water-scarce U.S. states. Sweet corn provided the biggest optimization opportunity, with a 38 percent decrease of the total cost when water is sourced from the least water scarce region. By optimizing sourcing locations by water scarcity we also found the price for potatoes decreased by 16 percent and for turkey 7 percent.

These results are in line with Trucost’s previous blog “The true cost of food,” in which we looked at the breakfast food items of cereal, orange juice and cheese. Considering price optimizations based on the water scarcity of different sourcing locations showed that cereal had the highest optimization opportunity, with the total cost dropping by 30 percent. Hence, both analyses show that the highest optimization opportunities exist for agricultural products.

The drought in the U.S. earlier this year has increased the pressures on water resources. As a result, commodity prices increased. In the U.S. (the world’s largest producer of corn prices for corn reached an all-time high in 2012. Higher corn prices also influence the prices of other food items that are linked to the crop, such as animal feed and other crops, such as wheat.

In addition to the analysis summarized in our graphic, Trucost wanted to gain a more complete picture of life cycle cost associated with the holiday dinner by incorporating the greenhouse gas emissions and costs associated with food preparation. By including domestic transport, home cooking and waste, the greenhouse gases (kg CO2e) for the turkey increased 42 percent.

The cooking phase of the turkey accounts for the second-highest emissions after production, contributing 21 percent of overall emissions. For potatoes, greenhouse gases (kg CO2e) almost tripled when taking into account retail, cooking and waste disposal. In fact, most of the emissions for plant proteins stem from the post-farm phase. For potatoes, about 90 percent of overall emissions come from the post-farm phases: processing, transport, retail, cooking and waste disposal — with most of the emissions coming from the energy used for cooking. This means frying rather than baking potatoes reduces the emissions associated with cooking (excluding emissions from the oil used for frying). By including shopping and home preparation, we can see a 26 percent increase in sweet corn greenhouse gas emissions.

The familiar sight of holiday dinner leftovers provides another focus for reduction efforts. While some may be saved for another day, a good portion will probably end up in the waste bin. A 2012 study by the Natural Resources Defence Council states that Americans throw away 40 percent of their food every year, at a cost of $2,275 for an average family of four. Most of this food ends up in landfill, where it makes up the largest share of solid waste. Food disposed of via landfill becomes a significant source of methane, a greenhouse gas which has a global warming potential 21 times higher than that of carbon dioxide. Composting is a viable alternative to reduce methane emissions and help soil to hold or sequester carbon dioxide. A study by CleanMetrics estimates that each year the food wasted represents 29 percent of annual production, costing the United States around $198 billion.

Essentially, wasting food ends up wasting resources such as water and energy. Hall et al. (2009) calculated that the 40 percent of food wasted since 2003 was responsible for wasting 25 percent of total freshwater use and 4 percent of petroleum oil consumption within this period. However, the responsibility for food wastage does not lie just with the end consumer. Businesses must also take ownership of wastage which occurs throughout their supply chains.

In developed countries, food wastage mainly occurs during the retail and consumer stages, while in developing countries high losses occur in the post-harvest and processing phase. This is intensified by spoilages in warm and humid climates, which can lack modern storage and transport infrastructure.

Trucost’s analysis shows that the cost of a holiday dinner for 4 would increase by approximately 22 percent if environmental costs were correctly accounted for. More sustainable food production requires collaboration along the entire supply chain – from farming to waste disposal. It is vital that retailers take steps to mitigate environmental impacts, such as investigating alternative sourcing locations and educating consumers on more sustainable ways to prepare and dispose of food. Our calculations indicate that incorporating environmental costs into sourcing location selection can make a 14 percent cost difference to a business.

Food production relies on natural capital and resource depletion will present risks for any company. Undertaking natural capital valuation can help a company to better understand these risks and start embedding environmental considerations into their decision making. This information can be used to inform future planning and create more sustainable and robust value chains.

Image of turkey dinner by Bochkarev Photography via Shutterstock

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