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Monday, December 21, 2020

Food for Thought for Alaskans

Alaska’s Food Security Options

 (2020©donnliston.com)

 


Alaskans have come to take a lot of things for granted because of innovation and initiative for food security in this state. We may live in the Arctic Climate Zone but our ability to create local food sources and access food from other places has evolved. By understanding the requirements of food security and economics related to delivering food to Alaskans we may better assure food security into the future.

Let’s start by looking at what we know about Alaska food systems.

A September, 2012 study by the University of Alaska Institute on Social and Economic Research (ISER) took a comprehensive look at Alaska food systems. In the study a food system was defined as having five components: 1) production, 2) distribution, 3) food preparation and preservation or processing, 4) food use and consumption, and 5) the recycling and disposal of food wastes.

To read the details of this state report you may go to the link in the References.

I personally think this report is overly complicated, resulting in an 85-page study that the State of Alaska paid for. We writers are usually paid by the word, you know.

ISER was hired to do this study because the Alaska Department of Health and Social Services, Section of Chronic Disease and Heath Promotion wanted to know what was known and not known about Alaska’s Food System. The researcher’s task was to locate, compile, and describe indicators for each component and to note potential concerns with any indicators. The final report provides an overview of the food system model, a demographic overview of Alaska’s residents, examination of identified components of the food system, a chapter on data, and a final index of the indicators and source information.1

We may be seeing the result of this effort in television commercials featuring Alaskans who social workers at the H&SS want to encourage to live more healthy lifestyles by eating and drinking less sugar, smoking less, drinking less alcohol, and engaging in healthy pre-natal practices. This “Social Engineering” is necessary because our public education systems are derelict.

Our neighbors to the west, in the former Soviet Union, addressed similar efforts through Five-Year Plans:

Five-Year Plans, were a method of planning economic growth over limited periods, through the use of quotas, used first in the Soviet Union and later in other socialist states. In the Soviet Union, the first Five-Year Plan (1928–32), implemented by Joseph Stalin, concentrated on developing heavy industry and collectivizing agriculture, at the cost of a drastic fall in consumer goods. The second plan (1933–37) continued the objectives of the first. Collectivization led to terrible famines, especially in the Ukraine, that caused the deaths of millions. The third (1938–42) emphasized the production of armaments. The fourth (1946–53) again stressed heavy industry and military buildup, angering the Western powers. In China, the first Five-Year Plan (1953–57) stressed rapid industrial development, with Soviet assistance; it proved highly successful. Shortly after the second plan began in 1958, the Great Leap Forward was announced; its goals conflicted with the five-year plan, leading to failure and the withdrawal of Soviet aid in 1960.2

From an Alaskan’s point of view, we should not want to repeat the mistakes of our neighbor but rather engage the power of our capitalist economic system to assure high production of food in Alaska. So, the part of this report that is relevant to Food Security is about Production.

Farm Characteristics

For a young state Alaska has been in the business of agriculture for a long time. The 1959 Census of Agriculture included information for 1900, when it documented 159 acres of land in farms. But that acreage increased rapidly in the next four decades and in the Census of 1939 was 1,775,752.9 In Table 3.1, we present data from the Census of Agriculture for 1997, 2002, and 2007. In 2007, Alaska had 881,585 acres, or two-tenths of a percent of the state’s total land area, as farmland. Fifty-nine percent of Alaska farms have less than 100 acres of farmland, with 23 percent of Alaska farms between 100 and 499 acres. This means that 82 percent of all Alaska farms are on less than 500 acres. 

Over the time period from 1997 to 2007, the amount of farmlands in Alaska has increased by one-tenth of one percent. The size of farms has decreased overall, with farms less than 100 acres increasing by more than 30 percent. With the exception of farms 500 to 999 acres (-8%), other categories of farm size decreased by more than 25 percent. The trend is showing a shift toward smaller farms, with most farms less than 100 acres in size in 2007.3



The trend was going in the wrong direction in 2007 with smaller farms struggling to produce whatever they can eek out in small plots, as might be expected in a Soviet style system.

From the report:

Farm financial indicators

The farm financial indicators of crop-production employment earnings and net income both increased slightly. Farm employment and wages increased by the end of the five-year period from 2006 to 2010, but in the intervening years there were fluctuations. (See Table 3.3). 

 


We have a stagnant Agriculture sector. The state has used oil revenues to dabble in agriculture with poor results, and it will be up to policymakers to change how Ag Land is provided if we are to increase production, according to Greg Giannulis, owner of Mike’s Quality Meats and Mt. McKinley Meats and Sausage:  “Northern Canada has the same weather as Alaska and they raise many cattle there, on 10- 20- 50-thousand acre plots,” Giannulis explained. “Alaska government provides only 600-acres for Ag Land and that keeps the price of meat higher. It is not commercially viable to raise meat here at this level.”

Giannulis continued: “Second of all, locals say it costs more to raise meat here. No, if Canada can send beef here at $1.10-$1.20 per pound to the slaughter houses, and ship live animals to the lower 48, then why can’t we do that here? We need livestock to be raised in Alaska for the same amount as they pay in Seattle, maybe 10-20 cents higher.”

 

Production levels seem to bear this out the fact we do not have efficiencies of scale:


4See Reference

This is a pittance of what Alaska requires to feed our population, documented a decade ago:

From the report:

5See Reference

Producing more meat in Alaska will drive the price down for all consumers.

We all must eat. Whatever else is going on with the economy, the price and availability of food will determine health of all who live here. The promise of statehood was that we would determine our own destiny as part of the United States of America but today we are still dependent upon Seattle for most of our food--shipped to the Southeast Alaska ports and to the Port of Anchorage. Quality and price are controlled from out of state.

In response to my questions, Giannulis goes to his constantly busy calculator, tap-tap-tap-tap: “We sell our beef for an average price of $4.59,” he explains in real time numbers. “That's $3.49 per pound plus slaughter/processing costs. I have been able to get the average cost of beef down to $3.00 per pound.”

 Food Security is an Economic Proposition.

“As soon as I started the Rocket Ranch I lowered the price--before I bought the Mt McKinley slaughter house, when I lowered the price even more,” he explained. “Since the day I bought Mt McKinley Meats & Sausage (MMMS) from the State of Alaska (2017) we have lowered the price of beef and pork to all Alaskans.”

Mt McKinley Meats and Sausage in Palmer, Alaska

That’s how the economic principal of Supply and Demand works. More supply lowers the cost, more demand increases the cost.

Here is how that has worked for Alaskan consumers: “Over three years I probably lowered the price four times,” Giannulis continued. “The rate was $5-$6-$7-per pound then. They used to sell pigs for $6 to $7 per pound—now pigs from Delta are selling for $4.70 per pound. Our price of $3 per pound is $1.70 lower; that’s a lot of savings! A 200 pound hog, times $1.70, represents a savings of $330 per hog.”

In his brash manner, Giannulis further explains: “I am setting the price for everybody and some may hate my guts for it. The big picture is we must drive the price down to compete. If they pay $2 per pound for a steak in Seattle we can charge $2.10-2.20 here, to be at the same level as Seattle pricing."

Giannulis begs the question:  “Why would Alaskans buy meat from Seattle if they can get it for the same price here? Utility and labor costs are the same as Seattle. We have no fight from Seattle now for the amount we are able to produce in-state, but if we started having commercial farms of 10,000+ acres, Seattle will fight us. They want the majority of the state dependent on them for our food. If we can lower the price by higher levels of food produced in Alaska there is nothing they can do.”

As a colony of the United States, we do not have enough livestock in Alaska now. Giannulis is doing all he can to gain access to animals from Montana in addition to those he raises in Palmer and at Delta.


“We can bring them from Canada but we choose to buy from the USA,” Giannulis continued. “So Montana is one of the hubs we bring livestock from. We will have 50 animals arriving Jan. 5
th. They load the animals in Montana and haul them by truck to Edmonton, Alberta. There they stay one day to water and feed, before loading them up for the 32 hours to Alaska. The price is the same for beef in Canada but why give them our money if we can keep it in the US? We send our own trucks down to Edmonton to pick up the animals and bring them here. We try to cut out all the middlemen and deliver the product at best price for Alaskans. It has taken a few years to get this set up.”

Giannulis estimates he has invested $2.5 million in his operation including the farm, storefront and processing plant, without taking out any loans. “When I came to Eagle River 40 years ago I had a pair of pants and a jacket with a hole in it,” he proclaimed.

Mike's Quality Meats in Eagle River

When the State of Alaska owned the slaughterhouse very few animals were processed while three managers made executive salaries and prisoners from the Alaska Department of Corrections did the work.

“I have 12-15 people at the slaughter house who process the cattle and hogs,” said Gainnulis. “The animals are gathered and slaughtered and a day later processed into meat boxes mostly. We ship to anybody according to what they want. They call it in; some may require custom cut steaks, or other variations, and we give them what they want. By having the complete system from USDA Certified slaughterhouse to customer we are able to assure meat for Alaska at the best price available.”

Giannulis looks at Food Security through the prism of a businessman: “We need Alaska Ag Land for food security. Right now we have good business practices to deliver meat for Alaskans but we need land to grow hay, for barley, for hops, infrastructure: Stables, barns, for the people who work there bunkhouses, representing millions of dollars.

If the land is available the infrastructure will be built by innovative farmer/businessmen.

“If we have ag land the rest is on us” continued Giannulis. “The current 600 acre allotments are not enough to do anything. We need five acres per cow on average. Some land will support a cow on 3 acres some will require 10 acres per cow--600 acres will support 120 cattle. We need to kill that many every day!

That’s the big picture and with the recent pandemic we learned what is really important for Alaska Food Security:

”In April, when meat was not available in the entire United States, I had as much meat as anybody in Alaska wanted to buy,” Giannulis said. “Limits were placed on meat—one steak or two stakes at some stores—but we provided for Alaskans. That will be how we always operate.”

 

References:

 

1ISER Publication - Food System Assessment, Khristy Parker, Irina Ikatova, Rosyland Frazier, Virgene Hanna, Report 92pp, 09-01-12, Prepared for Alaska Department of Health and Social Services, Obesity Prevention and Control Program, Pg 1, Background.

http://pubs.iseralaska.org/media/65898f7a-a206-4c2a-8c31-c9fa57b8b366/2012_09-FoodSystemAssessment.pdf

 

2 Encyclopaedia Britannica online: https://www.britannica.com/topic/Five-Year-Plans

 

3ISER Publication – Food System Assessment, Pg 15.

 

4ISER Publication – Food System Assessment, Pg .19

 

5ISER Publication – Food System Assessment, Pg 5.

  

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