Do Government Subsidies Make Meat Cheaper? Yes, but With Some Important Caveats

One of the chief purposes of the Department of Agriculture is to support American agriculture, and in practice, that means supporting meat. Meat and dairy producers receive around $38 billion every year in financial assistance from the federal government, and it’s long been argued that these agricultural subsidies result in cheaper meat to American consumers. But do they really?

The answer is a (very) qualified yes. Agricultural subsidies probably do reduce the price of meat for consumers, but it’s likely a very small reduction. The bigger reason for meat’s relative inexpensiveness is the simple fact that meat, and especially chicken, is incredibly cheap to produce. This cheapness comes at a cost to many — including slaughterhouse workers, communities living near factory farms and farm animals, who endure immense suffering as a result of these “efficient” farming practices.

Meat comes with many hidden costs related to health and the environment, that are paid not by meat producers or consumers, but by society at large. Increased greenhouse gas emissions, biodiversity loss, water contamination, ecosystem destruction, heart disease and antimicrobial resistance are but a few examples.

Why Meat Is So Cheap

Chicken is the most popular meat in the world, and with the exception of fish, chickens are the most commonly-farmed vertebrates by a fairly wide margin. There’s a good reason for this: in comparison with beef and other types of meat, poultry is very cheap and efficient to produce.

Some of this has to do with the biology of chickens; they eat corn and soy, which are relatively cheap crops to grow. They also require less food on a relative basis: it takes just 2.4 pounds of chicken feed to produce one pound of edible meat, while creating a pound of beef requires over 10 pounds of cattle feed.

But this isn’t entirely a natural phenomenon. Over the decades, chickens have been selectively bred to grow bigger and faster than they naturally would have. This allows farmers to raise far more chickens more quickly than ever with less food, but it also results in chickens who struggle to walk or even stand up, and spend much of their lives laying in their own waste as a result.

This brings us to another huge reason why meats of all kinds are so cheap. In factory farms, animals are frequently kept in cramped and unsanitary conditions, denied the ability to engage in their natural behaviors, separated from their parents at birth, and killed in painful and often gruesome ways.

The reason factory farms treat animals this way is to save money. It’s cheaper to cram a bunch of animals into one dirty pen than it is to give each of them enough space to roam and graze, for instance. But this “efficiency” comes at an enormous cost to the animals themselves, who live out most of their lives in pain and misery as a result of these practices.

The Hidden Costs of Meat Production

The daily suffering that farm animals experience isn’t the only hidden cost of the meat industry. Animal agriculture also takes a steep toll on the environment and public health — things that, much like the wellbeing of animals, is difficult to put a dollar amount on.

To begin with, meat production is a major contributor to global warming, as it’s estimated that between 11 and 20 percent of all greenhouse gasses are the result of animal agriculture. Factory farms are also the number one source of water pollution in the U.S., which threatens both human and aquatic life alike, while the misuse of antibiotics in factory farms has led to the rise of deadly, antimicrobial-resistant pathogens.

In addition to all of this, beef production in particular is the number one driver of global deforestation, which has an array of disastrous environmental impacts on its own, including soil degradation, ecosystem destruction and biodiversity loss.

On the societal front, multiple studies have shown that when new slaughterhouses are built, incidents of domestic violence and sexual abuse increase in the surrounding communities. Factory farms and slaughterhouses are also rife with illegal labor practices, including child labor and falsification of payroll records. The fact that a disproportionate number of farm workers are undocumented immigrants means that these abuses often go unreported and unchecked.

These costs aren’t baked into the price of meat. They’re paid by humanity at large, in the short and long run, and will have increasingly dire consequences over time.

Why Defining ‘Subsidies’ Isn’t Straightforward

While federal subsidies do reduce the price of meat, quantifying that reduction is nearly impossible, in large part because there’s no firm definition for what does and does not constitute a subsidy.

Some of the USDA’s policies indisputably count as subsidies. Direct payments to farmers are the most obvious example of this; crop insurance discounts, price loss coverage, conservation programs and disaster aid are also forms of financial assistance that agricultural producers receive from the federal government.

But some initiatives fall into a grayer area. There are many federal policies that don’t involve any direct financial transactions with agricultural producers, but nonetheless reduce those producers’ operating costs and ease their financial burdens as businesses. Depending on the definition one uses, policies such as these could reasonably qualify as subsidies.

Unofficial Subsidies: ‘Avoided Costs’ and Special Treatment

“Another way to think about subsidies is as ‘avoided costs,’ and that can be done through favorable regulatory environments,” Andrew deCoriolis, Executive Director of the nonprofit Farm Forward, tells Sentient.

For instance, up until very recently, salmonella was not considered an “adulterant” in raw chicken. This meant that, among other things, raw chicken that was found to have salmonella in it was nevertheless shipped to stores and sold with a label stating that it was “Passed and Inspected” by the USDA.

This has recently changed, and beginning in 2025, salmonella above a certain level will be considered an adulterant in stuffed raw chicken products or frozen breaded chicken — much to the chagrin of poultry producers. But previously, this lax regulatory environment allowed chicken farms to save money on salmonella-related safety protocols that they otherwise would have had to implement.

Does this count as a subsidy? It’s a matter of perspective, but deCoriolis, whose organization aims to end factory farming, argues that it does.

“Right now, those products enter the marketplace even if they have salmonella and the USDA knows that they do,” deCoriolis says. “I think of that as a form of subsidy, because that’s something unusual to the meat industry — that they get these sort of regulatory passes.”

There are plenty of similar examples. Every year, the USDA spends $1.2 billion on advertisements and promotions for American agriculture. This could also be considered, in effect, a subsidy. The USDA also spends $3 billion on agricultural research every year, leading to the development of new technology that increases efficiency and profitability of farms. That said, this funding also goes towards research into climate-smart farm projects and conservation programs, not just animal agriculture.

In almost any other industry, businesses themselves pay for advertising and research. But agribusinesses are essentially given a $4.2 billion voucher from the federal government to spend in these areas. While the USDA might not consider these “subsidies,” they have the same effect of offloading some of the industry’s business expenses to the federal government.

What Is the Price of Meat, Without Government Assistance?

Some researchers have attempted to calculate how much more expensive beef would be without federal subsidies. Unfortunately, these estimates differ wildly.

In 2015, for instance, a highly-touted paper from UC Berkeley’s engineering school claimed that, if not for federal subsidies, a pound of hamburger meat would cost $30, compared with the $4.00 per pound that it actually cost at the time. That’s an enormous reduction, and would mean that the USDA is artificially reducing the market price of meat in the U.S. to a much bigger extent than many people realize.

On the other end of the spectrum, we have the much more modest estimate in David Simon’s book Meatonomics from 2013, which says that a $4.56 Big Mac would only cost $0.70 more without federal subsidies. That’s a 15 percent reduction in price — not nothing, but not exactly earth-shattering, either.

It’s also frequently argued by vegan and food justice activists that the price of a Big Mac would jump from $5.00 to $13.00 without federal subsidies. This claim, however, is based on a misreading of the aforementioned UC Berkeley paper.

What the paper actually says is that a Big Mac would cost $13.00 “if the retail price included hidden expenses that meat producers offload onto society.” That’s a much broader category than just subsidies. It includes things like the health and environmental costs associated with meat production and consumption, neither of which are subsidies.

All of this is further complicated by the fact that agricultural subsidies, like all federal expenditures, are paid for with taxpayer dollars. In that sense, consumers are already paying for the “true” price of meat. They’re just doing this through their tax payments, as opposed to the money they spend at McDonald’s.

Around five percent of Americans don’t eat meat at all — but their tax dollars still fund agricultural subsidies. This means that, even accounting for taxes, meat-eaters are paying a little bit less for their meat than they otherwise would, as vegetarians and vegans are paying for a portion of federal meat subsidies.

In other words, it’s complicated. And in the end, all of these complications make it nearly impossible to say exactly how much cheaper meat would be without federal subsidies.

Are Agribusinesses ‘Too Big to Fail?’

The main argument in favor of agricultural subsidies is that the agricultural sector is “too big to fail.” Americans need to eat, and food systems are so central to the continued functioning of society that the government must shield agribusinesses from the normal market risks that other industries face.

The general premise of this argument is correct. We do rely on food systems to live, and a collapse of any country’s agricultural sector would have catastrophic consequences.

But it doesn’t follow that, because of this, the federal government should be subsidizing the meat industry specifically. Americans eat four times more meat than the global average, and while there’s debate around whether more fruit and vegetable subsidies would actually reduce the price of produce, that’s not an argument for propping up a polluting industry like industrialized meat.

Moreover, the argument that subsidies are needed to feed Americans is undermined by the fact that American farmers export around 20 percent of the food they produce. Some of the high-value products that are top exports include animal feed, beef, veal and pork, and the overall most-traded commodities are corn, soy and wheat.

Every year, American agricultural producers sell between $150 and $200 billion worth of U.S.-made food to other countries. This includes around $35 billion of meat and dairy — which is just a little bit shy of the $38 billion a year in subsidies that meat producers receive every year from the federal government.

“A huge amount of American production goes abroad,” deCoriolis says. “This isn’t about feeding Americans. Increasingly, it’s about feeding Mexico, and Canada and Asia, and other places around the world.”

These exports don’t result in cheaper food for Americans, and they don’t make food any more accessible for Americans. Rather, they provide food for people in other countries by boosting international trade, and increase the profits of American agribusinesses.

The Bottom Line

Federal subsidies do reduce the price of meat for consumers, at least to some degree. But putting an exact number to that reduction is tricky, as subsidies are a nebulous concept that can be difficult to measure.

There’s no question that the federal government wants the American meat industry to be profitable, and spends quite a bit of money to ensure that it is.