Key Takeaways
- Prices lie: The price of beef excludes environmental damage, health costs, and subsidies. The true cost is several times the store price.
- Externalities are the rule, not the exception: Most production imposes costs on third parties who don't consent and aren't compensated. Markets systematically underprice harmful goods.
- Subsidies compound the problem: Taxpayers fund the beef industry through subsidies, then pay again through environmental damage, then again through healthcare costs.
- Fixing prices isn't radical: Internalizing externalities—making prices reflect true costs—is basic economics. The radical position is ignoring reality.
The Five-Dollar Burger
You can buy a fast-food burger for about $5. At the supermarket, ground beef costs maybe $5-8 per pound. These prices seem to reflect the cost of producing beef.
They don’t.
The price you pay excludes:
Environmental destruction
Climate emissions
Water depletion
Public health costs
Subsidies you already paid as a taxpayer
If beef were priced at its true cost, you’d pay much more—or you’d eat much less of it.
What the Price Excludes
Climate Emissions
Cattle are climate disasters on hooves:
Methane: Cows burp methane—a greenhouse gas 80 times more potent than CO2 over 20 years. Cattle are responsible for about 14.5% of global greenhouse gas emissions.
Deforestation: Cattle ranching is the leading cause of Amazon deforestation. When forests are cleared, stored carbon is released. The capacity to absorb future carbon is destroyed.
Feed production: Growing the grain to feed cattle requires tractors, fertilizers (often natural-gas derived), and transportation—all generating emissions.
A single pound of beef produces about 27 kg of CO2-equivalent emissions. A pound of chicken produces about 7 kg. A pound of lentils produces about 0.9 kg.
Water Use
Beef is spectacularly water-intensive:
1,800+ gallons of water per pound of beef
Most goes to growing feed crops
In water-stressed regions, beef production depletes aquifers
This water isn’t free, even if farmers don’t pay for it. Aquifer depletion is a cost—borne by future users who won’t have access.
Land Use
Raising beef requires vast land:
Grazing land: Cattle ranching uses more land than any other agricultural activity
Feed crops: About 40% of global grain production goes to animal feed
Opportunity cost: Land used for cattle could sequester carbon or grow food for direct human consumption
One acre produces about 250 lbs of beef. The same acre could produce 50,000 lbs of tomatoes or 53,000 lbs of potatoes.
Pollution
Cattle operations produce waste—lots of it:
Manure lagoons leak into groundwater
Runoff carries nitrogen and phosphorus into waterways
Dead zones in the Gulf of Mexico and elsewhere are caused partly by agricultural runoff
Air pollution from concentrated operations affects nearby communities
Public Health
Beyond environmental damage:
Antibiotic resistance: Most antibiotics are used in livestock. Overuse breeds resistant bacteria.
Zoonotic disease: Factory farming conditions can incubate diseases that jump to humans
Diet-related disease: High red-meat consumption correlates with heart disease and cancer
These are costs—but they’re not in the burger’s price.
Externalities: The Economic Concept
Economists call these “externalities”—costs (or benefits) that affect parties who didn’t choose to incur them.
When a cattle ranch pollutes a river, downstream communities bear costs they didn’t agree to. When beef production emits carbon, the whole planet bears the climate cost.
In theory, economics has a solution: internalize the externality. Make the producer pay the true cost. Then prices will reflect reality, and markets will work properly.
In practice, externalities are everywhere. They’re the rule, not the exception. And internalizing them is politically difficult because producers resist paying their true costs.
Subsidies Make It Worse
Not only does beef avoid paying for its damage—it receives taxpayer subsidies:
Direct Subsidies
Governments subsidize cattle ranching through:
Grazing rights on public land at below-market rates
Crop subsidies for feed grains
Water subsidies (irrigation at below-cost rates)
Emergency payments during droughts and disease outbreaks
Indirect Subsidies
The beef industry receives indirect support through:
Road infrastructure for transportation (general taxes, not user fees)
Research funding at land-grant universities
Regulatory capture (weak environmental enforcement)
Healthcare costs (treating diet-related disease)
The total subsidy is hard to calculate, but estimates suggest American taxpayers provide billions annually to make beef cheaper than it should be.
This is economically backwards: taxpayers fund production, then pay again for the damage that production causes.
The True Cost
What would beef cost if prices included externalities?
Estimates vary widely, but studies suggest:
Climate costs: Adding the social cost of carbon to beef production would raise prices by $5-10+ per pound
Environmental costs: Water depletion, land degradation, and pollution might add several more dollars
Health costs: The externalized costs of diet-related disease and antibiotic resistance are harder to quantify but substantial
A burger that costs $5 might have a true cost of $15-20 or more.
This isn’t an argument that no one should ever eat beef. It’s an argument that current prices are fiction—that cheap beef is cheap because costs are shifted to others.
Who Bears the Costs?
Externalized costs don’t disappear. They’re borne by:
Future Generations
Climate change costs will be paid by people who don’t yet exist. They can’t consent to this transfer. They can’t vote against it. They just inherit the consequences.
Vulnerable Communities
Environmental damage hits marginalized communities hardest:
Feedlot neighbors: Often poor and minority communities
Downstream populations: Bear pollution costs they didn’t create
Global South: Climate change disproportionately affects countries that contributed least to it
Ecosystems
Rivers, aquifers, forests, and biodiversity have no market voice. Their degradation isn’t priced because they can’t bid against their own destruction.
Public Budgets
Healthcare costs, infrastructure damage from climate change, and environmental remediation all fall on public budgets—which means all taxpayers share costs that specific industries created.
Why Don’t Prices Reflect Reality?
If true-cost pricing is basic economics, why doesn’t it happen?
Concentrated Benefits, Diffuse Costs
The beef industry has concentrated interests:
A few companies dominate
They profit from current arrangements
They can afford lobbyists
The costs are spread across millions of people (and future generations) who each bear a small share and have little incentive to organize.
Measuring Difficulties
Externalities are real but hard to quantify precisely. Industry exploits this uncertainty:
“We don’t know the exact cost of climate change, so we shouldn’t act”—even though we know the cost is large and positive.
Political Power
The agricultural industry has significant political power:
Campaign contributions
Jobs in rural districts
Cultural resonance (ranching, farming traditions)
Revolving door between industry and regulators
This power blocks policies that would internalize costs.
Consumer Expectations
People expect cheap meat. Politicians who propose higher prices lose votes. True-cost pricing is economically rational but politically difficult.
What Would Change?
If beef prices reflected true costs:
Consumption Would Drop
At $15+ per pound instead of $5-8, people would eat less beef. This isn’t a prediction—it’s how prices work. Higher prices mean lower quantity demanded.
Alternatives Would Compete
Plant-based proteins and lower-impact meats (chicken, small-scale production) would become relatively more attractive. Innovation would accelerate.
Production Would Change
If producers paid for their pollution, they’d have incentives to reduce it. Cleaner production methods would become profitable.
Environment Would Benefit
Lower beef production means:
Less deforestation
Lower emissions
Less water use
Reduced pollution
The environmental benefits would be substantial.
It Would Be Fair
Currently, beef consumers get a cheap product. Non-consumers (including those who don’t exist yet) pay for the damage. This is a transfer from the many to the few.
True-cost pricing would end this transfer.
The Burger as Symbol
Cheap beef represents a broader pattern:
Externalized costs are everywhere
Prices systematically lie
Current generations borrow from future ones
The powerless subsidize the powerful
Climate change is the largest externality in history. But it’s not unique—it’s the same pattern repeated at global scale.
Fixing climate requires fixing prices. Not perfectly—we’ll never calculate externalities precisely. But approximately, directionally, enough to change incentives.
A $15 burger isn’t punitive. It’s honest. It’s what the burger actually costs.
The Price vs. The Cost
$5: Store price per pound of ground beef
$15+: Estimated true cost including externalities
27 kg: CO2-equivalent emissions per pound of beef
1,800+ gallons: Water per pound of beef
14.5%: Share of global emissions from livestock
Billions: Annual taxpayer subsidies to beef industry
Incalculable: Cost to future generations from climate damage