When the Grocery Store Is Gone, Who Vouches for Your Beef?

Direct-to-consumer food is coming. Nobody has built the thing that makes quality claims believable.

When the Grocery Store Is Gone, Who Vouches for Your Beef?

Direct-to-consumer food is coming. Nobody has built the thing that makes quality claims believable.

Joel Salatin is right that the grocery store is dying. He is wrong about what replaces it. And the problem nobody in the food technology business wants to discuss was solved three thousand years ago by a man standing in a slaughterhouse.

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Joel Salatin gave the dinner address at the Brownstone gathering at Polyface last week. Jill and I had spoken earlier that day, out on the farm. His argument was that the grocery store is on its way out, particularly in the cities, and that within a generation urban households will have much of their food delivered directly to their homes. If that happens, he believes it could create a significant new market for homesteaders and small farmers who can ship their products through parcel carriers.

He may be right about the larger trend. But the system he described is unlikely to work as proposed. The reasons why are worth examining, because they point to a much larger problem with how we produce, regulate, transport and sell food in America.

Why Joel Is Right

USDA’s own accounting puts the farm share of the retail food dollar in the mid-teens (USDA Economic Research Service, Food Dollar Series). Everything above that fifteen cents belongs to somebody who did not raise the animal. Processing takes a cut. Distribution takes a cut. Shelf space takes the largest cut of all, and the store extracts it for the service of being conveniently located.

Sell direct and you capture most of what those middlemen were taking. That arithmetic is the whole case for direct marketing, and it is a strong one. Every farmer who has sold a quarter beef to a neighbor already understands it better than any economist can explain it.

Joel’s stronger argument had nothing to do with margin. The cost of buying groceries in a city is no longer mostly the price on the shelf.

Count what a household in a large city now spends to fill a cart. Time sitting in traffic. Parking, where parking exists. A transit trip that is tolerable going and miserable coming back with four bags. A reasonable calculation about the walk to the car after dark. Stores that have cut their hours, locked the razor blades and the baby formula behind plastic, or closed the location outright and left a neighborhood with no full grocery inside of a mile. None of that appears in the price of ground beef. The shopper pays every bit of it anyway.

Carl Menger, the nineteenth-century Austrian economist and one of the founders of the Austrian School of economics, settled this in 1871. Value is not a property sitting inside a good. It is a judgment made by a particular person in a particular situation. The real price of a chuck roast includes the ninety minutes and the low-grade dread it costs to go get one. Raise those enough and delivery wins outright, without the delivered food ever becoming cheaper.

This is not a forecast. It has already happened. DoorDash, Uber Eats, Grubhub, Instacart, and Amazon’s Whole Foods operation are now an ordinary way for urban households to acquire food rather than an occasional convenience, and the shift has held every year since the lockdowns ended.

Joel drew the natural conclusion. If the grocery store is being cut out, the farm can step into the space it leaves. But look at who is already standing in that space. These companies are intermediaries. They take a commission from the seller, charge fees to the buyer and, in many cases, mark up individual grocery items above the price on the store shelf. The city shopper may bypass the grocery store, but not the middleman. Instead, a new middleman controls the transaction and, more importantly, the relationship with the customer, including the customer’s address, purchases and preferences. Amazon did not compete with Whole Foods. It bought it.

The demand half of Joel’s thesis is correct and visible from your kitchen table. The supply half, where a farm in Madison County fills that demand directly, is where the trouble starts.

The Two Hundred and Fifty Acres We Did Not Buy

Jill and I spent time this summer looking at two hundred and fifty acres nearby in Madison County and running the numbers on a fifty-head cow-calf operation. We decided against it.

The opportunity seemed obvious, which is why we took it seriously, and a great many of you are looking at the same opportunity. The national cattle herd sits near a seventy-five-year low. Retail beef has set records. Four companies, two of them foreign-owned, buy roughly eighty-five percent of the steers and heifers sold in this country, which in much of the country leaves a rancher with two or three bidders and very little leverage. A supply chain under that much strain is precisely where a small producer selling direct ought to be able to find room, and every conference in the country is telling him so.

Some of you may find that odd coming from people who write about homesteading. It is the reason you should keep reading. We are not selling you a course or a piece of software. We looked hard at the model being promoted to small producers right now, and we concluded that we are more useful thinking about where this is going than we would be running fifty pairs on Piedmont grass. What follows is what we found.

The Physics of the Last Mile

Congress can repeal a statute. A governor can sign an agreement. Nobody repeals thermodynamics, and that is why refrigeration is the hardest part of this and the part least discussed by the people promoting it.

Frozen beef holds its quality at zero degrees Fahrenheit and starts losing it above that. To keep a box there for two days in transit, you need insulation, and you need either gel packs, which are heavy and not very cold, or dry ice, which is cold and does not stay. Dry ice sublimates. The working rule is five to ten pounds gone every twenty-four hours, more in an under-insulated cooler and more again in August. You are buying refrigeration by the pound and watching it evaporate.

Everything about parcel pricing then works against you. Carriers bill by weight and by zone. Your cooler, your coolant, and your packaging are billable weight that nobody eats. Zone charges climb with distance, so Arlington is affordable from Madison County and Denver is a different business entirely. Two-day ground reaches a few hundred miles. Past that, you are buying air freight to move a frozen box, which is as expensive as it sounds. You also cannot ship into a weekend, because no frozen carton survives a Sunday in a sorting facility. That collapses your shipping week to a few days and hands you an inventory problem on top of a freight problem.

Do not take my figures or anyone else’s. Call your carrier, price a ten-pound insulated box to a city you want to sell into, add the dry ice and the cooler, and set that number beside your margin per pound. Then price the same box in July.

The size of that number is the least of it.

It is charged per box rather than per pound. A shipment costs roughly the same whether it holds eight pounds of beef or thirty, which means your cost per pound falls as the order grows. That is why every company in this business pushes large minimum orders and subscriptions, and why nobody ships a single ribeye. The economics do not permit the small transaction that direct marketing is supposed to make possible.

And the failure mode is total. A dented can of tomatoes is still worth something. A box that arrives at forty degrees is a full refund, a lost customer, and an animal you cannot sell twice. There is no partial credit anywhere in this, and the losses land on the producer.

Put those two together and you have the reason the aggregator keeps reappearing no matter how many times somebody announces its death. A fixed cost per shipment selects for whoever ships the most, every time, with no help from lobbyists and no conspiracy required. The grocery store was never only a building. It was the answer to the problem of moving cold food to a lot of people at once, and it was a good answer. Kill it and the same physics rebuilds something in its place, and that something will be owned by whoever can absorb the fixed cost. Remember this when you reach the fourth of the seven tests at the end of this essay, because it is the same test.

That does not leave the small producer with nothing. It leaves two ways around the problem rather than through it, and Joel found the first one himself long before he described the second one at dinner. Polyface built metro drop points and buying clubs, where one truck serves many households at a single stop on a fixed day. That consolidates the last mile, which is what the grocery store did, while the farm keeps the customer list, which is what the grocery store never allowed. It is regional rather than national, and it works right now.

The second route is to stop shipping cold things. Tallow, jerky, summer sausage, bone broth, cured products, and rendered fat can move at room temperature in a light box at ordinary parcel rates. They also happen to be among the highest-margin uses of the parts of the animal that are hardest to sell as cuts. A producer who cannot economically mail a chuck roast to Denver can mail tallow to Denver all day long. The direct-to-consumer opportunity that survives contact with the freight bill is largely a value-added opportunity, and almost nobody selling you software on this subject will mention it.

The Walls We Built Ourselves

Physics is not the only obstacle. The next ones were created by government and by the structure of the market, which means that, unlike thermodynamics, at least some of them can be changed.

Federal statute is the most obvious, and Joel has been fighting it for forty years. Under the Federal Meat Inspection Act, as amended by the Wholesome Meat Act of 1967, you may slaughter and process your own animals for your household, your nonpaying guests, and your employees. You may use a custom-exempt facility. The meat comes back marked Not for Sale, and that marking is not a suggestion. Commercial sale requires inspection.

The PRIME Act would loosen this, but its full name tells you how far: Processing Revival and Intrastate Meat Exemption. Read it carefully before you celebrate. Both the House bill and the Senate companion address distribution within the state. Neither one lets you ship a lamb to New Jersey. The pilot folded into the House-passed farm bill is also intrastate, and it requires the label to disclose that the meat was not federally inspected. Whatever your view of that disclosure, the nationwide shipping vision Joel described is not on the table in any bill currently moving.

The other wall does not look like a wall at all. It is ownership of the customer.

The grocery store traditionally controlled the point of sale. Direct marketing was supposed to put that relationship back in the farmer's hands. But if the farmer reaches the customer through a digital platform, the platform can simply take the grocery store’s place. Sell through Amazon and Amazon controls the search ranking, collects the referral fee, sets many of the terms of the transaction, and learns an enormous amount about the buyer. The farmer may recover some of the margin once taken by the grocer, only to surrender part of it to the platform.

That distinction matters. Selling directly to a consumer is not the same thing as owning the relationship with that consumer. If someone else controls how the customer finds you, what it costs you to reach him, and whether you can reach him again tomorrow, you have not eliminated the intermediary. You have changed intermediaries.

Richmond, Virginia

There is a federal program almost nobody in Virginia agriculture talks about, and it has been sitting there since the Bush administration.

Congress created the Cooperative Interstate Shipment program in the 2008 Farm Bill. The idea is remarkably simple. A qualifying small meat processor operating under a state inspection system can meet federal standards and then sell its products across state lines under the USDA mark. The federal government even pays sixty percent of eligible inspection costs.

Virginia already has most of what it needs. The Commonwealth has its own meat inspection program, its own inspectors, and state-inspected slaughter and processing plants. What it does not have is an agreement with USDA allowing those qualifying plants to participate.

Virginia has never signed one.

Georgia joined in July and became only the eleventh participating state. Twenty-nine states operate their own qualifying meat inspection programs, yet after fourteen years only eleven have joined CIS. There is not a single participating state in the mid-Atlantic.

Consider what that means from a farm in Madison County. The richest concentration of potential food customers in the country runs almost continuously from Richmond through Washington and Philadelphia to New York. A Virginia producer using a state-inspected plant can sell within Virginia but cannot simply follow those customers across the state line. Joel’s urban delivery future can reach Northern Virginia and then stop at the Potomac.

That boundary is not imposed by thermodynamics, and Congress has already provided a way around it. Virginia simply has not used it.

The contrast with the way government normally approaches agricultural development is striking. Governor Abigail Spanberger recently announced grants for animal processing, a creamery, a cannery, livestock marketing, and other agricultural infrastructure. Earlier this year, Virginia announced millions more for food-system infrastructure, with the stated goal of creating new markets and revenue for small and mid-sized producers.

There is nothing necessarily wrong with those investments. But we are spending public money helping producers increase capacity while leaving in place a government barrier that prevents some of those same producers from reaching customers outside Virginia.

And this is not really a Virginia story.

Twenty-nine states have inspection programs that potentially put them in a position to participate in CIS. Only eleven have done it. That means most eligible states have left a federally authorized route to interstate commerce largely unused while politicians across the country continue announcing grants, subsidies, loan programs, processing initiatives, and rural-development programs intended to help small farmers compete.

Before anyone reaches for a partisan explanation, look at the states that have joined and those that have not. Vermont and Maine participate. So do Montana and the Dakotas. Virginia has declined to participate under Kaine, McAuliffe, Northam, Youngkin, and now Spanberger. Five administrations, both parties, no action.

That may be the more important lesson. We keep trying to subsidize our way around barriers that government has the power to remove.

What Washington Promised on Friday

On Friday, August 28, the President posted on Truth Social that ranchers and farmers had always been a priority for him, that the four dominant meat processors amounted to a monopoly, and that he was authorizing legal documents to give farmers and ranchers the right to process their own food. He said it should move quickly.

The idea had surfaced two days earlier in an interview with Glenn Beck. Beck, who owns a ranch, told the President that the packers and the regulations were killing producers. The President called the proposal a very good idea and said he would look at it that day.

Agriculture Secretary Brooke Rollins followed Friday afternoon with promises of action beginning Monday. USDA would cut processing red tape, expand ranchers’ ability to sell across state lines, help small processors, address consolidation, improve labeling, and remove outdated guidance.

Representative Thomas Massie, who wrote the PRIME Act, responded within hours that the announcement was good, but that it needed to become law rather than an executive order. He is right, and he has been fighting for that law since 2015. The prohibition on commercial sale of uninspected meat is written into federal statute. A President can simplify regulations, rescind guidance, redirect money, and make better use of existing inspection programs. He cannot repeal an act of Congress with an executive order.

There was another problem with the timing. The week before the President’s post, the administration opened a three-hundred-thousand-metric-ton tariff-rate quota for imported lean beef trimmings, divided into three monthly installments beginning September 1. Cattlemen and a number of congressional Republicans objected because additional discounted imported beef puts pressure on the prices received by American producers.

So American ranchers heard two messages within days of each other. More foreign beef was coming into the country immediately, while Washington promised that relief for domestic producers was coming soon. The imported beef can clear customs this week. New slaughter and processing capacity takes years to build.

Then Monday came.

USDA called its package the Ranchers First Initiative. Strip away the acronyms and there are several potentially useful ideas in it. Ranchers will have a new way to insure some of the economic risk of retaining heifers to rebuild their herds. Some conservation money can now be used more flexibly to rebuild fences and water systems after disasters. USDA will support financing for independent processing capacity, try to direct more federal purchasing toward locally processed American beef, and create additional support for beginning and veteran farmers.

Some of that is worthwhile. The heifer provision addresses a real problem. A rancher who keeps a heifer gives up her slaughter value today in exchange for calves that will not arrive for years. With the national herd near historic lows, reducing some of that risk makes sense.

But now read Monday’s announcement for what is missing.

There is nothing that expands interstate sales.

On Friday, the Secretary specifically promised to expand ranchers’ ability to sell across state lines. On Monday, there was no expansion of the Cooperative Interstate Shipment program, no new participating states, no accelerated approval process, and no concrete action that allows a small state-inspected processor to reach customers across a state border.

There is also no identifiable removal of the processing regulations the administration described as red tape. The announcement says the administration is cutting red tape, but does not identify the rule being eliminated. The promised rescission of outdated guidance is not there. Neither is the promised action on faster food-safety data. Truth in labeling largely amounts to a reference to work already done.

Most importantly, there is nothing allowing farmers and ranchers to process their own animals for commercial sale, which was the specific proposal the President announced on Friday.

Massie said that would require Congress. Three days later, USDA effectively confirmed his point. The administration announced everything it could do administratively and left untouched the statutory prohibition that Congress would have to change.

There is also considerably less new money here than the announcement initially suggests. Most of the major spending programs cited by USDA had already been announced during the previous year. The significant new financing tool is a loan guarantee. That may help a processor borrow money, but it is not new processing capacity, and it certainly does not put a new slaughter plant on the ground Monday morning. That is the bait and switch that the language hides, and the farmer is the mark.

One sentence in USDA’s announcement deserves more attention than it will probably receive. The Department acknowledges recent processing-plant closures and argues that the resulting capacity could create an opportunity for American-owned independent processors and cooperatives.

Perhaps. But a closed processing plant is not independent processing capacity. Someone has to buy it, finance it, staff it, obtain the necessary approvals, and reopen it. Calling a closure an opportunity does not accomplish any of those things.

And while all of this was being announced, the first tranche of the new tariff-rate quota for imported lean beef opened on September 1. The administration’s announcement about putting American ranchers first does not mention it.

There is another political problem. Major cattlemen’s organizations have opposed the President’s proposal to loosen on-farm processing requirements, arguing that food-safety inspection should not be treated as unnecessary red tape. Whatever you think of that argument, it means the President’s most consequential proposal already faces opposition from organizations claiming to represent the producers it is supposed to help.

So the tally is fairly simple. The heifer insurance provision is real and potentially useful. Greater federal purchasing of locally processed American beef could matter if it is actually reflected in contracts. There are some useful changes involving conservation and financing. But much of the rest consists of programs already announced, a new office, and promises that have not yet become policy.

The central promises made Friday remain promises.

And for the small producer we have been following through this essay, remarkably little has changed. The freight bill is the same. The federal inspection requirement is the same. The platform still owns the customer. And a farm in Madison County still cannot sell state-inspected meat across the Potomac because Virginia has not joined an interstate program that has been available for fourteen years.

What You Cannot Taste

Suppose every barrier to farm sales of beef were removed tomorrow. Suppose Richmond signs, Congress passes PRIME, and the carriers cut their rates. You still face the problem that makes direct marketing hard, and it is older than any of this.

You can taste tenderness. You cannot taste whether that calf got antibiotics in March.

Economists have a name for this distinction. Some qualities you can judge before you buy. Others, like flavor and tenderness, you discover when you eat the product. But there is a third category that matters enormously to small farmers: qualities the customer cannot verify even after the food has been eaten. Economists call these credence attributes, because ultimately the customer has to believe you.

Now sort the claims on a package of premium beef. Flavor and tenderness can eventually be judged by the customer. Grass-fed, no antibiotics, pasture-raised, truly organic, rotationally grazed, particular feeding practices, and most regenerative claims cannot. Nobody can taste them in a steak.

And those are precisely the claims for which the producer expects to be paid a premium.

A customer in Arlington does not pay eighteen dollars a pound simply because the package contains beef. She pays it because she believes something about how that animal lived, what it ate, what drugs it did or did not receive, and how the land beneath it was managed. Unless someone verifies those claims for her, she is buying the farmer’s word along with the steak.

That creates a problem for the honest farmer.

Economist George Akerlof described the basic mechanism in his famous 1970 paper on the market for “lemons,” work that later helped earn him a Nobel Prize. When buyers cannot reliably distinguish the good product from the bad one, they become unwilling to pay the full price of the good one. The dishonest seller can make the same claims without bearing the cost of keeping them. The honest producer either accepts a lower return, leaves the market, or eventually starts cutting corners himself.

The problem for the honest producer is simple: doing it right costs more, while claiming you did it right costs nothing.

The Reviews Will Not Save You

The standard answer to the trust problem is customer ratings. They fail for two different reasons.

The first is obvious once you think about it. A reviewer knows no more about how your cattle were raised than the person reading the review. A five-star review saying that you can really taste that the beef is grass-fed tells you that the customer liked the steak. It does not verify that the animal was grass-fed. Ten thousand reviews cannot establish a fact that none of the reviewers was in a position to observe.

The second problem is that the reviews themselves cannot necessarily be trusted.

Researchers who gained access to private Facebook groups where Amazon sellers purchased fake reviews were able to follow what happened afterward. Buying reviews worked. Ratings rose, review counts increased, and sales followed. Amazon eventually detected and removed many of the fraudulent reviews, but often only after the seller had already received the benefit. The researchers also found that the sellers buying reviews tended to be selling worse products. Once the manipulation stopped, ratings fell and one-star reviews increased.

More recent research has identified the larger consequence. Fake reviews do more than mislead someone about one product. Once customers understand that ratings can be manipulated, they begin to distrust the rating system itself. The fraud committed by the dishonest seller therefore damages the honest seller as well.

That brings us straight back to the problem of the farmer selling on trust. Reviews are reasonably good at answering Did you like the steak? They are almost useless at answering Did this animal live the way the farmer says it did?

A platform adds another problem: control over provenance. On large marketplaces, the listing, seller, fulfillment system, and physical product can become separated. Amazon historically commingled identical inventory from multiple sellers in some parts of its fulfillment system, meaning that the physical unit reaching a customer did not necessarily come from the seller whose inventory entered the warehouse. Even where inventory is kept separate, the review generally belongs to the product listing rather than documenting the history of the particular object that arrived at the customer’s door.

For ordinary commodities, that distinction may not matter very much. For food sold at a premium because of its provenance, it matters enormously.

The farmer is not really selling a steak. The farmer is selling a steak and a history of that steak. If the system cannot preserve and verify that history from the pasture to the customer, the thing that justifies the premium disappears.

You Cannot Fix a Lie by Carving It in Stone

Which brings us to the blockchain proposals, and to the conversations Jill and I have been having with people building them.

A distributed ledger can prove that a record has not been altered. It cannot prove that the record was true when someone entered it. If a producer or broker enters grass-fed, no antibiotics, the blockchain can preserve those words perfectly and forever, whether or not the animal ever saw a pasture.

This is known as the oracle problem: at some point, information from the physical world has to enter the digital system, and the computer has no independent way of knowing whether that information is true.

Blockchain can be extremely useful for traceability. Walmart famously demonstrated that food which once took days to trace through a supply chain could be traced in seconds. During an outbreak, that matters enormously. But tracing a claim is not the same thing as verifying it.

Economist Michael Spence gave us a useful way to think about this in 1973. A signal conveys useful information when it is harder or more costly for the dishonest person to produce than for the honest one.

Run that test on blockchain. Is typing grass-fed into a ledger more difficult for the farmer whose cattle ate grass than for the farmer whose cattle did not? No. It costs both of them essentially the same. The cryptography can secure the record, but it cannot secure the truth of the claim.

An honest producer and a dishonest one can enter the same claim into a computer. The difference appears only when someone checks whether the claim is true.

Now run the same test on things that actually verify claims. An unannounced inspection is easy for the farm doing what it says and dangerous for the one that is not. Random laboratory testing imposes little expected cost on the honest producer and potentially enormous cost on the fraud. Both work because they reach outside the information system and back into the physical world.

Laboratory testing can already tell us considerably more than most consumers realize. Stable-isotope analysis can detect chemical signatures left in an animal’s tissues by what it ate and where it lived. In some circumstances, laboratories can distinguish a forage-heavy diet from a corn-heavy one and identify geographic patterns that would be extremely difficult to fake with a label. Similar techniques are already used in food-authenticity work.

But the technology has limits. Biology is messy. A conventionally raised animal eating mostly grass can resemble an organic animal, while an organic animal fed substantial grain can produce a different signature. Newer methods have improved the ability to distinguish production systems, but they still do not provide perfect reconstruction of an animal’s life.

They do not need to.

Verification does not require testing every steak. It requires auditing enough of the claims to make fraud expensive.

Random testing that detects most violations, combined with unannounced inspections and penalties large enough to matter, changes the economics of lying. The honest producer has little to fear from an unexpected inspection or laboratory test. The dishonest producer has to operate knowing that any animal, shipment, or claim could be checked.

That is the problem that the blockchain proposals miss. The problem is not creating a permanent record of what the farmer said. The problem is making it expensive for the farmer to lie.

An Alternate Solution: The Kosher Certification Model

Here is the part that surprised Jill and me.

The problem described above has already been solved: a quality the buyer cannot personally verify, sold at a premium across great distances to people who may never see where the product was made. No blockchain was required.

Kosher certification has been doing it for generations, and its marks now appear on an enormous share of packaged food sold in American grocery stores.

The system begins with a person.

A mashgiach is a trained supervisor responsible for making sure that a facility complies with the requirements of the certifying organization. Depending on the product and the risk, supervision may be continuous or involve inspections, including unannounced visits. The important point is that the supervisor’s accountability runs to the certifying system, not merely to the producer whose claims are being verified.

Kosher slaughter goes further. The shochet, the person performing the slaughter, is specially trained and accountable for doing the work correctly. Verification is therefore not simply an inspection performed after the fact. It is built into the process itself, and the standing of the person performing the work depends upon maintaining the standard.

The same model already exists in another market built almost entirely on credence claims: dietary supplements. A consumer cannot look at a capsule and determine whether it contains the stated amount of an ingredient, whether it is contaminated with heavy metals, or whether the contents match the label at all. Independent organizations such as USP and NSF test products and manufacturing systems against defined standards and allow products that meet them to carry their mark of certification (third-party testing). The manufacturer pays for certification, but the value of the certification depends on the reputation of the organization whose mark appears on the bottle. The consumer is not being asked simply to trust the supplement company. A third party with its own reputation at stake is standing behind specific claims about what is in the product.

Compare that with the modern regulatory model. The person doing the work is an employee of the processor, while government pays an inspector to verify that the work complies with federal requirements. Kosher certification developed a different system: qualification and accountability are embedded much closer to the work itself.

But the most interesting part has little to do with slaughter.

Kosher certification and dietary supplements certification have many competing certifying organizations, and the producer seeking certification generally pays for it. That arrangement should create an obvious problem. If the producer pays the auditor, and customers cannot distinguish a rigorous auditor from a permissive one, producers have an incentive to choose the easiest certification available. The weakest certifier should win on price, and standards should gradually fall.

That problem is hardly theoretical. The issuer-pays model contributed to spectacular failures among credit-rating agencies before the 2008 financial crisis.

Yet kosher certification developed differently. Different certifying organizations acquired reputations for different levels of rigor, and consumers who care about those differences, learn the names and marks.

The reason is remarkably simple. The certification mark identifies the certifier.

An OU does not merely say kosher. It identifies the Orthodox Union as the organization standing behind the certification. Other certifiers put their own names and reputations behind theirs. The consumer therefore does not have to evaluate an abstract claim made by the food company. The consumer can evaluate the organization willing to put its reputation behind that claim.

That changes the incentives. A certifier that becomes known for approving products it should reject damages the value of its own mark. A rigorous certifier can build a reputation precisely because it refuses certification when the standard is not met.

The product may travel a thousand miles from the person who made it. The buyer may never visit the plant. Neither needs to know the other. Trust travels with the mark because a named institution has put its own reputation behind it.

What Spain Did About a Pig in the Woods

Joel runs hogs in the woods at Polyface, fattening them on what falls from the canopy. Consider what the customer is actually buying with that claim. The pork may taste different, but the person eating it cannot determine from the pork chop whether the pig actually lived in the woods and fattened on what grew there. That part is a credence attribute, and it accounts for much of the value of the product.

Spain has been dealing with almost exactly that problem, with the same animal, for generations. The result is some of the most valuable pork in the world.

Spanish law protects the highest designation, de bellota, for Iberian pigs finished during the montanera, the season when the animals roam the dehesa woodlands feeding primarily on acorns and pasture. The rules govern how the pigs are raised, what they eat, how long they remain in the finishing system, and how they are identified. Pork produced under other systems can still be sold, but it must be sold under different names. The customer can therefore distinguish the animal finished on acorns in the woodland from one raised outdoors with supplemental feed or one raised conventionally.

The important part is how Spain verifies the claim.

Inspection begins with the land. Before pigs are turned out for the season, independent inspectors assess whether a particular piece of woodland can actually support the number of animals the producer intends to finish there. The land itself must qualify for the system. The number of pigs is tied to the carrying capacity of the ground.

That is a very different form of verification from asking the producer afterward whether the pigs ate acorns. The claim is tied to something physical that can be inspected before the product exists.

Spain protects the language as well. Terms associated with the traditional production system are reserved for products that actually qualify for them. Even imagery that could lead a consumer to believe that ordinary pork came from the protected system is restricted. Pata negra, the famous term associated with the highest grade of Iberian ham, cannot simply be attached to whatever product a marketer would like to sell at a premium.

Compare that with the language surrounding American premium food. Regenerative. Pasture raised. All natural. Farm fresh. Some of these terms have limited regulatory definitions in particular contexts; others are vague, inconsistently defined, privately defined, or largely marketing language. And pastoral imagery can do much of the work without making a specific claim at all. A red barn, green pasture, split-rail fence, and grazing animal can imply a production system that the words on the package never actually promise.

Spain approached the problem from the opposite direction. It did not merely create a premium label and ask consumers to trust it. It defined what the premium claim means, tied that claim to observable conditions on the farm, required independent verification, and prevented everyone else from borrowing the language and imagery that give the claim its value.

That is how a pig in the woods becomes a product worth protecting rather than a marketing story anyone can print on a package.

Where the Organic Seal Went Wrong

Now look at the green USDA Organic seal in that light.

One standard. One meaning. The accredited certifying agent who did the actual work is effectively invisible to the shopper. She cannot distinguish a demanding certifier from a permissive one, which means no certifier can earn anything by being demanding.

That is why organic drifted to hydroponic berries and confinement dairy, and it was not an enforcement failure. It was a design error, made at the beginning, and it followed necessarily from hiding the name of the party doing the vouching.

There is a deeper problem underneath this that Friedrich Hayek identified in 1945 and that farmers understand instinctively. Knowledge about a farm is local. Soil, water, pasture, animals, weather, insects, disease pressure, rotations, and a thousand other things vary from one piece of ground to another. Much of what a good farmer knows from living on that ground cannot be reduced neatly to a form. Berries grown in water under a lamp satisfy every box on the organic form, and that is precisely the point.

When someone offers to solve your trust problem with a new standard, a new seal, or a new ledger, ask two questions. Whose name is on it, and what does he lose if he is wrong.

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What the Courts Worked Out

States spent most of a century trying to enforce kosher standards directly, and the courts eventually stopped them. New Jersey’s regulations fell in Ran-Dav’s County Kosher in 1992. Baltimore’s ordinance fell in Barghout in 1995. New York’s statutes fell in Commack Self-Service Kosher Meats v. Weiss in 2002. The reasoning was essentially the same. Enforcing the standard required the state to resolve questions on which the certifying authorities themselves disagreed, which the First Amendment forbids.

But look at what the courts said was still permissible. Stopping a vendor from claiming that a particular authority endorsed a product when it did not requires no interpretation of doctrine at all. That is ordinary fraud. New York rebuilt its law on that basis, requiring disclosure of who certifies and under what standard, and when the new regime was challenged, the Second Circuit upheld it in 2012.

Transfer that to beef and the policy almost writes itself. Government does not define grass finished. Government requires the producer to disclose who attests to the claim and under what published standard, and then prosecutes false claims about that attestation. The standards stay private, plural, and competitive. The state supplies the fraud remedy and nothing else.

That is the inverse of what is being built now. The FDA’s Food Traceability Rule specifies the data elements and tracking events, requires records producible within twenty-four hours, and says nothing about whether the claims attached to the food are true. Compliance costs under such a regime are close to fixed per business, which means they fall hardest per pound on the smallest producer. The rule was set for January 2026. FDA proposed a thirty-month extension in August 2025, and Congress made it binding in the November 2025 continuing appropriations act, directing no enforcement before July 20, 2028. Ask who lobbied for that delay and got it. The Food Industry Association and the National Grocers Association, not the Virginia farmer selling pastured broilers and turkeys, woodland-raised hogs, and grass-fed beef by the quarter.

There is until July 2028 to replace a traceability system that burdens small producers with one that actually verifies the claims consumers are paying for.

Seven Tests

We cannot tell anyone exactly what to build or what will ultimately work. Neither can the government. The solution will have to emerge through trial and error, with competing systems tested and selected in the free market. But it is possible to identify what an honest system must do to survive, and every proposal can be measured against these seven tests.

1. Does the record tie to the animal, or only to the paperwork? Hair and tissue keep. A tag falls off in the brush, and a lot number gets retyped by whoever is closest to the keyboard.

2. Whose name is on the claim, and what does he lose if it is false? An anonymous assertion is worth what was paid for it.

3. Can the producer use the shipping system without surrendering the customer list? If the answer is no, the producer has merely changed landlords.

4. Does it cost by the head or by the year? If it is priced by the year, it selects for scale and will bury the small producer. Priced by the head, it treats a twenty-cow operation the same as a twenty-thousand-cow operation.

5. Does anyone ever check, at random, without warning? Continuous surveillance is unaffordable and unnecessary. Occasional unannounced checking is neither.

6. What happens to a cheat when he is caught? If the answer is a stern letter, the system is merely an expensive way of recording what people say about themselves.

7. Can a woman in Arlington understand it in four seconds, standing up, holding a phone? If not, it is another seal nobody reads.

We know of nothing currently fielded or in development that passes all seven. Most of the ventures raising money right now fail the fourth test badly, which is why they end up selling enterprise software to large processors while describing themselves as friends of the family farm.

Let the Market Find It

We are not going to name the solution. That refusal is the point, not a dodge.

Carl Menger explained how money emerged without anyone designing it. Traders individually preferred goods that were easier to trade, and over time those choices produced a medium of exchange that no committee had specified. Hayek later called competition a discovery procedure: what competition discovers cannot be known beforehand, or there would be nothing to discover.

Every blockchain provenance consortium now working starts from the opposite direction. A committee designs the standard, specifies the fields, and expects the market to follow. That is central planning dressed as a market. The knowledge needed to write the specification is scattered among ten thousand people who were never invited to the meeting.

Whatever works will be discovered by producers and buyers doing business, and it will probably look more like a man standing in a plant than a distributed ledger. Our contribution is the seven tests above, and they are falsifiable.

There is one thing that can be done now. In Virginia, producers and consumers should write their delegate and state senator and ask a single question: Why has Virginia never signed a Cooperative Interstate Shipment agreement?

Virginia is not alone. Eighteen states with their own qualifying meat inspection programs have not joined CIS: Alabama, Arizona, Arkansas, Delaware, Illinois, Kansas, Louisiana, Minnesota, Mississippi, North Carolina, Oklahoma, Oregon, South Carolina, Texas, Utah, Virginia, West Virginia, and Wyoming. If one of those is home, the question for the governor, agriculture commissioner, state senator, and delegate or representative is the same: Why has this state not joined the Cooperative Interstate Shipment program? These states already operate inspection programs required to meet standards at least equal to the federal system. The missing step is opening the interstate market to qualifying small processors. When writing, please link to this article or quote from it so that legislators understand both the question and the larger problem behind it.

Residents of other eligible states that have not joined CIS should ask the same question. The program is fourteen years old, the federal government pays sixty percent of eligible inspection costs, and eleven states have already joined. Meanwhile, Virginia hands out thirty-six-thousand-dollar equipment grants to farmers it prevents from selling state-inspected meat across the Potomac.

Ask the question in writing. And ask for the answer in writing.

RWM/JGM

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