Economics in the News – July 17-23, 2023
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o Switzerland is nearly synonymous with cheese. The average person in the Swiss population consumes more than 50 pounds per year compared to 40 pounds per year per person in the United States. However, the Swiss trade balance has shifted and has been shrinking, with Switzerland exporting 40 percent of the cheese it produces.
However, this year, Switzerland has imported more cheese by weight than it has sold abroad. According to Swissmilk, that’s due to the Swiss developing a taste for foreign cheeses, with consumption of local products decreasing from 77 percent consumption in 2007 to 64 percent last year. In addition, the number of dairy farmers in Switzerland has dwindled by more than half over the last 25 years with many of those farms maintaining a small operation. Industry experts maintain that Swiss producers have become more specialized in recent years with cheeses that are exported being high-value varieties. [The New York Times]
o A tornado in Rocky Mount, N.C., caused extensive damage to a Pfizer drug manufacturing site. The tornado occurred at approximately 12:30 p.m., on Wednesday, July 19, with wind speeds up to 150 miles per hour, according to the National Weather Service. Sixteen people were injured, but no deaths have been recorded.
The impact threatens critical supplies for hospitals across the country. Pfizer estimates that one-fourth of its injectable medications that are supplied to US hospitals were made in Rocky Mount, including drugs used for surgeries and others to relieve pain. Pfizer has yet to comment on the severity of the impact, but existing national drug shortages that have reached a 10-year high in recent months could be exasperated. [The New York Times]
o The film and TV industry is at a standstill with Hollywood actors and writers battling over the impact that streaming has had over the economics of entertainment. The work stoppage could be prolonged and could severely impact the fall TV lineup. The entertainment industry is still recovering from the changing demand in consumer habits during the COVID-19 pandemic. Movie theaters have yet to recover from pre-pandemic levels, with box offices down 20-25 percent nationwide.
The pandemic brought a surge in streaming options, as companies rushed to craft their Netflix competitor with subscriber growth taking top priority. At the same time, streaming has led to the steady demise of traditional TV and its ad-based revenue. The last time actors and writers struck simultaneously was in the 1960 to establish royalty and residual payments for replays of films and TV shows. But as streaming has taken shape, so have the residuals due, in part, to the closely guarded audience numbers. [Associated Press]
o Residents in Phoenix are trying to stay cool amid record-setting heat in July. The city in the Valley of the Sun is on pace to become the first major US city to average a monthly temperature greater than 100 degrees. Through July 20, the average high in Phoenix is 114.4 degrees, while the average low is 90.4 degrees, giving it a scorching 102.3 degrees monthly average. This July is approximately 3.3 degrees hotter than the previous hottest month on record.
Only a handful of smaller US-based cities have reached the 100-degree mark for a monthly average, including a record average of 108.1 degrees in Death Valley, Calif., in July 2018. Phoenix has surpassed its prior record of 18 days in a row with highs of 110 degrees or hotter. The lack of cooling has an impact on humans and animals outdoors unable to get a reprieve from the heat and makes air-conditioning a basic need for survival. [The Washington Post]
o Why are unhealthy food options much more affordable than healthy options? Blame the Farm Bill. Congress originally passed the Farm Bill after World War II to meet the needs of the US population and an evolving export market. It is invested in monocrops used to feed animals on industrialized farms, subsidizing the overproduction of fat-laden animal products and highly-processed foods that make unhealthy foods inexpensive and accessible to the masses.
The unhealthy food options play a critical role to explain the rise of heart disease and other chronic diet-related illnesses. Nine out of 10 US adults do not consume nutritionists’ recommended fruits and vegetables. The issue is even worse in lower-income communities where fresh produce is often scarce. The Farm Bill comes due for legislation renewal every five years and is due for renewal in 2023 with a projected $700 billion of funds to be directed to the agricultural industry. [FORTUNE]