Category: Food and Drink

The bullish case for Brazil

From Drew Crawford:

Start with the most important number in economics, even though no one on Wall Street talks about it: calories per acre. Human civilization runs on food. Ten billion people will inhabit this planet by 2050. The amount of arable land is not growing. It is shrinking, every year, to urbanization, desertification, salinization, and topsoil erosion. The countries that can grow food at scale will be the most strategically valuable territories on earth. The countries with the best apps and the most PhDs will depend on the countries with the best dirt.

Brazil has more unused arable land than any country on earth. That sentence alone should stop every allocator in their tracks. It means that Brazil can approximately double its total cultivated area, without touching a single hectare of the Amazon, simply by converting degraded pasturelands in the Cerrado and other biomes into productive cropland using technology that already exists.

No other agricultural superpower has this headroom. The United States is fully utilized. China is losing farmland to urbanization at a rate that should terrify its central planners. India’s agricultural productivity gains are hitting diminishing returns against water stress and soil degradation. Europe is hemmed in by geography and regulation. Sub-Saharan Africa has theoretical potential, but lacks the roads, the ports, the legal frameworks, and the capital to exploit it within a generation.

Brazil is already the world’s largest net food exporter. It leads the world in soybeans, coffee, sugar, orange juice, beef, and poultry. It is the second-largest exporter of corn, pork, and ethanol, and recently surpassed the United States as the largest cotton exporter. Agribusiness generates approximately 25% of GDP and more than 40% of export revenue. And the agricultural sector has been growing productivity at 3-4% per year for two decades straight, driven by Embrapa’s tropical soil science, satellite-guided precision agriculture, and the industrialization of protein supply chains that stretch from feedlots in Mato Grosso to dinner tables in Shanghai.

A single farm in Mato Grosso can be more than twice the size of the state of Rhode Island. A literal fact. The Bom Futuro Group cultivates more than 700,000 hectares (roughly 2,700 square miles) of soybeans, corn, and cotton across 35 production units. This is farming at a scale that American and European investors cannot easily conceptualize, operating with GPS-guided machinery, drone monitoring, and soil analytics that rival anything in Iowa, but across an area that dwarfs it.

The post is interesting throughout and offers further points of interest.

Sao Paulo notes

The old saw “Brazil is the country of the future, and always will be” now seems so wrong.  The place feels increasingly conservative, and it is aging rapidly.  In the domestic airport you see couples with only a single kid, not two or three kids, never mind four.

Country and Western music, in their Brazilian incarnations, are very popular.

It does not feel like the next Pelé will be coming from Brazil.

Sao Paulo as a city is much improved.  The murder rate has plummeted, and the nice neighborhoods are very nice and are growing in size.  The business community is strong, interesting architecture abounds, and there is a real arts scene.  It is arguably Latin America’s number one city, with only Mexico City as a rival.  It has, along with Mexico City, evolved into a “must know” global city, though it is rarely treated that way by outsiders.  In the three days I spent there, going around to many places, I did not see a single person who was evidently a foreign tourist.  That is crazy, but also a sign there is good value here.

Sao Paulo has food to die for.  It is top tier for Brazilian (of course), meat/steak, Japanese, and Italian, and pretty good in many other offerings as well.  I had a wonderful fifteen-course omikase for $110 at a Michelin star restaurant.  The establishment, Kan Suke, has only eight seats, but I could get a table by inquiring only an hour in advance.

For Italian food it is probably the second best country in the world?  For meats it might be number one, at least if you are willing to put aside the small country of Uruguay.  For beans it is top two, and the fruits are excellent as well.  Chocolate ice cream and gelato abound.  All constraints considered, I would rather spend a week dining out here than in London or Paris or Rome, or for that matter New York City.

People are very friendly, surprising few speak decent English, and Brazilian warmth still abounds.

I was very pleased with my stay at Hotel Unique, due to its architecture and also a perfect location.

Observers should be more optimistic about the Brazilian economy.  Yes it is overregulated and the government is locked into far too much spending.  But hyperinflation is now a distant memory, a reasonable fiscal consolidation occurred in the 1990s, and the country has plenty of its own energy.  Keep in mind that for emerging economies, years of negative growth are a major problem.  Brazil now has sidestepped most (not all!) of those risks.  Slow, steady growth should be able to get them somewhere, albeit at a langorous pace.

My biggest worry about Brazil is demographics and shrinking population.  In recent times TFR has been in the 1.3 to 1.4 range, hardly satisfactory.  A shrinking population is bad per se, and also it will hurt many regions of the country due to imperfect market integration, both nationally and globally.  More importantly, the country does not have an obvious and easy option for pulling in a higher number of desirable immigrants, at least not relative to its size.  There is Venezuela and Bolivia, but the former of those may go away as a major source of people.

Will Brazilian fertility tick back up?  Will Brazil re-attain its status as a highly influential culture on the world scene, as it was in the 1960s through early 1990s?  Unclear.  But if the question is “should you go visit?”, the answer is a definite yes.

Richard Feynman’s formula for the best holiday restaurant

According to Feynman’s approach, in this context, people should try a different restaurant each night until they find one that exceeds a particular threshold that reflects a desired quality.

In Feynman’s equations this threshold is not fixed. Instead it declines more and more rapidly as the number of days left in the city reduces. In other words, as the days go by there is increasingly less motivation to hunt for an amazing dining spot, because the time you will have to enjoy it has decreased.

“The thresholds are being guided by the best thing you might be able to find if you kept looking,” said Griffiths. “If you have a long time to look, finding something amazing has a lot of value because you can go back many times.”

Feynman’s approach assumed there is equal possibility of finding any restaurant within a fixed range of quality. However the researchers also explored other scenarios.

“We showed that if the distribution of restaurants varies, then the strategy you should follow will change too,” said Griffiths.

Here is the full story, and here is the PNAS article.  I think of that as a pretty pessimistic approach to the problem.  In most locales you should be able to find lots of very good restaurants, so if you find a quality place early on you do not return to it, rather you keep looking for more, in fact feeling emboldened by your early success.  Maybe this algorithm applies to Cuba?

Via both Adam K. and Mike Doherty.

What else is special about southeastern Michigan? (from my email)

Thanks for swinging by Southeastern Michigan. He are two things other things that this area continues to produce and export at scale that don’t get as much notice:

Mortgages – The two largest residential mortgage lenders are located in Detroit: United Wholesale Mortgage ($164B of mortgage originations for 2025) and Rocket Mortgages ($113B). It’s a fragmented industry, but to give you a sense of their comparative scale, Chase is #3 lender @ $66B in originations. Detroit continues to be the home of financial services for many Americans’ largest purchase.

Food – Michigan, not NY or Italy, is responsible for the scaling of pizza. Domino’s, Little Caesar’s, and Jet’s were all founded in Southeastern Michigan. Domino’s is the largest pizza company in the world, and in many global markets, Domino’s defines “pizza.” For instance, Domino’s market share of pizza in the UK is over 50%. So, the UK has adopted Michigan’s, not Italy’s, understanding of pizza.

One narrative for Michigan should be that it has continued to shape global culture, through scaled production of mortgages and pizza. It doesn’t get more American than cars + mortgages + pizza, does it?

That is from Jeff Withington.

My excellent Conversation with Bob Spitz

Here is the audio, video, and transcript.  Here is the episode summary:

Bob Spitz has written major biographies of the Beatles, Led Zeppelin, Bob Dylan, and now the Rolling Stones — but also, somehow, Ronald Reagan and Julia Child. In rock, his credentials were hard won: he started out hustling gigs for an unknown Bruce Springsteen for six years, moved on to handling Elton John’s American business, and spent long enough in the world to find himself jamming with Paul McCartney and chatting with Bob Dylan on a stoop in the Village. The Reagan and Julia Child books are harder to explain, and perhaps that’s the point—Spitz seems to do his best work when he has no business writing the book at all.

Tyler and Bob discuss how the Stones became so great so quickly, what they added to the blues, how their melodies stack up against the Beatles’, whether Exile on Main Street deserves its canonical status, which songs are most underrated, what Charlie Watts actually got out of playing in a rock band, the rise and fall of Brian Jones, how the Stones outlasted nearly everyone, the influence of Mick’s London School of Economics training, why popular music has lost its cultural influence, what we should still be asking Paul McCartney and Ringo Starr, whether the Beatles’ breakup was good for the world, how senile Reagan really was in his second term and whether he was ever truly a communist, how good a cook Julia Child actually was, his next book on Lennon’s second act, and much more.

Excerpt:

SPITZ: Mick, from a very early age, was an exercise freak.

As we know from my investigation in the book, Mick’s father was the Jack Lalanne of the United Kingdom. He had a television show, an exercise show like Richard Simmons, and he always had a great person to show off the exercises, young Michael. He would say, Mike, get down, show him 50 pushups. Mike, do 100 chins, and Mick would jump to it and do it. That man still has a 27-inch waist at the age of 83.

Keith, on the other hand, is a medical miracle.

And this:

COWEN: Mick once said his favorite economist was Friedrich A. Hayek. Do you know anything more about that?

SPITZ: I do not, actually. I think it’s incredible that Mick had favorite economists. We do know that Mick was a scholarship student to the London School of Economics, and that for two and a half years, he attended and got pretty good grades. He did fairly well. The one thing that amazes me about Mick coming out of that London School of Economics is this. After 1967, when Andrew Loog Oldham stopped managing the Stones, they have never had another manager. They’ve had some money managers, but as far as managers go, Mick Jagger was their manager.

And:

COWEN: How good a cook was Julia Child? That’s another of your biographies. Actually, how good was she?

SPITZ: She was great. She was a wonderful person, but here’s the little secret. Julia was a great cooking teacher, but not a very good cook. There were people who left her house—and John Updike told me this. He was a frequent guest with her. Corby Kummer, who was a wonderful food writer, told me this as well. They’d leave Julia’s house. They’d go to a little park around the corner, and they’d get physically ill. They’d get sick. Julia used too much butter, too much cream. She really had no reins on her when it came to using things like that.

Bob was excellent throughout, and I very much enjoyed his new biography of the Rolling Stones.

Korean banana markets in everything

Did you know Korea sells “one-a-day” banana packs?

Instead of every banana ripening at once, each one is at a different stage.

One is ready today.

The next one is ready tomorrow.

The last one is still spiritually in college, “experimenting.”

Simple. Genius. Solves the entire banana problem.

What do you think? Would you prefer your bananas this way?

Here is the tweet from Sovey.

Mushroom facts of the day

You would be surprised to learn that almost 69% of the US mushroom production occurs in the borough of Kennett Square, Pennsylvania. It is a small town of about 6000 people, but mushroom-growing facilities around town produce almost 451 million pounds of mushrooms annually (2024). 451 million pounds of mushrooms would occupy about 45 American football fields or 35 soccer fields. The dollar value of mushroom production in the US is roughly $ 1 billion per year.

China is the undisputed leader in mushroom production. China accounts for 93% of the world’s global mushroom production.

That is from Rhishi Pethe, here is the full story, via Anecdotal.  Much of the piece is about why mushroom production is switching to Canada.

Wow Nepal

Wow Nepal, 10728 Fairfax Blvd, Fairfax, VA, 703-880-9898, open 11-9 every day.

The “Wow” here is exactly right, as it is wonderful to have a new great restaurant around. Most Nepalese restaurants in America are variants on north Indian food with batches of half-hearted momos thrown in. This place is the real thing. The goat momos are among the best dishes in northern Virginia right now. The fish is excellent, everything else at least very good. Note that the place is small and fills up early, so arrive in time to get your seat.  Strongly recommended.

The Public Choice Outreach Conference!

The annual Public Choice Outreach Conference is a crash course in public choice. The conference is designed for undergraduates and graduates in a wide variety of fields. It’s entirely free. Indeed scholarships are available! The conference will be held Friday June12- Sunday June 14 , near Washington, DC in Reston, VA. Lots of great speakers including Tyler, myself, Bryan Caplan, Robin Hanson, Jon Klick, Shruti Rajagopalan and more.

Please apply and encourage your students to apply.

The CA Minimum Wage Increase: Summing Up

Two recent joint-papers Did California’s Fast Food Minimum Wage Reduce Employment? by Clemens, Edwards and Meer and The Effects of California’s $20 Fast Food Minimum Wage on Prices by Clemens, Edwards, Meer and Nguyen give what I think is a plausible and consistent account of California’s $20 fast food minimum wage.

California’s $20 fast food minimum wage raised wages in the sector by roughly 8 percent relative to the rest of the country but employment fell by 2.3 to 3.9 percent (depending on specification, median ~3.2%), translating to about 18,000 lost jobs. Food away from home (FAFH) prices in California’s four CPI-reporting MSAs rose 3.3–3.6 percent relative to 17 control MSAs. Falsification tests on Food at Home and All Items Less Food and Energy show zero differential movement—this is specific to restaurant prices.

What’s interesting is that the papers are independently estimated but the fit is consistent. The price paper uses Andreyeva et al.’s demand elasticity of -0.8 to convert the estimated price increases into an implied quantity declines: about 3.9–4.1 percent in limited-service and 1.7–1.8 percent in full-service. These align well with the employment declines of 3.2 and 2.1 percent estimated in the first paper.

The consistency tells us something about the mechanism. One thing we have learned about the minimum wage in recent years is that the pass-through effect is large and more of the employment decline is driven by pass through than by labor-capital substitution. In other words, prices rose, quantity demanded fell, and that’s what killed the jobs—not robots replacing workers. Not today, anyway.

In terms of welfare, the bulk of employed workers get an 8% wage increase, a small minority get disemployed. The big transfer was from consumers to workers. California has roughly 39 million residents, all of whom face 3.3–3.6% higher FAFH prices. The transfer is likely regressive — lower-income households spend a larger budget share on fast food specifically. So the policy effectively taxes low-income consumers generally to raise wages for a subset of low-income workers, while eliminating jobs for another subset. Your mileage may vary but I don’t see this as a big win for workers. We thought small increases in the minimum wage were absorbed–maybe some were or maybe they were just hard to estimate–but you can’t extrapolate the small  increases to big ones–the effect is non-linear. Big increases in the minimum wage start to bite.

As usual, when it comes to fast food there is no such thing as a free lunch.

Addendum: Clemens’s JEP paper continues to be the masterclass in how to think through minimum wage issues.

My excellent Conversation with Paul Gillingham

Here is the audio, video, and transcript.  Here is the episode summary:

Tyler calls Paul Gillingham’s new book, Mexico: A 500-Year History, the single best introduction to the country’s past—and one of the best nonfiction books of 2026. Paul brings both an outsider’s eye and ground-level knowledge to Mexican history, having grown up in Cork — a place he’d argue gave him an instinctive feel for fierce local autonomy and land hunger —earning his doctorate on the Mexican Revolution under Alan Knight at Oxford, and doing his fieldwork in the pueblos of Guerrero.

He and Tyler range across five centuries of Mexican history, from why Mexico held together after independence when every other post-colonial superstate collapsed, to why Yucatán is now one of the safest places on earth, what two leaders from Oaxaca tell us about Mexican politics, how Mexico avoided the military coups that plagued the rest of Latin America, what Cárdenas’s land reform actually achieved versus what it promised, whether the ejido system held Mexico back, why Mexico worried too much about land and not enough about human capital, how Mexico’s fertility rate fell below America’s, why Guerrero has been violent for two centuries, why the new judicial reforms are a disaster, where to find the best food in Mexico and Manhattan, what a cache of illicit Mexican silver sitting on a ship in the English Channel has to do with his next book, and more.

Excerpt:

COWEN: Now, after independence in 1821, why did not the rest of Mexico fragment the way Central America did a few years later, where it splits off from the Mexican empire? What determines the line? What sticks together with Mexico, and what does not?

GILLINGHAM: That’s a very good question because it’s one of the things that really makes Mexico stand out in that period, those histories, is that after independence, the rest of the Americas, you get a series of super-states. You get Gran Colombia, which is most of the Andes, and going across what’s now Venezuela. You get the United Provinces of the Rio Plate. These are huge, very difficult to conceive of super-states, and they fail within a decade. Elsewhere, you look at other post-colonial states, thinking particularly of India, within a couple of years, you’re fragmented and failed. Mexico doesn’t. Mexico actually stands up with the exceptions you put of Central America, which is formally part of it, in fact, but leaves within short order.

It’s one of these questions of what Álvaro Enrigue calls the miracle that Mexico exists. To explain it is a paradox. To make a try at it, I think that there is a common theme in Mexican history, which runs across most of those five centuries, which is a remarkable degree of hands-off government. It’s imposed. Mexico has a lot of mountains. It’s very difficult to rule from any central pole. Savvy governments, or governments with no choice, which are quite often the same thing, are very hands-off. Federalism is built into Mexico’s soul. I think that’s one of the reasons, from early on, Mexico actually out-punches the rest of the Americas in terms of sticking together as a territorial unit.

COWEN: As you know, in the early 19th century, there are rebellions in Yucatán, the Caste Wars, but Yucatán does not split off from Mexico. What keeps that together?

GILLINGHAM: Yucatán has always felt itself to be a different country, effectively, and that runs through to the present. You can see the cultural reasons, obviously, and the Maya and the other great, sophisticated urban culture of the 16th century and before. It makes sense that they should feel themselves very different from the rest of what becomes Mexico. In fact, it comes through in small but revealing ways. Back in the 20th century, people find themselves being asked whether they want a Yucatán beer or a foreign beer, and a foreign beer being anything in Mexico outside Yucatán.

Why doesn’t Yucatán leave? I think that it came extremely close. In fact, there’s a moment in the 1840s when Mexico and Texas form an alliance, and Texas is chartering warships out to Yucatán to try and prevent any naval incursions. Why on earth does Yucatán stay? I think it’s because of the absence of an alternative capital, because Yucatán is profoundly racially divided. It’s one of the few places in Mexico where you could say that really is a fairly stark racial divide. You have a plantocracy, in some ways, like the US South before the Civil War.

You’ve got a relatively small white plantocracy centered in Mérida. They have no interest whatsoever in leading an independent struggle. While the Maya achieve an underestimated level of sophistication as a state, it’s still not at the point where you would get, for more than a couple of years, a really joined-up independence movement spanning all races, all areas, and the entire peninsula.

Recommended, interesting and substantive throughout.  In the United States at least, Mexico remains a greatly underdiscussed nation.

Why is the USDA Involved in Housing?!

In yesterday’s post, The 21st Century ROAD to Housing Act, I wrote that Trump’s Executive Order “cuts off institutional home investors from FHA insurance, VA guarantees and USDA backing…”. The USDA is of course the United States Department of Agriculture. In the comments, Hazel Meade writes:

USDA? Wait, what????
Why is the USDA in any way involved in housing financing?
Are we humanly capable of organizing anything in a rational way?

It’s a good question. The answer is a great illustration of the March of Dimes syndrome. The USDA got involved with housing in the late 1940s with the Farmers Home Administration. The original rationale was to support farmers, farm workers and agricultural communities with housing assistance on the theory that housing was needed for farming and the purpose of the USDA was to improve farming. Not great economic reasoning but I’ll let it pass.

Well U.S. farm productivity roughly tripled between 1948 and the 1990s as family farms became technologically sophisticated big businesses. So was the program ended? Of course not. Over time the program subtly shifted from farmers to “rural communities”–the shift happened over decades although it was officially recognized in 1994 when the Farmers Home Administration was renamed the Rural Housing Service. Today rural essentially means low population density which no longer has any strong connection to agriculture.

So that’s the story of how the US Department of Agriculture came to run a roughly $10 billion annual housing program for non-farmers in non-agricultural communities. And how does it do this? By supporting no-money-down direct lending and a 90 percent guarantee to approved private lenders. Lovely.

It’s a small program in the national totals, but an amusing example of the US government robbing Peter to pay Paul and then forgetting why Paul needed the money in the first place.