Unique Expenses to Pet Food that Raise the Price
Many pet food consumers experience sticker shock when looking at the price of quality pet food. Why is it so expensive?
The UK website Mirror.co.uk recently published a story titled “Pet food costs 50 percent more than similar meals humans eat”. The story compared prices of canned meats for humans to similar pet food meats finding human food is often less expensive. I frequently hear from consumers wishing there could be affordable options of quality pet food. The cost problem of pet food boils down to two things – quality ingredients are expensive and pet food has additional expenses that human food does not.
Let’s start with the very basic – quality of ingredients.
With human food meat, as example, all meat available for human food is required by law to be USDA inspected and approved human edible. Meats are available in different qualities – such as Prime or Choice or Humanely Raised – but all meats for human consumption have been inspected by USDA and approved to be edible. With pet food, meats are not required to be USDA inspected and approved edible. The meat used in pet food is allowed to be “inedible” – also known as feed grade or pet grade. Needless to say, edible meats cost significantly more than inedible.
Human food: the wholesale price for whole chicken (factory farmed, not free range) is about $1.15 per pound.
Pet food: the price of poultry by-product meal (pet food grade or feed grade) can cost as little as $450 per ton.
[one_half]Human Grade Meat
$1.15 per pound[/one_half][one_half_last]Pet Grade Meat
(also known as feed grade or inedible)
$0.22 per pound[/one_half_last]
Some pet foods use free range meats, graded meats (such as Prime or Choice), or humanely raised meats – which could easily raise the manufacturer price to $2.00 per pound (just for meat).
Meat would be the most dramatic difference in costs of feed grade to food grade, but the same significant price difference applies to each and every ingredient in a pet food that uses actual food ingredients compared to the price of feed quality/inedible ingredients.
Ballpark estimate, this is what it breaks down to manufacturer costs per pound of pet food for ingredients only (this is not manufacturing costs or any other cost – just estimated cost of ingredients – manufacturer estimated cost)…
[one_third]Feed Grade/Pet Grade/Inedible Ingredients, standard bulk vitamins/minerals:
$0.50 per pound
[/one_third][one_third]Food Grade – Factory Farmed meats, standard bulk vitamins/minerals:
$2.00 per pound[/one_third][one_third_last]Food Grade – Humanely raised meats or graded meats, highest quality/human grade vitamins/minerals:
$3.00 per pound[/one_third_last]
Note: I’m being very generous with the cost of feed grade/inedible ingredients – as example, Walmart sells a 50 pound bag of Pedigree dog food for $0.46 a pound (retail). We can safely assume – with mark-up – the ingredients in this pet food cost the manufacturer an estimated $0.15 a pound.
Quality of ingredients aside for a moment, another expense unique to pet food is the cost to formulate a recipe. It’s fairly simple in human food. As example, if John Doe wants to sell frozen pizza, he finds a manufacturer and makes the pizza. But if John Doe wants to sell pet food, there are many nutritional requirements that need to be met. The pet food must contain particular levels of protein, fat, fiber, calcium, phosphorus, potassium, sodium, chloride, magnesium, and the list goes on for many more nutrients. So with pet food John Doe must hire a pet food formulator/nutritional expert to develop a recipe. This consultant charges upwards of $5,000.00 per recipe ($5,000.00 for one dog food formula and $5,000.00 for one cat food formula).
Next, using our John Doe pet food example, John has his recipe but now he must test the pet food to make certain it meets AAFCO nutrient requirements. Cost of complete laboratory testing for nutrient content (protein, fat, moisture, fiber, each vitamin analysis, each mineral analysis) – $2,500.00 per pet food. Several pet food manufacturers do full nutritional analysis on each and every batch of pet food they make, some test quarterly, some test yearly ($2,500.00 each testing of pet food). If John Doe would be selling frozen pizza instead of pet food, the nutritional testing is minimal.
Next, product packaging need to be designed and printed. This sounds simple enough, but nothing is simple with pet food. Unlike with human food – all of which falls under federal regulation – pet foods must comply with FDA, State and sometimes even USDA regulations. The bad news for a pet food manufacturer, not all regulations are consistent. As crazy as it might be, with pet food the font size must be just right on the packaging. Also the color of the font, or another example is if a parenthesis is used in the ingredient listing, and so much more is highly scrutinized by regulatory officials. They don’t care so much about waste meat in pet food, but they certainly care about font size on pet food labels. So another expert must be hired to design the pet food packaging to make certain labels meet all regulatory requirements costing another $2,500.00 per product. Again, if John Doe would be selling pizza instead of pet food, the packaging design would be much simpler due to consistent regulations of human food.
Another unique expense to pet food is state registration fees. In order for John Doe to sell his pet food, he must register each of his pet food labels in each state he sells in. John Doe pizza isn’t required to do this, only John Doe pet food. Below are the fees for states that charge a per label (per pet food product) registration fee…
Vermont – $85.00 per product per year.
Maine – $100.00 per product per year.
Rhode Island – $60.00 per product per year.
New York – $100 per product per year.
Maryland – $50 per product per year.
West Virginia – $50 per product per year.
North Carolina – $12 per canned pet food product per year, $40 per pet food in 5 # or less packages per year, $45 over 5# per product per year.
South Carolina – $15 per product per year.
Illinois – $90 per product per year.
Minnesota – $50 per product per year.
Iowa – $50 per product 10 pounds or less per year.
Missouri – $25 per pet food sold in packages 10# or less per year.
Louisiana – $40 registration fee per year, 50 products or less label fee of $10 per label per year, 51 to 200 $8 per label per year, more than 200 label fee $6 per label per year.
Texas – $50 per product in 5# packages or less per year.
Kansas – $25 per product 10 lbs or less per year.
South Dakota – $50 per pet product per 2 years.
North Dakota – $120 per product per 2 years initial, $100 per product per 2 years to renew.
Montana – $50 per pet food per year.
Wyoming – $20 per product per year.
Washington – $90 per product in packages greater and less than 10 lb and $22 per product if only greater than 10 lb. per year.
Colorado – $25 per product in packages less than 10 lbs per year.
New Mexico – $2 per product per year.
Utah – $55 per product per year.
Just to sell one pet food or treat product (10 pound bag or smaller) in these 23 states costs $1,172.00 a year. If a company manufactures/sells only 10 different varieties of pet food (only 5 cat foods and 5 dog foods) and 5 different treats – they are charged $17,580.00 a year just for the opportunity to sell in these 23 states. For a small company that doesn’t sell millions of pounds of pet food a month, this is a significant cost. And again this fee is completely unique to pet food/animal feed, human foods do not register with states and are not charged these additional fees.
And there is one more expense unique to pet food. If you buy John Doe’s frozen pizza at the grocery, take it home, cook it and discover it tastes terrible, do you return it to the grocery for a refund? Typically not – most human food consumers do not return a food because they don’t like the taste. They simply don’t buy that pizza again. But with pet food, consumers have the opportunity to return the food if the pet doesn’t eat it/doesn’t like it. While this return policy is great for consumers in one perspective, it adds on additional money to the actual purchase price of the pet food. I’m told a small manufacturer can have ‘the pet didn’t eat it’ product returns of $5,000.00 a month – which adds another $60,000.00 a year to the actual costs a manufacturer must base the sales price on.
All pet foods have the expense of formulating a recipe, laboratory testing a recipe, packaging/labeling costs, state fees and product return costs – which are almost totally exclusive to pet foods (not an expense to human foods). But not all pet foods have the added expense of using food ingredients. Remember, FDA and each State allows pet foods to be made from basically waste ingredients that cost pennies compared to food ingredients. Using the example explained above – food ingredients and high quality vitamins and minerals in a pet food cost the pet health conscious manufacturer (at least) 6 times more than the inferior quality ingredients they are allowed to use. Many of those same companies that purchase the highest quality ingredients test each and every batch of food – at additional expense they are not required to do – to make certain the pets consuming that food get the best nutrition possible. Add to basic cost of high quality ingredients distributor mark-up and retailer mark-up, and add the numerous expenses exclusive to pet food…quality pet food made from human grade ingredients with quality supplements is not cheap.
To me, it’s worth every penny. My friend and fellow pet food safety advocate Dr. Cathy Alinovi tells her clients this…either pay for good food now, or pay me later.
Wishing you and your pet(s) the best,
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