Hog Farming

Policy

Overview

Government policies shape many trends in the industry, most notable the Smithfield Agreement established in 1997 and later formalized as a law in 2007 which provides a moratorium on any new hog farm constructions that will house over 250 sows (4). Designed to help curb environmental concerns around large hog farms, critics argue the policy change does little to help protect the state environment due to the large number of loopholes in the legislation. Additional shifts in policy include funding to find environmentally superior technologies to help with the industry and labeling programs. Programs designed to promote environmentally superior technologies gives funds to organizations and companies working to produce new technologies that will help reduce environmental costs associated with hog farming. On a national level, country of origin labeling laws requires processors to identify the country where a hog was grown and processed. These policies attempt to increase focus on environmental concerns in the industry and to highlight the origin of pork products.

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State-Level Policies

Hog farming has always been an important part of North Carolina’s agriculture. However, lenient environmental regulations and local zoning exemptions attracted corporations like Smithfield and Premium Standard Farms in the 1990s, and hog farming in the state has never been the same (1).

Another key trend - and a contributing factor to the number and size of North Carolina's hog farms - deals with the environmental management of the industry. Originally, waste from hog farming was allowed to be stored in large lakes, called lagoons; material from the lagoons was then sprayed onto fields that contained crops. This created an economically feasible development for farmers, allowing them to raise hogs and grow crops on the same farm. Lenient environmental regulations and local zoning exemptions provided large-scale hog farms the opportunity to construct several mega farms throughout eastern North Carolina (2).

The lenient environmental regulations for hog farms is a controversial aspect of the pork production process in North Carolina, and led environmental and social advocacy groups to lobby for systemic change. Specifically, as a result of environmental concerns regarding hog waste, the North Carolina state government passed a bill in 1997 that placed a moratorium on construction of any new farms with over 250 hogs. The moratorium became law in 2007 (3).

The moratorium was put in place to allow for the research, development, and implementation of environmentally superior technologies (ESTs). Because of this moratorium, North Carolina has been a leader in hog waste management in the country, and may one day serve as the model for other states. The moratorium only limits new lagoon farms and does not apply for those using ESTs. In response to such environmental concerns, Smithfield Foods and Premium Standards Farms (PSF) signed an agreement with the Attorney General of North Carolina to give money to North Carolina State University to invest in "superior waste technologies."

The Smithfield Agreement

The exponential growth of hogs in North Carolina raised environmental concerns regarding animal waste. In 1999, Hurricane Floyd flooded hog waste pools, called lagoons and contaminated local water supply. In 2000, the Attorney General of North Carolina entered into agreements with Smithfield Foods and its subsidiaries, and Premium Standard Farms (bought by Smithfield in 2007), under which both companies agreed to fund a project that would develop superior waste techniques for use on North Carolina hog farms (4). Frontline Farmers, an independent group of contract farmers in North Carolina, although not part of funding the research, agreed in 2002 to cooperate with any of the new implementations (5). In total, $17.1 million was earmarked for the environmentally superior technologies (EST) identification and development initiative to help increase environmentally friendly hog waste management (6). The moratorium became law in 2007, however economically viable alternatives for waste management are not readily available. Additionally due to loopholes in the legislation wording that allowed for operations to expand to land purchased and permitted before the 1997 moratorium, lagoon based waste management is still prevalent (3).

The website of the Waste Management Program at North Carolina State University explains why the hog production system is a big public policy issue: "The vast majority of North Carolina's hog farms use the lagoon and spray field system to manage waste from animals. Pigs are raised in houses with slatted floors. Manure drops through the slats to a pit beneath the house. Periodically, the manure is flushed from houses to a lagoon, a large earthen basin, where microbes decompose the waste.

"Most lagoons are lake-like, so they tend over time to fill with liquid whenever there is an excess amount of rain. In order to keep the liquid in the lagoon at a manageable level, farmers spray the liquid on nearby fields, known as spray-fields, thus using the waste to add nutrients to the crops. This economically feasible system was created to maximize efficiency on hog farms, and well-kept lagoons have proved to be very profitable.

"However, the lagoon-spray field system is not without its own flaws. If not managed properly, lagoons can be a source of strong odor. Lagoons can also flood in the event of hurricanes, spilling their contents into nearby surface waters, and contaminating the local water supply."(6)

Hog farming is an important part of North Carolina's economy, and companies located here wish to maintain their relations with the state. Environmental groups, including the Environmental Defense, the Southern Environmental Law Center (SELC) and the NC Chapter of the Sierra Club lauded the signing of the agreement. (7)

Environmentally Superior Technologies (ESTs)

As per the agreement, 18 technology candidates in various stages of construction or operation and performance verification were examined for possible implementation. One of these 18 is the ambient digester (8).

In 2003, Smithfield Foods invested $20 million in the Biomass Energy Sustainable Technology (BEST) Biofuel Project. A facility, built in Utah, attempted to convert swine waste into biodiesel vehicle fuel - a cleaner and more efficient alternative to petroleum diesel. Using heated digesters, the process uses livestock manure to produce a 'biogas' rich in methane. Captured methane is then converted into bio-methanol, which is then mixed and reacted with oils, animal fat or used cooking oil, to make 'biodiesel'. Biodiesel is a clean-burning fuel that can be blended with conventional petroleum diesel much like ethanol is commonly mixed with gasoline. The petroleum diesel / biodiesel mixture is called B20 (biodiesel forms 20% of the mixture) (9).

The initial excitement was short-lived as the investment in EST was largely unsuccessful. In 2008 Smithfield sold its Utah plant stating hog waste did not possess the nutritional content needed to make biofuel feasible (10). One project that still seems most viable for hog waste management is Super Soil (3). Super Soil separated hog waste into solids for fertilizer and liquid for irrigation and reuse. The process is costly and many farms are unable to afford the cost of implementation. However, the company is continuing studying ways to lower the price (3).

Impacts of Smithfield Agreement and Environmentally Superior Technologies

Despite the efforts of the Smithfield Agreement to focus on EST, many still see the current waste management systems as faulty. In July 2013, nearly 600 hundred citizens filed complaints against waste disposal methods used by Smithfield and news sources conceded that since the Smithfield Agreement “ virtually all hog farms in North Carolina still use the same method” of waste disposal (11).

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National Policy

In addition to state legislation, the hog farming industry in North Carolina is increasingly shaped by national policies that seek to help inform consumers about food commodities. Specifically, legislation on country of origin labeling shapes the industry by allowing North Carolina based companies to highlight domestic production.

Country of Origin Labeling

The Country of Origin Labeling (COOL) provisions in the 2002 Farm Bill require retail sellers to inform consumers of the country of origin of certain commodities, excluding processed meat. It was expanded in 2008 to include additional products, such as nuts. The implementation of such legislation is symptomatic of increased consumer awareness and concern with food quality, safety and production methods (12).

Initially, COOL encountered heavily opposition, largely around the issue of whether the benefits exceed the enormous costs of implementation. The USDA, for instance, estimated that it would cost as much as $582 million in its first year of implementation with producers bearing $235 million of that cost (13). Several studies concluded that there is benefit to labeling (14) although companies such as Smithfield argue that the law is misplaced. Former Smithfield Foods Chairman and CEO Joe Luter III claimed that COOL is "bad public policy," but expects that it will help the company rather than hurt it (16).

Why? "Because it will keep Canadian pigs out of the U.S.," he says. "When the law goes into effect, farmers will have to trace and certify origin of their pigs." Canadian pigs will have to be kept separate on the farm, at the packing plant and on the cutting floor, dramatically increasing costs. He says Smithfield will probably refuse to buy pigs of Canadian origin. "The law is ill-conceived, it's all politics, and it's going to hurt the very people it was designed to help," he adds (16).

The biggest challenge for Smithfield is that it often sourced hogs from multiple countries in processing centers and now most tracks where each hog originated to comply with legal standards. However, this did not have an impact on the profits for the company (16).

References
  1. Food & Water Watch (2010). Factory Farmed Hogs in North Carolina.
  2. Stith, P. & J. Warrick. (1995, Feb. 22). "Murphy's Law." News & Observer (Raleigh). Retrieved on August 15, 2007.
  3. Hardy, S. (2012, Jan. 4). The Price of Pork. Endeavors. UNC-Chapel Hill. Retrieved on February 12, 2014.
  4. “Agreement between the Attorney General of North Carolina and Smithfield Foods Inc.; Brown's of Carolina Inc.; Carrol's Foods Inc.; Murphy Farms Inc.; Carrol's Foods of Virginia Inc.; and Quarter M. Farms Inc." (2000, July 25). Retrieved February 24, 2014 from www.cals.ncsu.edu/waste_mgt/smithfield_projects/agreement.pdf
  5. Williams, C.M. & L. Bull, "Overview of Innovation in Manure Processing Technologies - Efforts at North Carolina State University funded by the Attorney General Agreements with Smithfield Foods, Premium Standard Farms and Frontline Farmers" Retrieved on August 16, 2007 from www.traill.uiuc.edu/uploads/sowm/papers/p183-189.pdf
  6. "Development of Environmentally Superior Technologies for Swine Waste Management per Agreements between the Attorney General of North Carolina, Smithfield Foods, Premium Standard Farms and Frontline Farmers." Raleigh, NC: North Carolina State University, College of Agriculture and Life Sciences, Waste Management Programs. Retrieved on August 16, 2007 from www.cals.ncsu.edu/waste_mgt/smithfield_projects/smithfieldsite.htm
  7. Environmental Defense. (2000, July 25). "Environmentalists Applaud Action Requiring Smithfield Foods To Eliminate NC Hog Lagoons." Retrieved August 16, 2007.
  8. "Development of Environmentally…" (fn. 3)
  9. Smithfield Foods. (2003, Feb. 21). "Smithfield Foods to Build Waste-to-Energy Facility." Retrieved August 16, 2007.
  10. Smithfield Sells Utah Biofuels Plant.” (2008, Feb. 14). E-Feedlink. Retrieved February 24, 2014.
  11. Neff, J. (2013, July 7). “Hundreds File Complaints Over Hog-Farm Waste.” News and Observer (Raleigh). Retrieved February 24, 2014.
  12. Caswell, J.A. (1998, Oct). "How Labeling of Safety and Process Attributes Affects Markets for Food." Agricultural and Resource Economics Review. No. 27, pp. 151-158.
  13. Van Sickle, J. (2003, Dec). "Country of Origin Labelling: A COOL Update". Policy Brief Series, University of Florida, International Agricultural Trade and Policy Center.
  14. Umberger, W. et al. (2003). "Country of Origin Labeling of Beef Products: U.S. Consumers' Perceptions." Conference Paper, presented at 2003 FAMPS Conference: "Emerging Roles for Food Labels: Inform, Protect, Persuade." Washington, DC, March 20-21, 2003; Van Sickle (fn 10).
  15. Food & Water Watch. (2011, May 11). “Hog Waste is Dragging NC through the Manure.” Retrieved February 24, 2014.
  16. Neutkens, D. (2003, March 15). “Smithfield's ROI.” National Hog Farmer. Retrieved February 24, 2014.

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