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Doubling pork industry may not aid Indiana or producer
By NANCY VORIS
Indiana Correspondent

INDIANAPOLIS, Ind. — If Gov. Mitch Daniels’ challenge to double Indiana’s pork production is met, the Hoosier piggy that goes to the market may cry all the way home.

So says Dr. William J. Weida, professor of economics and business at Colorado College.

He is also director of the Factory Farm Project of The Global Resource Action Center for the Environment (GRACE).

The goal of the Factory Farm Project is to “eliminate factory farming in favor of a sustainable food production system which is healthful and human, economically viable and ecologically sound.”

Weida has produced a number of reports on CAFOs from an economic standpoint, looking at the negative economic impact of CAFOs in Iowa, Pennsylvania and the Carolinas.

In his 2004 report, Foundations of Sand: Considering the Rationales for Factory Farming, Weida lists several claims made by proponents of CAFOs that carry with them unstated assumptions. “If those assumptions are not satisfied,” he said, “these claims are likely to be incorrect.”

One claim that Weida examined is that only industrialized agriculture in the United States and Canada can supply the ever-growing world demand for meat and animal products.

This assumes the demand for meat protein will expand as rapidly as industrialized agriculture has expanded. The claim also assumes that world demand for protein will be satisfied by meat production by industrial agriculture in the United States and Canada. But the reality, Weida said, is that industrial production of meat protein has regularly exceeded the world’s demand for it.

Protein demand can be more efficiently met by non-meat products such as soy, and countries such as Mexico and Argentina can produce meat protein cheaper than the United States.

“The result: The U.S. is currently producing about the same number of hogs as it did in 1920, with far fewer farmers,” Weida concluded. “The price of pork has been flat and Canadian pork producers have not made a profit since 1998.”

Previous importers are producing their own meat protein, while domestic meat markets are “hostage” to health-related bans imposed by trading partners around the world.

“The pressure for U.S. and Canadian producers to cut costs by polluting (over-applying nutrients) is increasing as they compete with other countries that have few, if any, environmental regulations,” he said.

Weida has also reviewed economic research on CAFOs in Iowa, Pennsylvania and the Carolinas.

The claim that CAFOs contribute to economic development in the region is often false, he said.

Many operations are vertically integrated, and buy supplies from their own organization out of state, and not from local suppliers. Some are also quick to sign a new farmer on, but later find loopholes in the contract to drop them and sell the operation at a discount to someone within the organization’s framework. He said this follows the Canadian model.

Weida used Maxwell Foods as an example, adding that the company is more in the barn-building industry than in actually producing meat.

He viewed reports that Maxwell contracted with farmers to build a 4,000-head hog facility for $740,000 at 7.5 percent interest.

The loan can be paid off in six years, the company said, but it does not allow for the farmer’s income, maintenance or inflation.

The company’s contract, he said, has a stipulation that if the producer is operating in a manner that is not competitive in the industry, the contract can be cancelled.

“That can mean anything they want it to mean,” Weida said. “That’s why so many producers are going bankrupt. Then (the company) puts the operation back on the market for half the price and makes a profit.”

He said research shows the CAFO dollars are not staying within the state.

Materials, hogs and feed are often brought in from outside the state.

“What Maxwell says is that they will use Indiana feed, but these are not charitable companies,” Weida said. “While they are trying to get their operations in they will use Indiana feed, but as soon as they get in they will swing to out of state if another state’s is cheaper.”

To view Weida’s reports on the Internet, go to www.factoryfarm.org/topics/economic/weida

This farm news was published in the Sept. 13, 2006 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.

9/13/2006