Economic Impact of Factory Farms

General Resources

The 20th Century Transformation of US Agriculture and Farm Policy

An examination of the long-term forces that have helped shape the present structure of agriculture and rural life, including productivity growth, the increasing importance of national and global markets, and the rising influence of consumers in agricultural production (USDA Economic Research Service, Carolyn Dimitri, Anne Effland, and Neilson Conklin. June 2005.)

Contract Agreement — Hog Farm

A sample hog contract grower agreement. More and more independent farmers are signing similar contracts with large corporations in order to survive in the business.

Farm Subsidy Database

Tracks over 108 million USDA payments totaling $114 billion. Provides analyses, including top-recipient listings and payment concentration analyses at the state and county levels, and within each major USDA program. Also provides information provided by USDA on ownership interests in subsidized farms. (Environmental Working Group.)

Ag Myths Abound When It Comes to Food Costs

Charles Benbrook, an agricultural economist working as a consultant for The Organic Center in Massachusetts, debunks the USDA’s most frequent comment: “Americans have the cheapest, safest food supply in the world.” (High Plains Journal, March 9, 2004.)

You Should Pay More for Your Food

The Hidden Cost of Cheap Food. (Salt Magazine.)

Reports

Addressing the Root Causes of the Farm Crisis – The Farmer Summit Platform

In the summer of 1998, Visions for Change, a Kellogg-funded project that seeks to engage land grant universities in a vital partnership with stakeholders, created an opportunity for farmers and Land Grant faculty from the three states of Minnesota, South Dakota and North Dakota to explore the current farm crisis. (Institute for Agriculture and Trade Policy, February 2000.)

Assessment of the Cattle and Hog Industries

Annual reports to Congress about the general economic state of the cattle and hog industries, changing business practices, and areas of concern under the Packers and Stockyards Act. (Grain Inspection, Packers and Stockyards Administration, 2000 – 2008.)

The Ban on Packer Ownership and Feeding of Livestock: Legal and Economic Implications

This white paper explains why claims by big packers against the ban may be misleading. Describes the impact of packer consolidation and vertical integration on independent producers over the last 20 years and lays out how and why packers influence the market. (Iowa State University, Department of Economics, March 2002.)

Bringing Home The Bacon? The Myth of the Role of Corporate Hog Production in Rural Revitalization

This report provides information to help rural communities in Oklahoma and throughout the United States respond intelligently and appropriately when faced with rural development options. In particular, the report, using data from Texas County, Oklahoma, illustrates the impacts of the recruitment of industrial swine production on a rural county. (A report to the Kerr Center for Sustainable Agriculture.)

Concentration of Agricultural Markets

A series of reports commissioned by the National Farmers Union and conducted by Mary Hendrickson and William Heffernan.  (Department of Rural Sociology, University of Missouri, 1999, 2000, 2001, 2005, 2007.)

Consolidation in US Meatpacking

Through the 1970’s, larger plants paid higher wages, generating a pecuniary scale diseconomy that largely offset the cost advantages that technological scale economies offered large plants. The larger plants’ wage premium disappeared in the 1980’s, and technological change created larger and more extensive technological scale economies. As a result, large plants realized growing cost advantages over smaller plants, and production shifted to larger plants. (Economic Research Service, USDA, Agricultural Report No. 785 (AER-785), February 2000.)

Corporate Hog Production: The Colonization of Rural America

A striking comparison between historical colonization and current trends in rural agri-business in North America. (John Ikerd, Presented at Hog Summit 2003.)

The Corruption of American Agriculture

An analysis of how government policy has led to the corporatization of American agriculture, and of the resulting harm it has caused to independent farmers, rural communities, consumers and the environment. Specific changes in policy are proposed to shift American agriculture back to a sustainable, competitive system.

Down on the Farm: NAFTA’s Seven-Year War on Farmers and Ranchers in the U.S., Canada and Mexico

Reveals the basis for farmers’ concern about NAFTA and its model of export-oriented agriculture. (Public Citizen’s Global Trade Watch, June 2001.)

Economic Analysis of Farms

Circle Four Farms is a large, vertically integrated pork factory. This research estimates the population and employment impact of this huge operation. (State of Utah Governor’s Office of Planning and Budget, Demographic and Economic Analysis division, August 14, 1996.)

An Economic Assessment of Food Safety Regulations: The New Approach to Meat and Poultry Inspection

A cost-benefit analysis of new HACCP rules. The benefits of reducing pathogens, which include lower medical costs of illness, lower productivity losses, and fewer premature deaths, range from $1.9 billion to $171.8 billion over 20 years. (USDA Economic Research Service, July 1997.)

Understanding the Impacts of Large-Scale Swine Production

A report with questions and answers directly related to the economics of large-scale swine production. (Mike Duffy, John Ikerd and others, Iowa State University and University of Missouri.)

The Economics of Factory Farming

This report examines the costs and benefits of moving towards humane, sustainable food systems. (Compassion in World Farming, July 2002.)

Economics of Feeding Dairy Cows on Well-Managed Pastures

A study demonstrating the profitability of pasturing cattle. (University of Vermont, 1995.)

External Costs of Agricultural Production in the United States

Published in the peer-reviewed International Journal of Agricultural Sustainability, this study estimates that the negative impacts of agriculture in the US may cost society between $5.7 billion and $16.9 billion annually. The negative impacts identified include the cost of greenhouse gas emissions from cropland and livestock, damage to wildlife and ecosystem biodiversity, and damage to human health from pesticides. (International Journal of Agricultural Sustainability, February 2004.)

Factory Farming: Economic Advantage or Ecological Disaster?

An examination of the economic and ecological impacts of industrial swine production in the US. (Michele Bayer, New York University, November 1999.)

Going to Market: The Cost of Industrialized Agriculture

This report examines industrialized agriculture and its negative effects on our natural resources. The report analyzes the structure of the agriculture industry, the position of the livestock industry within the global food system, and the role of the farmer within the livestock industry. (Izaak Walton League, April 2002.)

Hogs, Economics and Rural Communities

Does the free enterprise economy give factory farming corporations the right to operate despite opposition from rural residents? Agricultural Economics professor John Ikerd breaks down and refutes the economic justification for factory farming. (John Ikerd, Presented at Hog Summit 2003.)

Impacts of Concentration in Hog Production on Economic Growth in Rural Illinois: An Economic Analysis

The results of this study counteract the theory that large hog farming contributes to the vitality of local economies. On the contrary, the several models developed here consistently indicate that large hog farms tend to hinder economic growth in local communities. The report goes on to discuss public policy implications. (Miguel Gomez and Liying Zhang, Illinois State University-Normal, April 2000.)

The Impact of Open Space and Potential Local Disamenities on Residential Property Values in Berks County, PA

Study by Penn State professors, who compare the effects of a landfill, a mushroom production facility, a regional airport, and a factory farm on the prices of nearby homes. Of these undesirable neighbors, factory farms had the second most negative impact on home prices, following landfills. (Richard Ready and Charles Abdalla, Pennsylvania State University, June 2003.)

The Multiple Functions and Benefits of Small Farm Agriculture

This policy brief challenges the conventional wisdom that small farms are backward and unproductive. Evidence from Southern and Northern countries demonstrates that small farms are “multi-functional” – more productive, more efficient, and contribute more to economic development than large farms. (Peter M. Rosset, Institute for Food and Development Policy, September 1999.)

The Real Economics of Factory Livestock

Economic arguments in favor of CAFOs are addressed one by one, exposing shortcomings and outright fallacies. (John Ikerd, September 1999.)

Rural Sociology: Commodity Agriculture, Civic Agriculture and the Future of U.S. Farming

Commodity agriculture and civic agriculture represent two distinct types of farming found in the US today. Commodity agriculture is grounded in the belief that the primary objectives of farming should be to produce as much food/fiber as possible for the least cost. It is driven by the twin goals of productivity and efficiency. Civic agriculture, on the other hand, represents the rebirth of a more locally oriented agriculture and food system. Using data from the 1992 and 1997 Censuses of Agriculture and other secondary data sets, the authors examine factors and conditions associated with the presence and growth of both types of agriculture. (Lyson, Thomas A; Guptill, Amy, September, 2004. Vol. 69; Issue 3; ISSN: 00360112.)

Why Invest in Rural America – And How? A Critical Public Policy Question for the 21st Century

A paper that critically examines public policy in rural areas and proposes economic changes. (Karl N. Stauber, Federal Reserve Bank of Kansas City, May 2001.)

Reports by Dr. William Weida, Dept. of Economics, Colorado College

Natural Competitive Advantage

This paper provides a brief overview of the economic forces that affect the respective levels of production of conventional farms and industrial operations, and uses these principles to analyze the impacts of various agriculture and energy policies on conventional and industrial agriculture. Ultimately, the paper concludes that the best policies for preventing CAFO expansion are those that promote enforcement of existing regulations and those that promote energy conservation, rather than supporting new energy production from dual-use sources. (Dr. William Weida, July 2008.)

Foundations of Sand: Considering the Rationale for Factory Farming

Factory Farms have spread across the landscape of the US on a string of claims that have mislead many communities. Learn why the purported benefits of factory farms are full of holes, and the reality that lies beyond the claims. (Dr. William Weida, March 2004.)

A Short Analysis Of: Manure Management for Water Quality: Costs to Animal Feeding Operations of Applying Manure Nutrients to Land

Weida’s critique of a USDA study on the costs of manure spreading under the new EPA requirements. He explains how it validates CAFO critics’ contention that these operations shift their costs to the surrounding area. (Dr. William Weida, June 2003.)

A Synopsis of Potential Impacts from Dairies on a Regional Economy

This two-page paper summarizes the impact of air and odor pollution from industrial dairies on local economies. (Dr. William Weida, March 2003.)

The ILO and Depopulation of Rural Agricultural Areas: Implications for Rural Economies in Canada and the US

This paper makes the case that (1) depopulation of rural areas is occurring because of CAFOs and (2) rural agricultural areas are becoming increasingly separated from the communities that are located in those areas. (Dr. William Weida, November 2002.)

The Hog ILO, Its Implications for Rural Economies in Canada and the US and Comments on the Report to Joint Agricultural and Rural Affairs Committee and Planning and Development Committee and Council of Ottawa, Ontario, Canada

A brief critique of some of the points raised in the Report to Joint Agricultural and Rural Affairs Committee and Planning and Development Committee and Council, 25 June 2002, along with a review of the current research on the subject of hog factories and local economies. (Dr. William Weida, July 2002.)

The Evidence for Property Devaluation Due To The Proximity to CAFOs

A major reason that concentrated animal feeding operations (CAFOs) are constructed in a given region is that the area has a reputation for loose environmental regulations and lax enforcement of those regulations. The stricter environmental regulation and enforcement becomes, the more likely that CAFOs will locate elsewhere. (Dr. William Weida, January 2002.)

Pollution Shopping in Rural America

The myth of economic development in isolated regions. (Dr. William Weida, November 2001.)

Potential Regional Economic Effects of Large Feedlots

Discusses current research findings concerning the regional economic impacts of large, concentrated animal feeding operations (CAFOs). (Dr. William Weida, August 2001.)

A Summary of the Regional Economic Effects of CAFOs

(Dr. William Weida, July 2001.)

Talking Points from: Vertical Coordination of Agriculture in Farming-Dependent Areas

A two-page synopsis of some of the points raised in this report from the Council for Agricultural Science and Technology. (Dr. William Weida, April 2001.)

Nutrient Management Issues

This short paper addresses the five major arguments that CAFO proponents usually use to support nutrient management plans. (Dr. William Weida, April 2001.)

A Citizen’s Guide to the Regional Economic and Environmental Effects of Large Concentrated Dairy Operations

Created to help citizens and environmental groups evaluate applications for concentrated dairy operations. (Dr. William Weida, November 2000.)

Impact Calculations for a Hog Concentrated Animal Feeding Operation

A set of calculations of water usage and land application tailored to the specifics of a proposed operation in Canada. (Dr. William Weida, May 18, 2000.)

CAFO Operations and the Destruction of Agricultural Communities

Report by Dr. William Weida on the strong link between rural communities and food policy. (Dr. William Weida, April 2000.)

A Brief Review of RB336: The University of Nebraska Cooperative Extension Publication “Socioeconomic Impacts of Expanding Pork Production” (by John C. Allen and David J. Drozd)

Remarks by Dr. William Weida on the effects of large swine operations on regional economies. (Dr. William Weida, April 2000.)

Concentrated Animal Feeding Operations and the Economics of Efficiency

This report provides an explanation of some of the industrial organization issues involved in operating large, corporate hog farms, and an explanation of the two contracts that govern the behavior of corporate hog firms – the business contract and the contract with the community that hosts the firm, and the implications of these issues for the community. The article also examines the question of efficiency of CAFO production – whether large hog farms are more efficient than conventional hog farms. (Dr. William Weida, March 2000.)

Economic Implications of Confined Animal Feeding Operations

An economic overview of CAFOs, including the effect of diminishing returns, the costs and benefits of CAFO waste, and the impact of these facilities on economic development. (Dr. William Weida, January 2000.)