|
|
|
Animal Factories
Pollution and Health Threats to
Rural Texas
This article was written by the Consumers Union
Southwest Regional
Office.
Available in PDF
Format.
|
Family farming was once the bedrock of local economies
across Texas. Family farms supported local businesses,
bought grain and feed locally, and employed additional farm
labor. In the High Plains, many families still work the land
first opened up at the turn of the century by their
great-grandparents. But today most food is produced not by family farmers but
by a handful of giant agribusinesses that bear little
resemblance to the traditional family farm. In the large
animal and dairy production facilities, a thousand animals
may be confined in each of dozens of long barns. The farm
manager trucks in massive quantities of grain purchased
wherever it is cheapest and ready and stores massive
quantities of waste in lagoons or dry heaps. These animal factory farms are often part of a vertically
integrated national or multinational commodities corporation
that can provide its own feed and take the animals directly
to its own slaughterhouse. First, the major agricultural
conglomerates control most of the processing. Since the
processors purchase animals from the farmer, this means
there are relatively few markets for small meat producers.
For example, in the markets for beef, chicken, and sheep,
the largest four corporations in each industry control
anywhere from 50 percent to 87 percent of the market and
some firms such as Cargill and ConAgra are in the top four
for multiple industries. (1)
Currently only four packing houses process more
than 60% of the federally inspected hogs sent to slaughter.
(2) In the beef cattle
industry, the four largest beef packers accounted for at
least 71 percent of output in 1992 and as much as 87 percent
by 1998. (3) Vertical expansion by corporate farms allows them to
control most or all aspects of production. Continental Grain
processes and sells pork and poultry, operates feedlots, and
sells nutritionally enhanced corn used as poultry and
livestock feed. (4) Cargill,
the largest private corporation in the US, maintains
diversified operations in grain trading, food processing,
cattle feedlots and contract hog production.
(5) Koch Industries owns
cattle ranches, feedlots, fertilizer and agricultural
chemicals, and seed and feed processing plants-allowing it
to control its inputs and send its cattle to its own
feedlots. (6) ConAgra, an
integrated beef, pork and poultry company, recently
announced its intention to "source internally" an additional
$1 billion in goods and services previously purchased from
others. "Internal sourcing will keep more profit margin
inside ConAgra," the company said.
(7) This high level of
consolidation makes it difficult for smaller producers to
remain competitive, in part because corporations that
control more than one industry "can afford to operate at a
loss in one area in order to eliminate the competition."
(8) The broiler chicken industry is perhaps the best example
of how rapidly and thoroughly a meat production system can
become industrialized and vertically consolidated. Up until
the 1950s, most poultry and laying hens were raised in a
non-intensive fashion on small family farms. In the early
1950s, technological innovations in automated production,
disease control, and nutrition-including the use of
antibiotics as growth promoters-allowed large, confined
broiler operations to surpass the production capabilities of
traditional poultry farms. This led to the development of
contract or credit agreements between feed dealers and
growers, where feed dealers would supply credit to growers
in the form of feed or chicks in exchange for payment when
the mature chickens were sent for slaughter. Over time,
companies began to integrate and own all aspects of the
production process-feed mill, growing birds, and processing
plant-and then would contract with growers to house and care
for their birds in exchange for a fee. (9) Today,
approximately 90% of all broiler chickens are raised by
farmers under production contracts and the remaining 10% are
raised on-site by the integrated poultry companies
themselves. (10) The biggest
percentage of the broiler production in Texas is controlled
by three companies-Pilgrim's Pride, Tyson, and Sanderson
Farms. (11) Pittsburg, Texas is home to Pilgrim's Pride poultry
company, the fifth largest poultry producer in the country.
Owned and operated by native Texan Lonnie "Bo" Pilgrim, the
company has an estimated $1.4 billion in yearly sales
(12) from the production and
processing of millions of chickens and eggs each year in
East Texas and other states. Pilgrim's Pride Corporation is a model of vertical
integration, owning everything from the breeding hens and
hatcheries to the feed mills and processing plants. The
company owns or contracts for space in approximately 238
breeder farms and owns seven hatcheries which can produce
approximately 9 million chicks per week. The company then
raises the chickens under contract on 1,100 grow-out farms
in Texas and Arkansas. (13)
The adult birds are shipped in company trucks to six
company-owned processing plants (five are in Texas) which
have the capacity to process 1.3 billion pounds of dressed
chicken annually. (14) Adding
to its poultry empire, the company also operates three egg
production farms near Pittsburg, Texas that house
approximately 2 million birds.
(15) One egg farm is owned directly by the company, but the
other two farms are operated by Pilgrim's Pride under
contract to another Bo Pilgrim company, Pilgrim Poultry GP.
Pilgrim's Pride also contracts with Bo Pilgrim for the
production of approximately 1.6 million broilers annually.
(16) These contracts have
proven lucrative for Mr. Pilgrim-in 1998, he earned almost
$5.4 million in grower fees for his personal egg and broiler
contracts with Pilgrim's Pride. (17)
This does not include his annual salary and
bonus compensation of approximately $760,000 for his
Chairman position at Pilgrim's Pride, nor does it include
the value of his 16.7 million shares of company stock.
(18) The pork industry is quickly following the same path to
vertical integration and consolidation. Today, the largest
producers (those that market more than 10,000 hogs per year)
comprise only 2.4 percent of all farms, yet they produce
approximately 53% of all hogs that go to market.
(19) Over one third of those
hogs are now grown under contract, similar to the contract
system in the broiler industry.
(20) Over the course of the
last three decades, the total number of US pig operations
has dropped from almost 1 million in 1968 to only 114,380 in
1998. Most of that decrease is from the loss of small farms
(less than 1000 head), which have decreased in number by 86%
during that period. (21)
Meanwhile, the number of large farms has grown by 230%,
(22) replacing small and
medium sized hog farms with fully integrated production
systems such as Texas' Premium Standard Farms. Premium
Standard Farms-ranked 7th in the US in hog production-owns
all aspects of production from animal genetics to piglets to
feed to final packaging. (23)
Due to the large presence of Premium Standard facilities in
Dallam County, Texas, the county is now ranked 49th in hog
production for all counties in the US.
(24) These integrated producers rely far less on the local
economy for feed, supplies and processing, and instead use
company owned facilities. According to local farmers, Texas
Farm, Inc. in Perryton, a 250,000 head pig farm, hauls feed
in from the north and the finished pigs out to Iowa for
processing. "They have not bought any grain from the grain
elevators in Ochiltree County," Jean Gramstorff of
Farnsworth told Consumers Union SWRO.
(25) Gramstorff is a
spokeswoman for ACCORD, a Perryton-based group opposing
expansion of the factory swine industry in the Texas
Panhandle. 2 Casey, Jean Anne and Colleen Hobbs, "Lean Times on the Hog Farm," New York Times, January 29, 1999, p. A19; 3 MacDonald, James M. and Michael Ollinger, "U.S. Meat Slaughter Consolidating Rapidly," Food Review (May-August 1997), p. 22; also Palmer, Eric, Kansas City Star, August 25, 1998. 4 Hoover's Handbook of Private Companies (Hoover's Business Press: Austin, TX, 1997), p. 94. 5 Hoover's Handbook of Private Companies (Hoover's Business Press: Austin, TX, 1997), pp. 78-79. 6 Hoover's Handbook of Private Companies (Hoover's Business Press: Austin, TX, 1997), p. 201. 7 ConAgra Form 8-K, Securities and Exchange Commission, "Operation Overdrive" Restructuring Announcement, May 12, 1999. 8 Swenson, Leland (President, National Farmers Union), "Agricultural Concentration," Testimony presented to the United States House Agriculture Committee, February 11, 1999, p. 5. 9 Martinez, Steve W., "Vertical Coordination in the Pork and Broiler Industries: Implications for Pork and Chicken Products," Agricultural Economic Report, No. 777 (Economic Research Service, U.S. Department of Agriculture, April, 1999), p. 5-6. 10 Martin, Laura L. and Kelly D. Zerig, "Relationships Between Industrialized Agriculture and Environmental Consequences: The Case of Vertical Coordination in Broilers and Hogs," Journal of Agriculture and Applied Economics, Vol. 29, No. 1 (July 1997), pp. 46-47. 11 Phone conversation with James Grim, Texas Poultry Federation, March 7, 2000. 12 "Pilgrim's Pride Corporation Reports Record Net Sales for the First Quarter of Fiscal 2000," PR Newswire, January 18, 2000 (Lexis Nexis article). 13 Pilgrim's Pride SEC Annual Report (online SEC Form 10-K405), December 14, 1998, SEC file No. 001-09273. 14 Pilgrim's Pride SEC Annual Report (online SEC Form 10-K405), December 14, 1998, SEC file No. 001-09273. 15 Pilgrim's Pride SEC Annual Report (online SEC Form 10-K405), December 14, 1998, SEC file No. 001-09273. 16 Ibid, and Exhibit 10.49, Pilgrim's Pride Corporation Quarterly Report on Form 10-Q for the three months ending March 29, 1997. Broiler Grower Contract dated May 6, 1997 between Pilgrim's Pride Corporation and Lonnie "Bo" Pilgrim, Farm 30. 17 Pilgrim's Pride SEC Schedule 14A (online SEC form DEF 14A), December 22, 1998, SEC file No. 001-9273. 18 Pilgrim's Pride SEC Schedule 14A (online SEC form DEF 14A), December 22, 1998, SEC file No. 001-9273. 19 National Pork Producers Council, "1999/2000 Pork Facts," p. 12. Internet source: http://www.nppc.org/PorkFacts/2000PORKFA.pdf. 20 Drabenstott, Mark, "This Little Piggy Went to Market: Will the New Pork Industry Call the Heartland Home?" Federal Reserve Bank of Kansas City, Economic Review (Third Quarter 1998), p. 79. 21 National Pork Producers Council, "1999/2000 Pork Facts," p. 12. Internet source: http://www.nppc.org/PorkFacts/2000PORKFA.pdf. 22 National Pork Producers Council, "1999/2000 Pork Facts," p. 12. Internet source: http://www.nppc.org/PorkFacts/ 2000PORKFA.pdf. 23 Drabenstott, p. 81. 24 National Pork Producers Council, "1999/2000 Pork Facts," p. 13. Internet source: http://www.nppc.org/PorkFacts/2000PORKFA.pdf. 25 Interview with Jeannie Gramstorff, Farnsworth, Texas, August 18, 1998. |
[ Health
] [ Finance
] [ Food
] [ Product
] [ Telecom
] [ Other
]
[ About
CU ] [ News
] [ Resources
] [ Tips
] [
Search ]
[ Home
]
Please contact us at: http://www.consumersunion.org/contact.htm
All information ©2000 Consumers Union