This past spring, as the nation monitored river levels in the Upper
Midwest to see if water would crest over thousands of carefully
laid sandbags, Margaret Millerbernd of Waverly, Minn., had her eye
on another potential flood. Soon enough, it came: An estimated 100,000
gallons of cow manure surged over the brim of a 9.5 million gallon
waste lagoon at nearby Metro Dairy. The brown liquid poured into
a county ditch that feeds a creek running through Millerbernd's
farm, just a thousand feet away.
A state regulatory body, the Minnesota Pollution Control Agency
(MPCA), was alerted, and an investigator affirmed that yes, indeed,
there was a problem. The dairy was ordered to block the spill, but
the efforthindered by ice on the creek's surfacewas
only partly successful. Gallons of manure continued toward the wetlands
of a state-owned wildlife management area near the Crow River and
the town of Montrose.
Over a month later, the state's investigation of the spill continued
as agency engineers tried to determine why the manure basinsjust
five years old and legally permittedhad been allowed to get
so full. Moreover, while no health problems have been linked to
the spill, officials are troubled that Metro Dairy employees didn't
report the spill when they first noticed it, as required by law,
a move that might have staunched the flow before it reached the
But in Millerbernd's view, the spill was pretty much inevitable.
The lagoons (there are two, with a total capacity of 15.5 million
gallons) are just too big, to her way of thinking. "When you've
got millions of gallons of manure and something goes wrong, it's
bound to be catastrophic," she said. And Millerbernd is not
a hypersensitive city slicker. She and her husband are retired dairy
farmers themselves, used to feeding cows, slopping hogs and cleaning
out barns. "It's just that it's much harder to manage that
The spill, moreover, is just part of the problem, in the eyes
of Metro Dairy's critics. Even if lagoons don't overflow, they say,
the waste leaches into the ground, contaminating aquifers and water
supplies. And the smell? "If you were out here today,"
said Millerbernd, "you would understand. They're emptying the
lagoons, and the smell is just horrific." Fear of such problems
moved Millerbernd and other neighbors to try to stop the expansion
of Metro Dairy back in 1996, but the MPCA reviewed the dairy's waste
management plan and found it adequate. The recent spill, said Millerbernd,
vindicates her early opposition.
It hits the fan
Millerbernd is hardly alone in her distaste for the smells and
spills associated with large livestock feedlots, often called concentrated
animal feeding operations (CAFOs). Disputes over feedlots have taken
center stage in the Minnesota Legislature at the last three sessions,
leading one observer to call it "the most contentious issue
in Minnesota agriculture." Elsewhere in the Ninth District,
legislators, regulators, livestock owners and environmentalists
are also at loggerheads over the issue, with court battles in South
Dakota, zoning disputes in North Dakota, legislative initiatives
in Montana and township tussles in Wisconsin. And the controversy
extends across the country. South Carolina's governor, for example,
imposed a temporary ban this April on new hog farms, and the Legislature
is considering an indefinite moratorium.
The conflict finds its heart in the increasing scale of the livestock
business in the United States. As is true for many industries outside
agriculture, the cattle, dairy, swine and poultry industries are
consolidating rapidly. Small operations are fading awayjust
as Millerbernd's didand midsize farms are expanding to increase
profitability by lowering costs through economies of scale. But
the increased scale means increased concentration of animal waste
and no cheap, easy and safe means of disposing of it.
In the anything-but-pungent terminology of economists, the problem
is one of externalities: costs generated by producers that are borne
by others. Some of these costs are difficult to quantify, but they're
as plain as the nose on your face. Other costs are easier to measure:
changes in property values if a feedlot moves in next door. But
feedlot owners say that communities derive benefits from large feedlots.
Feedlots provide jobs, for example, supply fertilizer to nearby
farmers and buy agricultural inputs from the local economy. A broader
economic argument for large feedlots: They deliver economies of
scale and lower product prices, and thereby increase overall economic
efficiency and social welfare. But that's only true, say critics,
if they clean up after themselves.
And then there's another complication: No one seems to agree whether
large feedlots actually pollute more than small ones. In other words,
given that 1,000 cows will create the same amount of manure wherever
they liveand assuming the willingness of their owners to clean
it upis it less costly to deal with that waste problem at
one big farm or at 10 small ones? The jury's still out.
Regulators at many levels have stepped into the messpromulgating
standards and complicated permit procedures that burden producers
and disappoint critics. And as few solutions
seem immediately apparent, it's likely that the stink over feedlots
will get worse before it gets better.
Fewer farms mean crowded cows
While the total number of feedlots in the nation or our district
remains vague (see sidebar), what is clear
is that animalsand therefore manureare being produced
on fewer and larger farms, and those larger farms are raising the
animals at increasing levels of confinement and concentration. "The
structure of animal agriculture has changed dramatically over the
last two decades," said a December 2000 U.S. Department of
Agriculture (USDA) study. "Small and medium-sized livestock
operations have been replaced by large operations at a steady rate.
The total number of livestock has remained relatively unchanged,
but more livestock are kept in confinement."
USDA figures show that the average size of cattle and calf farms
increased in all Ninth District states between 1987 and 1997. The
average size of swine operations has jumped even more dramatically.
For all district states combined, the number of farms with hogs
dropped by 56 percent over the decade, while the number of hogs
increased 3 percent, resulting in a 135 percent increase in average
hog farm size: climbing from 215 pigs in 1987 to 504 a decade later.
Accurate feedlot numbers don't exist, in part
because definitions vary from state to state, but also because
the industry is, in some sense, in its infancy. Farms have
always had animals, but large-scale concentrated animal
feeding operations are a relatively modern development.
And measuring both the number of operations and the quantity
of their byproducts appears to be problematic.
The Environmental Protection Agency (EPA)
estimates that 376,000 livestock operations confine animals
in the United States, generating about 128 billion pounds
of manure each year. A December 2000 U.S. Department of
Agriculture (USDA) analysis of the 1997 agricultural census
comes up with a very different figure: 529,658 livestock
operations with confined livestock producing 900 billion
pounds of manure. Obviously, it's been hard for the government
to get a handle on the problem.
Using the USDA figures, Ninth District states
(including all of Michigan and Wisconsin) have about 93,000
operations with confined livestock (17 percent of the nation's
total) producing 157 billion pounds of manure each year.
Whether USDA or EPA figures are closer to the mark, suffice
to say, we're full of it.
States, too, appear to have a poor handle
on total numbers of feedlots since they currently issue
permits to a limited portion of the total. Generally speaking,
only the largest operations (those with 1,000 "animal
units" or morean animal unit (AU) roughly defined,
is enough of a given species to produce as much manure as
does one head of cattle, so a horse is 2 AUs and a pig is
0.4 AUs) or those close to vulnerable bodies of water are
required to get permits. South Dakota has issued permits
for 115 feedlots but doesn't have an official estimate of
the total number. Montana has 72 permitted feedlots, but
no statewide inventory. Wisconsin believes that it has about
40,000 livestock operations, 86 of which are currently permitted.
Minnesota estimated in 1997 that it had 45,000 feedlots,
using a broad definition that included any animal confinement
area where a vegetative cover cannot be maintained. Of those,
16,000 had received MPCA permits and 23 received National
Pollution Discharge Elimination System permits, meaning
that they were large feedlots with the potential to discharge
into the state's waters.
Getting a handle on the feedlot controversy
will require an accurate count. South Dakota District III
recently received a grant to create a geographic information
system (GIS) database on feedlots. Montana's Farm Bureau
Federation is hoping for an EPA grant to create a Montana
inventory. And Minnesota just spent $400,000 to create its
own GIS feedlot inventory.
The reasons behind the trend are apparent. Livestock farmers are hoping
to lower average costs by specializing and growing, and they're doing
it with an eye to global competition. Paul Zimmerman, a corn, soy and
hog farmer in Waseca, Minn., recently decided to shift heavily into dairy
and just received a feedlot permit from the MPCA. "We see Brazil increasing
agricultural production 4, 6, 8 percent per year, and we know that long-term
up here in Minnesota, corn and soybeans is going to be tough being profitable
without a large infusion of government help," said Zimmerman, who
co-owns the farm with his brother and his cousin.
"Okay, how are we going to stay competitive in agriculture,
not against Joe down the road but José down on the next continent?
And we say, livestock production is still a way we can compete,
and dairy production particularly." Zimmerman crunched the
numbers, looking at efficiencies of labor and building design. "There
are economies of scale in any industry that you get into,"
he observed. "And 1,600 [cows] was a profitable cash-flow model
that we ran for here in the Midwest."
In addition, large livestock customersTyson, Cargill and
IBP, for exampleare increasingly seeking uniform inputs. By
contracting with large farmers and making explicit product requirements,
such customers encourage larger feedlots that produce relatively
uniform animals that meet their specified standards. Critics call
it factory farming, and animal rights activists say it's inhumane.
But as long as American consumers expect a Big Mac in Duluth to
taste like a Big Mac in Helena, the industry trend is unlikely to
It is the costs of such operationsor rather, those costs
not paid directly by the feedlot ownersthat are creating the
controversy. Critics of feedlots are usually those who live near
them, consider them blights on the community and often view feedlot
owners as noxious neighbors.
They complain of unbreathable air, lower property values and the
risk of biological contamination of local groundwater. They also
point to more global problems, including greenhouse gases produced
by animals and eutrophication of rivers, lakes and, increasingly,
the hypoxic "Dead Zone" in the Gulf of Mexico, thought
by many to be the result of excess nitrogen runoff from the Mississippi.
In the Ninth District, each of these arguments has been used to
defeator delaythe spread of feedlots.
In early 2001, when Heine Farms Inc., a family business with a
10,000-head cattle operation in Nebraska, sought a permit to build
a 20,000-head feedlot across the Missouri River in Yankton County,
S.D., the owners encountered a firestorm of opposition. "Don't
let huge feeding operations give family farms a black eye in the
clean air and water department," read a typical Yankton
Daily Press & Dakotan letter to the editor. Another protest
letter, signed by 16 physicians, warned of serious health threats
from excess livestock manure produced by "large corporate feedlots,"
including chemical and bacterial water pollution, "strong odors,
airborne particles and toxic gases."
The Heines said they're family farmers just trying to grow. "You've
got to expand to make it in this business," said Ron Heine.
And they rallied considerable support for their effort, including
South Dakota Agriculture Secretary Larry Gabriel and much of the
Yankton business community, not to mention the four local banks
that ran newspaper ads in favor of the feedlot.
But in March, Yankton residents voted 2-to-1 for an ordinance
that restricted feedlot size and established distance setbacks from
residences that effectively prohibited the Heine venture. The Nebraskans
immediately appealed to the courts and are still seeking South Dakota
For Julie Kenefick, a sheep farmer in western Wisconsin, the "bottom
line is the groundwater contamination." She has adamantly opposed
efforts by a local Pierce County dairy farmer to build a feedlot
near the Rush River because of the area's geological vulnerability
to manure leaching into the aquifer. And scientific studies reinforce
such concerns. A 1999 literature review conducted for the Minnesota
Environmental Quality Board concluded that because of its high nutrient
loads, feedlot runoff "can severely degrade surface water quality"
if not contained; similar work substantiates the risks of groundwater
But economics matter, too, said Kenefick. "If you look at
all of that land without proper drinking water," she said,
"what happens to valuation of that land? Leaving out even a
shred of interest in the environment and fish kill, just the dollars.
It seems to me that that's where policy could be more visionary."
In Waseca County, Minn., where the Zimmermans plan to expand their
dairy operation, property values are a prime concern. The county
assessor has designed a "smell location chart," which
factors in a home's proximity to a feedlot, the number of feedlot
units and the presence of a manure lagoon in order to arrive at
a write-down percentage for any given residence. A home within a
quarter mile of a feedlot with seven animal barns and a waste lagoon,
for example, would lose about 30 percent of its value.
(In March, the MPCA granted the Zimmermans a permit for their
operation, but a month later a group called Citizens Concerned for
Waseca County sued the agency and called for a full environmental
impact statement. One of the group's leaders is a relative of Paul
Zimmermanan indication of how divisive these battles can become.)
Others object to feedlots because they see them as harmful to
the local economy, replacing small farms with large animal factories.
Opposing the Heine expansion into South Dakota, Yankton magazine
publisher Bernie Hunhoff, a former state legislator, argued that
in addition to their environmental problems, large livestock operations
dominate local markets and create unfair competition. Many economists
would disagree with Hunhoff, pointing out that even large livestock
operations operate on thin marginshardly the mark of a monopolistic
Or fertile rainmakers?
It is precisely their economic contributions to the local community
that advocates point to when critics of feedlots try to stop them.
Advocates say that feedlots increase the value of livestock and
grain businesses, a benefit that farmers, and their communities,
would be foolish to ignore. By feeding local grains to local livestock,
feedlots add value and increase profits.
"If we can utilize some of the resources we have here in grains
and stuff,"said John Youngberg, a lobbyist with the Montana
Farm Bureau Federation, "then we can add a few cents to what
we get for [our cattle]." Selling Montana cattle to feedlots
in other states, then shipping off grain to feed them, is like giving
away your profits, he said. "We need to add some value before
[livestock] leaves the state if we're going to keep having a viable
Moreover, large feedlot operations spend money locally and create
jobs for local residents. "They represent a fairly significant
source of employment and a market for a lot of grain that we grow,"
said William Lazarus, an agricultural economist at the University
of Minnesota. Lazarus co-authored a 2000 study for the Minnesota
Pork Producers Association that found that the Minnesota pork industry
accounted for $2.2 billion in total farm and processing output and
$4.1 billion when industry "multiplier" effects were considered.
The Minnesota pork industry provided nearly 9,000 jobs on farms
and in processing plants, with 19,000 additional jobs dependent
on the industry.
South Dakota feedlot advocates point to similar effects. Doug Johnson
is on the board of a farmer cooperative trying to raise $2 million
to build a 20,000-head cattle feedlot in Moody County, near the
Iowa/Minnesota border. "Once we build," said Johnson,
"we create a tax base that's better for the townships and the
counties and their schools, and we create jobs for farmers and truckers
and builders, you name it. ... So to me, it's just a financial benefit
for the farmers. It's a value-added type business."
Critics dispute many of these claims, arguing that the employment
effects of feedlots are minimal and that most profits flow out of
local communities into corporate pockets. "We'd like to see
genuine value-added agriculture,"said Mark Trechock, staff
director of the Dakota Resource Council in Dickinson, N.D., which
supported campaigns for feedlot ordinances recently passed in Grand
Forks and Divide counties. "But...it doesn't help communities
when the profits from a so-called value-added industry are all going
out of state to some big corporation or to out-of-state investors,
and not staying in the community. Yes, there will be some jobs,
but they're low-end jobs."
Crux of the issue
In any given community, these oft-heard feedlot argumentsover
jobs lost or found, over virtues of small farms vs. large, over
grain sold locally or shipped across the borderhold definite
importance. But at the broader level, such issues are less critical.
After all, for the nation as a whole, it might be a more efficient
allocation of resources to produce all our beef products in just
a few states rather than try to preserve cattle operations throughout
much of the country. And improving the overall productivity of livestock
operationsa goal most would supportmight mean that fewer
people will be employed in the industry: fewer jobs but cheaper
meat. Similar trends occur whenever industries consolidate and become
So the heart of the matter, from a broad economic standpoint,
is determining how to provide society with the benefits of scale
economies in livestock operations while still guaranteeing that
producers pay the full costs of production. Or more explicitly,
the challenge for policymakers is to ensure that as livestock producers
grow larger and larger (a trend that seems likely to continue given
the economies involved), they don't shift the burden of their pollution
to their local community, county, state or beyond. Ultimately, then,
policy would assure that the price of the final productbe
it bacon, burger or broilerreflects the cost of producers
cleaning up after themselves.
Lawmakers in the Ninth District have an uneven record in creating
such policy, and their difficulties doubtless reflect the contentious
nature of the issue. This is a debate both bitter and complex, evidently
capable of tearing apart families, neighbors and counties. But in
their attempts to deal with the dispute, states and communities
have generated a slew of ordinances, zoning regulations, permitting
procedures and legislation to govern the environmental impact of
North Dakota, for example, issued a model zoning ordinance for
animal feeding operations in March 2000 through its state health
department, and several counties around the state have since adopted
or considered it. South Dakota has developed state permitting procedures
for both hog and other livestock operations that require feedlots
to discharge no waste into water systems. Wisconsin's Department
of Natural Resources regulates large livestock operations and reports
an increase in the number of operations applying for permits. Last
April, the town of Porter, in south-central Wisconsin, cited environmental
concerns in denying a local permit for what would have been a 2,850-cow
A Montana legislator drafted a tough bill for the 2001 session
that would have regulated animal feeding operations with liquid
animal-waste management systemsaimed at swine CAFOs. But she
decided not to introduce it when a far less controversial feedlot
measure faced substantial opposition from lawmakers and lobbyists
who felt measures to regulate the livestock industry would inhibit
its viability. The former administration's economic development
plan highlighted Montana's pork industry as a vital front for growth,
and many observers anticipate it will remain a favorite in the current
Of Ninth District states, Minnesota has taken the most vigorous
approach to the issue. At the direction of the 1998 state Legislature,
the state's Environmental Quality Board launched an extensive study
of the impact of animal agriculture and feedlots on the state's
economy, health, environment and quality of life, beginning with
a literature review that runs 1,500 pages. The study is due for
completion in December 2001, and its authors hope to accurately
inventory the number and size of all the state's feeding operations
and, more importantly, to come to some level of consensus about
the complicated social, economic and environmental issues in play.
"I guess the Legislature can choose to pay attention to it
or not," noted University of Minnesota professor Lazarus, but
he hopes the final study will calm the waters in future Minnesota
feedlot debates. "It might somewhat constrain people in the
future, because [it will say that] this is more or less agreed on,"
In addition, the state developed a new set of feedlot regulations,
hammered out in intensive statewide meetings with stakeholders and
agency officials and then batted about in the Legislature. The new
regs are considerably tougher than previous standardsthough
not as tough as feedlot critics wantedand this year's Legislature
designated funds to help small feedlot owners upgrade their facilities
to bring them into compliance. But some say compliance is unlikely
to be strictly monitored if the Legislature also follows through
on its threat to cut funding to the MPCA, the state agency charged
with enforcing feedlot regulations.
The feds step in
Just two months after Minnesota issued its new feedlot regulations
and prepared to implement them, the EPA announced that it, too,
had developed a new set of standards. To put it mildly, Minnesota
officials weren't pleased. "It just doesn't make a lot of sense,"
said Perry Aasness, Minnesota's assistant agricultural commissioner.
"Here we just went through some fairly rigorous development
of feedlot rules in Minnesota and now EPA's coming in and saying,
well, we want these additional ones put on." Aasness said the
new EPA standards would require that far more feedlots be regulated.
State officials elsewhere in the Ninth District have also expressed
their displeasure with the rules.
But the EPA proposals were developed by the Clinton administration.
President Bush's agriculture secretary indicated that she's interested
in reopening discussions on national feedlot standards, and the
EPA extended the comment period on the EPA rules until July 30.
Costs of compliance
The difficulty of resolving the feedlot controversy reflects in
part the confusion over the many issues that get wrapped together
in any discussion of feedlot costs and benefits. Extraneous, if
important, questions about job creation or tax bases tend to muddy
the waters. But the central question will remain how to ensure that
as livestock operations grow larger, they pay the costs of their
externalities, either through adherence to sound environmental regulations
or even through direct taxation so that municipalities are compensated
for the costs they must bear.
Surprisingly, though, very little empirical research has been
done on the actual costs of livestock operation compliance with
environmental regulations, according to the exhaustive literature
review done for Minnesota's Legislature. "One reason for the
dearth of work on this area may be that the regulations are evolving
so rapidly and vary so much," noted the review. One study showed
that general economic variables had more influence on hog operations
than did costs of compliance with environmental regulations. Another
said that large dairies could afford the costs of compliance more
easily than smaller ones.
Other analysts suggest that as standardized environmental regulations
on feedlots are implemented at the federal level, livestock operations
will increasingly decide where to locate based on local community
reactions. That is, only communities that actively welcome feedlots
(for the jobs they might offer, or tax-base benefits) will become
home to them. It's an outcome that makes sense, but whether it will
make peace is another matter.
One rural economy that initially sought the benefits of a large-scale
hog operation was the Rosebud Sioux Indian Reservation. Tribal leaders,
eager for jobs promised by developers, signed a contract in 1998
with Sun Prairie, a subsidiary of North Dakota's Bell Farms, to
build the nation's third-largest hog farm on tribal lands in South
Dakota. Sun Prairie built 24 hog barns, but in 1999 a newly elected
tribal council announced its opposition to the project. The Bureau
of Indian Affairs also withdrew its support, called for a full environmental
impact statement and canceled its lease. Sun Prairie sued the BIA,
and the tribal council subsequently issued an order stopping all
work on Sun Prairie's next building phase, another 24 barns.
The tangled dispute stands before the U.S. Circuit Court of Appeals.
But whatever the court decides, the Rosebud Sioux now seem unlikely
to be hospitable hosts to a 1,200 acre complex that could eventually
raise about a million pigs a year. "Economic development is
something we need," said tribal activist Oleta Mednansky, who
contends that the operation will disturb ancient Sioux gravesites,
"but not the kind that will destroy our land, air, water, wildlife
and historical artifacts."
Pigs might fly
Ultimately, resolution of the feedlot issue will depend not on
counting the number of jobs created or the cross-border flow of
grain and calves, but on implementing the most efficient scale of
production once costs of feedlot externalities are incorporated
into the equation. Again, little empirical research exists on this
Some observers believe that campaigns by environmentalists to
force producers to internalize more of the actual costs of concentrated
livestock production may actually encourage further concentration
in the livestock industry. Amon Baer, owner of the Baer Brothers
egg farm operation in Clay County, Minn., and president of the North
Dakota Pigs Cooperative, says the cost of adhering to stringent
environmental requirements tends to push smaller farmers out of
businessthey can't afford the expenses of hiring an engineer,
filing environmental worksheets, building leak-tight manure lagoons
and testing water supplies and air quality. "I think that part
of the goal of the environmental movement is to maintain the smaller-sized
family farm," said Baer. "But the more stringent they
succeed in making the regulations, the more they drive the industry
to the economies of scale and size."
Indeed, when the Zimmermans of Waseca ran the numbers on their
dairy operation, they factored in the costs of filing for the environmental
permits. "We've got upwards to $70,000 in the environmental
review process," Zimmerman noted. "And so are you going
to spread that over a 200-cow operation or are you going to spread
that $70,000 over a 1,600-cow operation?"
South Dakota farmer Doug Johnson contends that large feedlots can
actually be better for the environment than smaller livestock operations.
"From our point of view, we're taking 20,000 head of cattle
off the river in farm lots and pasture and putting them on a controlled
area that allows no runoff. ... We have to meet all the environmental
standards ... so that makes it a lot more environmentally friendly
than what's going on now."
Feedlot critics counter this, saying that large feedlots concentrate
too many animals in one location, exceeding the capacity of nearby
lands to assimilate waste nutrients, resulting in polluting runoffs.
In addition, they say, large feedlot technologies like waste lagoons,
which combine water with manure, create environmental risks not
posed by small animal farms which tend to use solid-waste handling
methods rather than lagoons.
Feedlot supporters then argue that regardless of what the environmental
dangers may be, it is far easier and cheaper for regulators to monitor
and enforce regulations at a few large facilities rather than at
countless small ones.
Ultimately, this debate, too, comes down to an economies-of-scale
problem. Clearly there are some scale economies in livestock production
when environmental costs are ignored by the feedlot owner. Do they
disappear when operators are forced to pay their full costs? Or
are there also economies of scale in handling animal waste?
The research has yet to reach answers to these questions.
At least one economist argues that the most efficient scale for
livestock operation is considerably smaller than the large feeding
operations now being built, and he argues that the trends point
toward a gradual decline of American livestock production. "I
can't find anything [in the data] which shows much of an increase
[in efficiency] after you get past about [a] 650-sow farrow-to-finish
operation, which is a fairly small operation," said Colorado
College economist William Weida.
And Weida said that the high cost of implementing stringent environmental
regulations will force even large feedlots out of business, pushing
livestock processors toward foreign suppliers whose governments
might not consider the environmental costs. "They'll go overseas,
because there the situation is ideal," said Weida. "There
are lots of countries where there's virtually no cost of handling
the waste at all. You can flush it wherever you want to."