CAFOs Uncovered - Union of Concerned Scientists

CAFOs UncoveredThe Untold Costs of ConfinedAnimal Feeding OperationsDoug Gurian-ShermanU N I O N O F C O N C E R N E D S C I E N T I S T SA P R I L 2 0 0 8

ii Union of Concerned Scientists© 2008 Union of Concerned ScientistsAll rights reservedDoug Gurian-Sherman is a senior scientist in theUnion of Concerned Scientists (UCS) Food andEnvironment Program.e Union of Concerned Scientists is the leadingscience-based nonprofit working for a healthyenvironment and a safer world.e goal of the UCS Food and EnvironmentProgram is a food system that encouragesinnovative and environmentally sustainable waysto produce high-quality, safe, and affordable food,while ensuring that citizens have a voice in howtheir food is grown.More information about the Union of ConcernedScientists and the Food and Environment Programis available on the UCS website at www.ucsusa.org.e full text of this report is available online(in PDF format) at www.ucsusa.org or may beobtained from:UCS PublicationsTwo Brattle SquareCambridge, MA 02238-9105Or, email pubs@ucsusa.org or call (617) 547-5552.COVER PHOTOS:David Michalak, www.huntingtoncreative.com(steak), Farmsanctuary.org (pigs),istockphoto (money), Farmsanctuary.org (chickens) ,Rick Dove, www.doveimaging.com andwww.neuseriver.com (fish)DESIGN: Penny Michalak (designmz.com)Printed on recycled paper using soy-based inks

iv Union of Concerned ScientistsF I G U R E S A N D T A B L E SFigures1. U.S. Hog Inventory on the Largest Farms 142. Number of U.S. Hog Operations and Hog Inventory 153. Federal EQIP Funding for 2006 434. Counties Eligible for EQIP Subsidies in Georgia’s Poultry Litter Transfer Program, 2006 445. Average Atmospheric Ammonium Ion Concentration, 1985–2002 456. Wet Deposition of Ammonium Nitrogen, 2002 457. Wet Deposition of Ammonia and Nitrate Nitrogen, 2002 468. Geographic Concentration of Hog Production, 1997–2002 469. Geographic Concentration of Dairy Cows, 1997–2002 4710. Geographic Concentration of Broiler Production, 1997–2002 4711. CAFO Manure Lagoon 4812. Environmental Danger of CAFOs 4813. CAFO Manure Pile 4814. CAFO Manure Lagoon 4815. Unsanitary Conditions in Cattle CAFO 4916. Alternative Cattle Production 4917. Crowding in Chicken CAFO 4918. Alternative Poultry Production 4919. Crowding in Hog CAFO 5020. Hog Hoop Barn 5021. Alternative Pork Production 50TablesES-1. CAFO Costs Underwritten by U.S. Taxpayers 61. Number of Livestock Operations by Size, 1982–1997 162. Number of Animals by Operation Size, 1982–1997 163. Percent of Livestock Production under Contract by Sector 214. Percent of Animals Slaughtered in Large Plants 225. Indirect Subsidies to the CAFO Industry, 1997–2005 346. Comparison of Subsidies for CAFOs and Diversified Farms 35

CAFOs UncoveredvA C K N O W L E D G M E N T Sis report was made possible through the financialsupport of e Cedar Tree Foundation, e DeerCreek Foundation, e Educational Foundation ofAmerica, e David B. Gold Foundation, Newman’sOwn Foundation, and UCS members.e report was greatly informed by Dr. Silvia Secchiof Southern Illinois University, who provided insightson economic matters concerning the livestockindustry and also reviewed parts of the text. Wewere similarly fortunate to receive research contributionsand perspectives from Elanor Starmer of theGlobal Development and Environment Institute(GDAE) at Tus University. We also thank Dr. KateClancy for her helpful thoughts and suggestions.We are grateful for the reviews provided byDr. Mark Honeyman of Iowa State University,Dr. Michael Mallin of the University of North Carolina,Dr. William Weida of Colorado College andthe Global Resource Action Center for the Environment(GRACE), and Timothy A. Wise of the GDAEat Tus University. Each offered invaluable commentsthat greatly improved the report, but we mustnote that their willingness to review the materialdoes not necessarily imply an endorsement of thereport or its conclusions and recommendations.Here at the Union of Concerned Scientists, a greatdeal of appreciation is due to Margaret Mellon,without whose patience, counsel, and many contributionsthis report would not have been possible.anks are also due to Stanback interns ElizabethWillets and Pei Yen for research contributions, JaneRissler and Heather Sisan for logistical and otherhelp, and Julie MacCartee for research assistance.We would also like to thank Bryan Wadsworth forcopyediting, Heather Tuttle for coordinating printproduction, and Penny Michalak for designand layout.

CAFOs Uncovered 1EXECUTIVE SUMMARYThe livestock industry (including poultry) is vitalto our national economy, supplying meat, milk,eggs, and other animal products and providingmeaningful employment in rural communities. Untilrecently, food animal production was integrated withcrop production in a balanced way that was generallybeneficial to farmers and society as a whole. Butlivestock production has undergone a transformationin which a small number of very large CAFOs(confined animal feeding operations) predominate.ese CAFOs have imposed significant—but largelyunaccounted for—costs on taxpayers and communitiesthroughout the United States.CAFOs are characterized by large numbers ofanimals crowded into a confined space—an unnaturaland unhealthy condition that concentrates toomuch manure in too small an area. Many of thecostly problems caused by CAFOs can be attributedto the storage and disposal of this manure and theoveruse of antibiotics in livestock to stave off disease.e predominance of CAFOs is not the inevitableresult of market forces; it has been fosteredby misguided public policy. Alternative productionmethods can be economically efficient and technologicallysophisticated, and can deliver abundant animalproducts while avoiding most of the problemscaused by CAFOs. However, these alternatives are ata competitive disadvantage because CAFOs have reducedtheir costs through subsidies that come at thepublic’s expense, including (until very recently) lowcostfeed. CAFOs have also benefited from taxpayersupportedpollution cleanup programs andtechnological “fixes” that may be counterproductive,such as the overuse of antibiotics. And by shiingthe risks of their production methods onto the public,CAFOs avoid the costs of the harm they cause.In addition, the fact that the meat processing industryis dominated by a few large and economicallypowerful companies makes it difficult for alternativeproducers to slaughter their animals and get theirproducts to market. is excessive market concentrationis facilitated by lax enforcement of laws intendedto prevent anti-competitive practices.By describing several of the subsidies and otheroen hidden costs of CAFOs that are imposed onsociety (referred to as externalized costs or “externalities”),this report attempts to clarify the realprice we pay—and can no longer afford—for thisharmful system. ese externalities are associatedwith the damage caused by water and air pollution(along with cleanup and prevention), the costsborne by rural communities (e.g., lower propertyvalues), and the costs associated with excessive antibioticuse (e.g., harder-to-treat human diseases).Subsidies have included payments to grain farmersthat historically supported unrealistically low animalfeed prices, and payments to CAFOs to preventwater pollution.e United States can do better. In fact, there isa new and growing movement among U.S. farmersto produce food efficiently by working with naturerather than against it. More and more meat anddairy farmers are successfully shiing away frommassive, overcrowded CAFOs in favor of modernproduction practices. We offer a number of policyrecommendations that would level the playing fieldfor these smart, sophisticated alternatives by reducingCAFO subsidies and requiring CAFOs to pay afair share of their costs.

2 Union of Concerned ScientistsCAFOs—Too Big for Our Own GoodMost of the problems caused by CAFOs result fromtheir excessive size and crowded conditions. CAFOscontain at least 1,000 large animals such as beefcows, or tens of thousands of smaller animals suchas chickens, and many are much larger—with tensof thousands of beef cows or hogs, and hundreds ofthousands of chickens.e problems that arise from excessive size anddensity (e.g., air and water pollution from manure,overuse of antibiotics) are exacerbated by the paralleltrend of geographic concentration, wherebyCAFOs for particular types of livestock have becomeconcentrated in certain parts of the country.For example, large numbers of swine CAFOs arenow located in Iowa and North Carolina, dairyCAFOs in California, and broiler chicken CAFOs inArkansas and Georgia.We need to be concerned about these excessivelylarge feeding operations because they have becomethe predominant means of producing meatand dairy products in this country over the past fewdecades. Although they comprise only about 5 percentof all U.S. animal operations, CAFOs now producemore than 50 percent of our food animals.ey also produce about 65 percent of the manurefrom U.S. animal operations, or about 300 milliontons per year—more than double the amount generatedby this country’s entire human population. Forthe purposes of this report, there are approximately9,900 U.S. CAFOs producing hogs, dairy cows, beefcows, broiler chickens, or laying hens.Better Options ExistCAFOs do not represent the only way of ensuringthe availability of food at reasonable prices. Recentstudies by the U.S. Department of Agriculture(USDA) show that almost 40 percent of mediumsizedanimal feeding operations are about as costeffectiveas the average large hog CAFO, and manyother studies have provided similar results.Medium-sized and smaller operations also avoid orreduce many of the external costs that stemfrom CAFOs.If CAFOs are not appreciably more efficientthan small and mid-sized operations, why are theysupplanting smaller farms? e answers lie largelyin farm policies that have favored large operations.CAFOs have relied on cheap inputs (water, energy,and especially feed) to support the high animal densitiesthat offset these operations’ high fixed costs(such as buildings). Feed accounts for about 60 percentof the costs of producing hogs and chickensand is also an important cost for dairy and beefcows, and federal policies have encouraged the productionof inexpensive grain that benefits CAFOs.Perhaps even more important has been the concentrationof market power in the processing industryupon which animal farmers depend. isconcentration allows meat processors to exert considerableeconomic control over livestock producers,oen in the form of production contracts andanimal ownership. e resulting “captive supply”can limit market access for independent smallerproducers, since the large majority of livestock areeither owned by processors or acquired under contract—andprocessors typically do not contract withsmaller producers. Federal government watchdogshave stated that the agency responsible for ensuringthat markets function properly for smaller producersis not up to the task.Hoop barns and smart pasture operationsAlthough there is evidence that confinement operationssmaller than CAFOs can be cost-effective andproduce ample animal products, studies also suggestthat sophisticated alternative means of producinganimal products hold even greater promise. For example,hog hoop barns, which are healthier for theanimals and much smaller than CAFOs, can producecomparable or even higher profits per unit atclose to the same price.Research in Iowa (the major hog-producingstate) has also found that raising hogs on pasturemay produce animals at a lower cost than CAFOs.Other studies have shown that “smart” pasture oper-

4 Union of Concerned Scientistsof raw manure into streams and estuaries and killingmillions of fish. Smaller but more numerous spillscause substantial losses as well.Remediation of the leaching under dairy andhog CAFOs in Kansas has been projected to costtaxpayers $56 million—and Kansas is not one of thecountry’s top dairy- or hog-producing states. Basedon these data, a rough estimate of the total cost ofcleaning up the soil under U.S. hog and dairyCAFOs could approach $4.1 billion.The two primary pollutants from manure, nitrogenand phosphorus, can cause eutrophication(the proliferation and subsequent death of aquaticplant life that robs freshwater and marine environmentsof the oxygen that fish and many otheraquatic organisms need to survive). For example,runoff and leaching from animal sources includingCAFOs is believed to contribute about 15 percentof the nutrient pollution that reaches the Gulf ofMexico, where a large “dead zone”—devoid of fishand commercially important seafood such asshrimp—has developed. CAFO manure also contributesto similar dead zones in the ChesapeakeBay (another important source of fish and shellfish)and other important estuaries along the EastCoast. The Chesapeake Bay’s blue crab industry,which had a dockside value of about $52 million in2002, has declined drastically in recent years alongwith other important catches such as striped bass,partly due to the decline in water quality caused inpart by CAFOs.Although it is difficult to account for all of thesocial benefits (such as fisheries and drinkingwater) lost due to CAFO pollution, it is reasonableto assume the losses are substantial. One indirectway of estimating such costs is to calculate the costof preventing some or all of the pollution causedby CAFOs. The USDA, for example, has determinedhow much it would cost to transport manureto enough crop fields or pastures to complywith new Clean Water Act rules governing the distributionof manure on fields. Based on a nitrogenlimitedstandard and realistic estimates of the rateat which farms will accept manure, the annual costof adequate manure distribution in the ChesapeakeBay region alone would total $134 million per year.Using a phosphorus-limited standard and an unrealisticallyhigh manure acceptance rate, the costwould be $153 million annually. Considering thatnet returns for the animal industry in this regionamount to $313 million, compliance with suchstandards could comprise between 43 and 49 percentof net returns.Air pollution from manureAirborne ammonia is a respiratory irritant and cancombine with other air pollutants to form fine particulatematter that can cause respiratory disease.And because ammonia is also re-deposited onto theground, mostly within the region from which itoriginates, ammonia nitrogen deposited on soilsthat have evolved under low-nitrogen conditionsmay reduce biodiversity and find its way into watersources. Ammonium ion deposition also contributesto the acidification of some forest soils.Animal agriculture is the major contributor ofammonia to the atmosphere, and the substantialmajority of this ammonia likely comes from confinementoperations, since manure deposited bylivestock on pasture contributes proportionatelymuch less ammonia to the atmosphere than manurefrom CAFOs. Up to 70 percent of the nitrogen inCAFO manure can be lost to the atmosphere dependingon manure storage and field applicationmeasures. Over the past several decades, theamount of airborne ammonia deposition in manyareas of the United States with large numbers ofCAFOs has been rising dramatically, and may oenexceed the capacity of forests and other environmentsto utilize it without harm.e USDA has estimated the total U.S. cost ofcontrolling air and water pollution through manuredistribution onto farmland—in quantities that complywith the Clean Water Act—at $1.16 billion peryear under high manure acceptance rates. However,the standard applied in this calculation would onlyreduce airborne ammonia pollution from CAFOs byabout 40 percent. And if lower, more realistic ma-

CAFOs Uncovered 5nure acceptance rates were used, the manure wouldhave to be transported unacceptable distances.erefore, proper manure disposal from CAFOs atcurrent farmer acceptance rates would in all likelihoodexceed these values considerably.Harm to rural communitiesCAFOs are sited in rural communities that bear thebrunt of the harm caused by CAFOs. is harm includesthe frequent presence of foul odors and watercontaminated by nitrogen and pathogens, as wellas higher rates of respiratory and other diseasescompared with rural areas that are not locatednear CAFOs.One study determined that each CAFO in Missourihas lowered property values in its surroundingcommunities by an average total of $2.68 million. Itis not possible to accurately extrapolate this valuenationally due to the many differences between localities,but as a very rough indication of the magnitudeof these costs, multiplying by 9,900 (the totalnumber of U.S. CAFOs as defined for this report)would yield a loss of about $26 billion.Antibiotic-resistant pathogensEstimates have suggested that considerably greateramounts of antibiotics are used for livestock productionthan for the treatment of human disease inthe United States. e massive use of antibiotics inCAFOs, especially for non-therapeutic purposessuch as growth promotion, contributes to the developmentof antibiotic-resistant pathogens that aremore difficult to treat.Many of the bacteria found on livestock (such asSalmonella, Escherichia coli, and Campylobacter) cancause food-borne diseases in humans. Furthermore,recent evidence strongly suggests that some methicillin-resistantStaphylococcus aureus (MRSA) anduropathogenic E. coli infections may also be causedby animal sources. ese pathogens collectivelycause tens of millions of infections and many thousandsof hospitalizations and deaths every year.e costs associated with Salmonella alone havebeen estimated at about $2.5 billion per year—about88 percent of which is related to premature deaths.Because an appreciable degree of antibiotic resistancein animal-associated pathogens is likely due tothe overuse of antibiotics in CAFOs, the resultingcosts are likely to be high. Eliminating the use of antibioticsfor growth promotion (the majority ofwhich occurs on CAFOs) could cost CAFOsbetween $1.5 billion and $3 billion per year.Conclusions and Recommendationse costs we pay as a society to support CAFOs—inthe form of taxpayer subsidies, pollution, harm torural communities, and poorer public health—ismuch too high (Table ES-1, p. 6). For example, conservativeestimates of grain subsidies and manuredistribution alone suggest that CAFOs would haveincurred at least $5 billion in extra production costsper year if these expenses were not shied onto thepublic. e figure would undoubtedly be muchhigher if truly adequate manure distribution was required.Although we do not have good national datafor other costs quantified in Table ES-1, and somethat have not been quantified (such as water and energyuse and water purification costs), they couldamount to billions of dollars more per year.Technological solutions to specific CAFO problemshave been proposed, such as feed formulationsthat would reduce manure nitrogen, lagoon coversthat would reduce atmospheric ammonia, and “biogas”capture and production that would reducemethane emissions from manure, but these are onlypartial solutions and would generally add to the costof production. None of these technologies solve antibioticresistance, loss of rural income, or theethical treatment of animals. By comparison, sophisticatedCAFO alternatives can provide plentifulanimal products at similar prices, but with muchfewer of the problems caused by CAFOs.e bottom line is that society is currently proppingup an undesirable form of animal agriculturewith enormous subsidies and a lack of accountabilityfor its externalized costs. Once we appreciate therole these subsidies—along with government

6 Union of Concerned ScientistsTable ES-1. CAFO Costs Underwritten by U.S. Taxpayers 1Cost of Pollution orPollution AvoidanceCost to Distribute andApply Manure to Fields $1.16 billion/year 2Reduction in Property Values $26 billion (total loss) 3Public Health Costs from Overuseof Antibiotics in Livestock $1.5 billion – $3.0 billion/year 4Remediation of Leakage fromManure Storage Facilities(Swine and Dairy) $4.1 billion (total cost) 5Cost of SubsidyGrain Subsidies for Livestock Feed $3.86 billion/year 6EQIP Subsidy $100 million – $125 million 71Numbers are rough estimates of current or recent costs and are presented only to indicate the magnitude of these costs. See the text for details.2SOURCE: Aillery et al. 2005.3SOURCE: Mubarak, Johnson, and Miller 1999. Extrapolation from Missouri data based on national CAFO numbers.4SOURCE: NRC 1999. Extrapolation based on U.S. population of 300 million.5SOURCE: Volland, Zupancic, and Chappelle 2003. Extrapolation from Kansas data based on national swine and dairy CAFO numbers.6SOURCE: Starmer 2007. Data averaged over the period 1996–2005.7SOURCE: NRCS 2003. Calculations based on NRCS projections for 2007 (yearly values increase from a low in 2002 to a high in 2007).policies—play in shaping the way our food animalsare raised, we can also see the environmental,health, and economic benefits to be gained fromredirecting agriculture toward smart pasture operationsand other desirable alternatives.Public policies that support CAFOs at the expenseof such alternatives should be eliminated, andpolicies that support these alternatives should beimplemented. Needed actions include:• Strict and vigorous enforcement of antitrust andanti-competitive practice laws under the Packersand Stockyards Act (which cover captive supply,transparency of contracts, and access to openmarkets)• Strong enforcement of the Clean Water Act as itpertains to CAFOs, including improved oversightat the state level or the takeover of responsibilitiescurrently delegated to the states forapproving and monitoring and enforcement ofNational Pollution Discharge Elimination System(NPDES) permits; improvements could includemore inspectors and inspections, bettermonitoring of manure-handling practices, andmeasurement of pollution prevention practices• Development of new regulations under theClean Air Act that would reduce emissions ofammonia and other air pollutants from CAFOs,and ensure that CAFO operators cannot avoidsuch regulations by encouraging ammoniavolatilization• Continued monitoring and reporting of ammoniaand hydrogen sulfide emissions as requiredunder the Comprehensive Environmental Response,Compensation, and Liability Act(CERCLA, commonly referred to as the “Superfund”)and the Emergency Planning andCommunity Right-to-Know Act (EPCRA)• Replacement of farm bill commodity crop subsidieswith subsidies that strengthen conservationprograms and support prices when suppliesare high (rather than allowing prices to fallbelow the cost of production)• Reduction of the current $450,000 EQIP project capto levels appropriate to smaller farms, with a focuson support for sound animal farming practices• Revision of slaughterhouse regulations to facilitatelarger numbers of smaller processors, includingthe elimination of requirements not

CAFOs Uncovered 7appropriate to smaller facilities, combined withpublic health measures such as providing adequatenumbers of federal inspectors or empoweringand training state inspectors• Substantial funding for research to improvealternative animal production methods (especiallypasture-based) that are beneficial to the environment,public health, and rural communities

draw precise conclusions was beyond the scope ofthis report, but even when limited to the availablenational data, a glimpse of the large scale of CAFOsubsidies is possible.Alternatives to CAFOs are many and diverse.ey include smaller feeding operations; pasturebasedcattle, swine, and poultry; and swine hoopbarns. Even these alternatives receive some subsidies;in particular, systems that use feed grain mayhave received some of the indirect grain subsidiesthat CAFOs have received. However, some alternativeshave not received these subsidies, and mosthave received proportionately less than CAFOs. Alternativesdo not receive several important directsubsidies (e.g., for manure transport), and they donot produce the degree of water pollution, air pollution,antibiotic-resistant organisms, health costs, orharm to rural communities that CAFOs do, thusgreatly reducing the costs the public must bear.Depriving CAFOs of their subsidies could helplevel the playing field, but would not necessarily ensurethe success of alternative systems. In manyways subsidies are appropriate in agriculture—providedthe public gets the desired benefits in returnfor its investment.CAFOs Uncovered 11

14 Union of Concerned Scientistshowever, it can be prohibitively expensive to transportthe manure beyond a short distance. Disposalmay therefore be accomplished by pumping the liquefiedmanure onto nearby “sprayfields” (a practicethat can only distribute manure over a relativelyshort distance), or by trucking it a greater distance(which adds additional expense).e weight of CAFO manure is due to the mixingof urine and feces, which forms a slurry that ismostly liquid, and additional liquid is oen addedwhen manure is flushed with water into storage facilitiessuch as lagoons. Placing a large number ofanimals in a small space oen means that more manureis produced than can be properly disposed ofon fields close to the CAFO.Other problems stem from the density of theanimals in individual operations. High-density confinementmeans that animals may be exposed totheir own manure, which is typically collectedwithin the stocking facilities, oen aer droppingthrough slatted floors. e manure can harbor andspread disease-causing organisms, and gases such asammonia and hydrogen sulfide emitted from themanure can be harmful to both animals and workers.CAFOs also release these harmful products intothe surrounding air and water, causing problems farbeyond the facility itself.Large manure storage facilities are oen requiredbecause the application of manure to fields isoen restricted to certain times of the year (e.g.,when the ground is not frozen). Such storage facilitiesraise additional environmental concerns. eycan overflow or collapse, sending unprocessed manureinto surface water, killing fish and contributingto degradation of the aquatic environment. Waterpollution can also occur due to leakage through theground under the storage facility, contaminatinggroundwater supplies such as wells and aquifers. Finally,these facilities also emit gases, especially ammonia,that cause air pollution and global warming.CAFOs Are Getting BiggerIt should be acknowledged that many CAFOs aremuch larger than the lower limit recognized by theEPA. is is illustrated for hog production in Figure 1,which shows the percent of hogs produced at operationslarger than 2,000 head and 5,000 head (doublethe minimum CAFO size) from 1994 to 2001(McBride and Key 2003). Over 50 percent of totalFigure 1. U.S. Hog Inventory on the Largest Farms80PERCENT OF TOTAL U.S. INVENTORY70605040302010+Operations with 2,000+ headOperations with 5,000+ head01994 1995 1996 1997 1998 1999 2000 2001Operations with 5,000+ head were not reported prior to 1996.SOURCE: McBride and Key 2003.

CAFOs Uncovered 15Figure 2. Number of U.S. Hog Operations and Hog Inventory250,0008075OPERATIONS200,000150,000100,00050,000OperationsInventory7065605550INVENTORY (MILLION OF HEAD)4501994 1995 1996 1997 1998 1999 2000 200140An operation is any place having one or more hogs on hand at any time during the year.SOURCE: McBride and Key 2003.hog production occurred on CAFOs with morethan 5,000 hogs by 2001. e average hog CAFOin the EPA’s southern seaboard region held morethan 12,000 head per year in 2004 (McBride andKey 2007).On the other hand, as illustrated in Figure 2, thetotal number of swine in the United States remainedabout the same over this time period, demonstratingthat increased size of operations was not requiredto supply the domestic demand for pork.Between 1994 and 2001, the number of hog operationsfell by more than 50 percent. Between 1982and 2006, the number of hog operations fell by afactor of almost 10, from just under 500,000 toabout 60,000 (NASS 2007).e total number of beef cattle produced in theUnited States has declined somewhat over the pastseveral decades, while broilers have increased dramatically.Between 1966 and 2006, the amount ofbroiler meat produced in the United States increasedby about 500 percent.e proportion of animals produced on CAFOshas increased greatly over the past several decades,and the geographic distribution of CAFOs has alsobecome more concentrated. Despite the fact thatmany smaller livestock operations remain, theirnumbers have been falling dramatically (Table 1,p. 16), 7 and CAFOs are now responsible forproducing much of the animal products soldin the United States.Table 2 (p. 16) shows the number of animalsraised by operations of different sizes in the UnitedStates. 8 e much greater size of animal operationsover 1,000 AU compared with smaller operationsmeans that even though there are many fewer largeoperations, they produce more animals than anyother size class as of 1997 (although medium-sizedoperations continue to produce a substantial numberof animals). Large CAFOs clearly have been replacingother ways of raising livestock.Nevertheless, the fact that there are still manyoperations of small and medium size suggests that7 About 92 percent of all operations larger than 1,000 AU are confined operations (Kellogg et al. 2000).8 About 16 million AU are raised in CAFOs; therefore about 35 percent of all AU at large operations are unconfined. However, about 7.3 million AU on theselarge unconfined operations are in categories other than feedlot beef cows or dairy cows (Kellogg et al. 2000). e overwhelming majority of these are likely tobe cow-calf operations with animals on range or pasture, and virtually all beef calves over 500 lb. from these operations are eventually transferred to feedlotCAFOs. Excluding these cows, about 91 percent of all animals at operations larger than 1,000 AU are in confined operations, including virtually all large beefcattle- and swine-finishing operations, and virtually all chicken operations.

16 Union of Concerned ScientistsTable 1. Number of Livestock Operations by Size,* 1982–1997FarmSize Category1982 1987 1992 1997 Percent Change1982 to 1997Less Than 25 Total AU 660,425 577,488 496,206 474,335 -2825 to

CAFOs Uncovered 17tages against disadvantages such as the pollutioncaused by animal waste.To assess the efficiency of CAFOs we must firstchoose one of several possible definitions. Onemeasure of efficiency is costs per unit of production.ese costs typically include labor, materials, andenergy, but CAFOs also cause harm to the environmentand people that are “costs” to society.When such costs to the environment, publichealth, or rural communities are borne by societyrather than the producer they are termed “negativeexternalities” (or just “externalities” for the purposesof this report). If CAFOs were required to remediateor prevent the cost of these externalities, they wouldincur higher production costs and thus be consideredless efficient than they currently appear. In addition,CAFOs receive subsidies that help defraytheir production costs. Because these subsidies aretypically funded by taxes, society is paying to reduceCAFOs’ production costs in more ways than one.So, when examined in a broader societal context,suppositions about the higher economic efficiencyof CAFOs can be seen as half-truths. eprimary purpose of this report is to examine someof the costs our society pays for CAFOs from an environmentaland public health perspective, and howsubsidies create an illusion of CAFO efficiency.e societal costs of pollution externalities andgrain subsidies—that is, costs for which CAFOowners have never been held accountable—are examinedprimarily in Chapters 2 and 3. But first, weconsider narrower aspects of efficiency that encompassthose costs CAFO owners have historically paid.Factors Contributing to CAFO GrowthSeveral key factors have driven CAFO expansion,one being the availability of cheap inputs (i.e., expensessuch as grain, water, and energy that havevariable costs). We consider the importance of lowcostgrain below.Another factor that will be briefly addressed inChapter 3 is technological change. is has takenthe form of developing breeds of livestock that bettersuit the CAFO environment and that facilitate highspeedprocessing, reliance on antibiotics to compensatefor conditions that favor disease, and feed formulationsthat allow animals to be produced in a way that meetsthe demands of CAFOs. ese changes and others haveoen been accomplished through taxpayer-supportedresearch at public universities.In addition, the ability of CAFOs to shi thecosts of their pollution onto the public in the formof externalities such as air and water pollution reducesthe apparent costs of production. e cost ofthese externalities is considered at greater length inChapter 3.In this chapter we will examine economic efficienciesand processor-related market control.Economic efficiencyEconomies of scale, which help larger operationsrun more efficiently by using production tools notreadily available to smaller operations, are oenoveremphasized in discussions of CAFO efficiency.Economies of scale do exist for CAFOs when costssuch as manure disposal are avoided, but are oensmall and reach optimum levels at an operation sizebelow that of large CAFOs.Much more important has been the availabilityof low-cost grain, which allows CAFOs to maintainlarge numbers of animals in a small space (becausethe grain can be brought to the animals rather thanhaving the animals forage for their food, as in pastures).Corn and soybeans, the primary feed grains,are high in easily digestible carbohydrates and proteincompared with forage. eir high nutritionalvalue per unit of weight allows large volumes ofthese grains to be shipped at relatively low expense, 9further facilitating the centralization of animal feedingoperations. For example, the ability to ship grainat low cost to the Mid-Atlantic, which lies outsidemajor corn- and soybean-growing regions, has facilitatedthe dramatic growth of CAFOs in North Carolina—nowthe second largest hog-producing stateand fourth largest producer of broilers.9 Soybeans are technically not grain, but for the sake of simplicity will be referred to as grain along with corn in this report (unless otherwise noted).

18 Union of Concerned Scientistse high nutrient content of grain also gives it ahigh “conversion efficiency” compared with manyother feed sources. Conversion efficiency refers tothe amount of feed needed to produce a unit of animalproduct. Cattle, even though they evolved to eatforage, generally add weight somewhat faster andproduce more milk when fed grain rather than pastureor forage.Livestock also expend more energy to maintainbody temperature and mobility on pasture and otherCAFO alternatives, which contributes to lower conversionefficiency. Animals that are housed in temperature-controlledfacilities and have restricted mobilitycan devote more of their food consumption to gainingweight or producing eggs or milk. In other words, animalsin heated facilities are kept warm through theuse of fossil fuel energy rather than the metabolic energythey would otherwise expend.Beginning in the 1950s, the growth of broilerCAFOs applied pressure to other livestock sectors toadopt similar measures for increasing production andreducing costs. Chickens convert grain into meatmore efficiently than cattle or hogs: it typically takesabout 2.3 lb. of grain to produce a pound of chicken,but 5.9 lb. to produce a pound of pork and 13 lb. for apound of beef (Pimentel and Pimentel 2003), so evenaer adopting CAFO production methods, a grainbaseddiet for poultry maintains some advantagescompared with other types of livestock.Despite its advantages for weight gain, heavy dependenceon feed grain can only occur if it is lessexpensive than alternatives such as forage. is isbecause feed is a large part of CAFOs’ productioncosts—about 60 percent for hogs and broilers(Starmer, Witteman, and Wise 2006). As discussedat length in the following chapter, the low cost ofgrain in recent decades has been largely supportedby federal government policies that 1) provide taxpayersubsidies for cheap grain and 2) have eliminatedgrain supply controls, allowing prices to fall.Because feed comprises such a large expense for theCAFO industry, the cost to taxpayers for this subsidyis high.Low-cost inputs such as grain favor CAFO expansionwhen prices for animal products are low.is has generally been the case during the past severaldecades. Low-cost inputs spread the high fixedcosts of confinement infrastructure (such as thebuildings that contain the animals) over many unitsof production. CAFOs can compensate for lowprofit margins per animal by producing large numbersof animals. By contrast, small and diversifiedproducers oen have relatively lower fixed costs andhigher variable costs, and may attempt to lowertheir costs by reducing production when prices arelow. In this way, CAFOs may expand at the expenseof smaller operations.Another factor in CAFO efficiency is economiesof scale. Hypothetically, a large facility may be ableto afford machinery that greatly improves productionefficiency because its cost is distributed over alarge amount of finished product (in this case,processed animals). A smaller facility could not takeadvantage of such efficiency because the cost of themachinery would be spread over too few products.Studies of this factor in the hog industry (e.g.,McBride and Key 2003) suggest that economies ofscale exist, but are oen minimal for animal producerslarger than medium-sized AFOs or smallCAFOs. erefore, economies of scale do not significantlyfavor CAFOs over medium-sized operations.A summary of several studies comparing theproduction costs of hog operations by size showedthat smaller and medium-sized hog farms had coststhat, compared with the largest farms, ranged fromthe same to 15 to 28 percent higher (Weida 2004a).For example, in one of the cited studies, three years’worth of data suggested that the optimal operationsize based on cost of production was 120 sows (producingabout 2,400 hogs per year). Typical costs inother studies were about 5 to 11 percent higher forthe smaller farms of 150 to 250 sows (producingabout 3,000 to 5,000 hogs per year) compared withoperations of 3,500 sows. Medium-sized AFOs weretypically more efficient than the smallest operations.Profits per hog for the best third of producers in anotherof the cited studies, regardless of operationsize, averaged about $10 per hog in 1999 dollars.Smaller to medium-sized independent hog producersspan a range of production efficiencies, and

CAFOs Uncovered 19the more efficient of these operations are cost-competitivewith larger CAFOs (Ikerd 2004; McBrideand Key 2003). ese more-efficient smaller, independentoperations produce hogs at about the samecost as the larger CAFOs. In a more recent study,costs for very large hog feeder-to-finish CAFOs averagedabout 9 percent less than medium-sized operations(500 to 1,999 head). However, 38 percent ofmedium-sized operations had costs below $40 perhundredweight (cwt), compared with 64 percent ofvery large CAFOs. A similar percentage of mediumsizedoperations, and about 16 percent of smallones, had the same or lower production costs thanthe average very large hog CAFO. Many mediumsizedoperations used production practices associatedwith higher efficiency, such as “all-in-all-out”production and “phase feeding” (McBride and Key2007). 10 ese data suggest that management skillsmay oen be more important than size in determiningefficiency, and that medium-sized and somesmall AFOs are capable of production as cost-effectiveas CAFOs—even without considering the externalitiesof manure that CAFOs impose in greateramounts than smaller operations. 11Comparisons based on scale are difficult whencomparing fundamentally different types of animalproduction. For example, such comparisons may beuseful when comparing CAFOs to smaller but otherwisesimilar AFOs. Various alternative livestockand poultry production methods, however, may differsubstantially from CAFOs in the technology,capital, and labor processes they employ, and theconsumer markets they target. In those cases, factorsother than scale may also be important in determiningefficiency or economic viability.For example, hog hoop barns that use deep beddingare generally a substantially less expensive alternativeto hog CAFO shelters. On the other hand,because hoop barns typically allow more space peranimal (especially if the hogs are provided with outdooraccess), fewer animals may be raised per unitof land. Bedding in hoop barns—typically smallgrainstraw or corn stalks—also adds expense, becausehog CAFOs typically have no bedding. Inaddition, feed conversion rates in Iowa (where moststudies of hoop barns have taken place) are somewhatlower in typically unheated hoop barns in winter(Kliebenstein et al. 2003). us, comparisonsbetween hoop barns and CAFOs based primarily onscale may not be appropriate to determine the financialviability of these alternative methods forraising hogs.Processor-driven market controlAnother major factor in the growing predominanceof CAFOs is the integrated structure of the industry.Animal production and processing has become increasinglyintegrated and concentrated over the pastseveral decades. In particular, a few very large animalprocessors largely control the supply of animalsthrough ownership or contracting arrangements.And because of increasing functional integration,processors have gained considerable economicpower over producers, who depend on processors toslaughter their animals and distribute their products.In most cases, contracts (especially productioncontracts) have become the primary marketingarrangement between animal producers and processorsor packers (oen referred to as “integrators”).Industry concentration has risen substantiallyover the past several decades, to a point where itmay have a substantial impact on producers. An industryin which the market share of the four largestfirms (“four-firm concentration” or CR4) totalsmore than 40 percent is oen considered to threatenfree-market mechanisms by giving those firms too10All-in-all-out production keeps animals of the same age together in discrete batches, rather than mingling animals of different ages. Phase feeding matchesanimals’ diets to their specific life stage.11It has been observed that many operators of smaller and independent hog farms are older and preparing for retirement (McBride and Key 2003). eseolder owners may be less willing to invest in newer management approaches or make capital improvements that would improve efficiency. Younger or newerproducers, on the other hand, may be more attracted to CAFO production methods such as contract arrangements with processors for several reasons; reductionof risk has been suggested as one. Better availability of credit has also been associated with contract production, and because of the high capital expensesassociated with CAFOs, may be a significant motivating factor (MacDonald et al. 2004; Knoeber and urman 1995). Insufficient open-market options for independentproducers may be another reason.

20 Union of Concerned Scientistsmuch control over pricing and supply (Heffernan2000). e broiler chicken processing industry’sCR4 is 56 percent, the beef industry’s is 83.5 percent,and the hog industry’s is 64 percent, and eachhas been rising steadily for the past several decades.In 1990 these numbers were 44 percent, 72 percent,and 40 percent, respectively (Hendrickson and Heffernan2005). In 1987, the pork packers’ CR4 was 37percent, and the broiler processors’ was 35 percentin 1986—both below the 40 percent benchmark.e dairy processing industry is more complex thanother sectors, but is also undergoing increasing concentration(Hendrickson et al. 2001).Several of the largest companies, such as Cargill,ConAgra, Smithfield, and Tyson, have substantialholdings in several livestock sectors, and also ownlarge numbers of animals. For example, Smithfield isby far the largest owner of hogs in the country.Cargill and ConAgra are also grain suppliers (Hendricksonand Heffernan 2005). Growing ownershipby processors (called “captive supply”), a high percentageof production contracts, and shrinkingopen (or “spot”) markets have the potential to distortmarkets in favor of lower prices for producers.Despite this growing industry concentration,the federal authority charged with oversight of theprocessor industry, the USDA’s Grain Inspection,Packers and Stockyards Administration (GIPSA),has been strongly criticized for lax regulation ofanti-competitive practices under the Packers andStockyards Act (PSA). In reports beginning in 2000,the Government Accountability Office (GAO, formerlythe General Accounting Office) and theUSDA’s Office of Inspector General (OIG) foundthat GIPSA lacked the organizational structure andprocesses needed to effectively monitor and enforcePSA provisions (GAO 2000). In particular, GIPSAdid not adequately involve attorneys from its Officeof General Counsel in its investigations of potentialanti-competitive practice violations.Although GIPSA agreed to many of the recommendationsof the GAO’s 2000 report, later investigationsby the GAO and OIG found that importantagreed-upon improvements had not been implemented(USDA 2006; GAO 2005), and lawyers hadnot been adequately integrated into GIPSA actions.e GAO noted that GIPSA senior managementthwarted investigations through delays and inaction,and that GIPSA officials had not adequatelyresponded to the GAO and OIG reports (GAO2006). e investigations of GIPSA oversight of theprocessor industry suggest that anti-competitivepractices against smaller and independent animalproducers are unlikely to be prevented under thecurrent system.e limited access of small and medium-sizedproducers to slaughterhouses is exacerbated byUSDA inspection requirements. With the exceptionof small chicken producers in many states that selldirectly to consumers, health inspections are necessaryfor marketing, and federal inspections are requiredfor sales across state lines. Access toregulator-approved facilities is therefore needed toensure broad market access. In other words, difficultyin gaining access to processors not only impedesproducers’ ability to slaughter their animals,but also may restrict their ability to market theirproducts. e resulting bottleneck between producerand consumer can reduce the viability of smaller andalternative producers even when their products maybe competitive based on production costs.Poultry processors, for example, have becomelarger and have built larger slaughterhouses. At thesame time, smaller processors and processing plantshave le the industry (Ollinger, MacDonald, andMadison 2005). e remaining large processorspreferentially contract with large producers (i.e.,CAFOs) and do not accept chickens or hogs fromindependent producers. is problem is exacerbatedby the need for slaughterhouses to be close to producersdue to the potential harm done to animalsduring transportation.Contracts are key features of the CAFO system.Broiler and egg production, the first types of animalproduction to develop CAFOs, were almost entirelydominated by contracting in 2001 (as shown inTable 3), with 88 percent of production under contract.Almost 61 percent of hogs were also produced

CAFOs Uncovered 21under contract in 2001, while only 31 percent wereproduced under contract from 1994 to 1995. Dairycontracts jumped from about 37 percent between1991 and 1993 to about 57 percent between 1994and 1995. Beef cattle were the only animals consideredin this report of which less than half (21 percent)were produced under contract (MacDonaldet al. 2004).Furthermore, only the largest producers typicallyuse contracts. For example, 65 percent of thelargest hog producers ($1 million production valueor greater) were under contract in 2001, while onlyabout 8 percent of small hog farms (less than$250,000 production value) used contracts. Evenmore dramatically, 92 percent of the total value ofhog production was produced under contract thatyear (MacDonald et al. 2004).The role of integrators in contract processingProcessors are oen referred to as integrators becausethey combine the production and processingaspects of the industry through animal ownershipor contracts. Integrators have preferences about thesize of livestock producers with which they contract,so their decisions may have an important bearingon producer size.As noted above, most livestock are producedunder contractual arrangements with large integrators.erefore, access to processors for slaughterand distribution of animal products may oen dependon the producers’ ability to enter into contractswith processors. Because processors favorcontracts with large feeding operations, smaller oralternative animal producers can have difficulty processingand marketing their products, even if theyproduce these products at competitive prices. Andbecause the large majority of animals and productsare processed under contract, independent producersmay have difficulty in finding processors thatwill buy their products (or buy them at a fair price).Probably most important, however, is the needof large processing plants to operate near full capacityto realize economies of scale (MacDonald et al.2000). is encourages the use of contracts withlarge suppliers and captured supply, which canensure processing at full capacity.In the case of hog and beef processors,economies of scale at the largest processing plantsprovide only about a 3 to 5 percent cost savings forbeef and hog slaughter compared with plants onequartertheir size, and these savings are only realizedif the slaughterhouses run near full capacity.is favors processors that reduce their risk of operatingbelow capacity by contracting with CAFOs(MacDonald et al. 2000).Economies of scale are greater for poultry processing,and may be more directly associated withthe growth in large processing plants. e largestplants realized cost savings of about 8 percentcompared with smaller plants in 1992. erefore,Table 3. Percent of Livestock Production under Contract by SectorCommodity 1991–1993 1994–1995 1996–1997 1998–2000 2001Livestock 32.8 42.9 44.8 48.0 46.8Cattle na 19.0 17.0 24.3 20.9Hogs na 31.1 34.2 55.1 60.6Poultry and Eggs 88.7 84.6 84.0 88.8 88.1Dairy 36.8 56.7 58.2 53.6 53.1Other Livestock 0.2 9.3 4.9 10.9 9.3na=not availableData drawn from USDA Farm Costs and Returns Survey (1991–1995); USDA Agricultural Resource Management Survey (1996–2001)SOURCE: MacDonald et al. 2004.

22 Union of Concerned Scientistseconomies of scale may explain a substantialamount of the consolidation in the poultry processingindustry (Ollinger, MacDonald, and Madison2000). Although economies of scale are less pronouncedfor swine processors, that sector seems tobe following a similar pattern.e increasing size of meat slaughtering operationshas occurred alongside the growth of CAFOs.is has led to the disappearance of smaller processorsthat might be more accessible to smaller producers(Ollinger, MacDonald, and Madison 2005).By 1992 large plants processed 88 percent of chickens(Ollinger, MacDonald, and Madison 2005), andas of 1997, four firms handled almost 80 percent ofsteer and heifer slaughter—twice as much as twodecades earlier. Large plants handled 38 percent ofhog slaughter in 1977, but 88 percent by 1997(Table 4).With the increase in large processors and largeplants operating through contracts with producers,and a simultaneous decrease in smaller processors,it is becoming increasingly difficult for smaller independentand alternative producers to find slaughterhouseswilling to process their animals (Fanatico2003). is problem is exacerbated for specialty producersin niche markets such as pastured-raisedbeef, which require segregation of their productsfrom mainstream products.An alternative to contracts is open bidding (alsocalled a competitive or “spot” market), which wasthe common means for producers to sell to processorsprior to the predominance of contracting. Ascontracting has expanded, spot markets have becomemore restricted in many regions, which maylimit them as a marketing option for smaller producers(MacDonald et al. 2004). An added problemis that when spot markets become too small theymay no longer function efficiently, which can lowerprices for producers.Although cattle producers may be unhappy withspot market prices, the data show only modestlylower spot prices compared with contracts (MacDonaldet al. 2004). Nevertheless, because low prices foranimals may occur for both contract and spot marketsdue to the economic concentration of processorsand their ability to cross-subsidize different sectors oftheir business (Heffernan 2000), spot market pricesthat are only modestly lower than contracts do notnecessarily reflect fair pricing for producers.In summary, the evidence suggests that severalfactors have influenced the expansion of CAFOsover the past several decades, including the availabilityof low-cost grain and coordination betweenCAFOs and large processors through contracts andownership. e ability of CAFOs to shi the costs oftheir pollution onto society has also been important,but is considered separately in Chapter 3.Economies of scale exist for some CAFOs but areoen modest, while many medium-sized AFOs areas efficient as the largest CAFOs.Table 4. Percent of Animals Slaughtered in Large PlantsSlaughter Classes and Size Cutoff*Report YearAll Cattle Steers/Heifers Cows/Bulls Hogs(

CAFOs Uncovered 23Are CAFO Alternatives Cost-effective?Smaller to medium-sized AFOs that are adequatelydistributed geographically may address some of theconcerns posed by CAFOs. But what about other alternativesthat may avoid more of the problems thatCAFOs cause? Are these alternatives cost-effective?Although the following review is not intendedto be comprehensive, it shows that several of thebetter-researched alternatives can indeed competewith confinement operations. is is something of asurprise considering that the great majority of researchdollars have been devoted to improvingCAFO performance while largely neglecting alternativemethods. In fact, one of the oen-touted advantagesof CAFOs is their ability to adopttechnological advances such as breeds that gainweight quickly—advances that are sometimes availableonly to large producers.e disparity in research effort also suggests thatthere may be substantial opportunities to improvethe efficiency of alternatives. is review is thereforeonly a snapshot of an evolving picture, and as suchprovides only a rough indication of the possibilities.Hog production alternativesSome of the best-studied alternatives to CAFOs involvehog production. One of these alternatives ishoop barns—open-ended structures with curvedroofs, in which hogs are allowed to “nest” in strawbedding. Hogs may also be raised on pasture.In one test, hogs raised in hoop barns in NorthDakota provided 6.63 percent higher net incomeper pig than conventional confinement. is testalso evaluated pasture-raised hogs and found thatthe net return was 4.07 percent higher than confinement(Landblom et al. 2001). ese results are alsosupported by Iowa Livestock Enterprise budgets calculatedfor confined and pasture-raised hogs for2003. at report determined the break-even sellingprice for pasture-raised hogs was $43.56/cwt, comparedwith $43.60/cwt for confined hogs (May, Edwards,and Lawrence 2003). Mid-gestation swineraised on alfalfa pasture, with only 40 percent oftheir diet from corn, gained weight and performedas well as swine fed an exclusively corn/soy diet(Honeyman and Roush 1999).Financial viability based on net returns (includingamortization of infrastructure and debt) hasbeen used to determine how well hoop barns comparewith confinement operations. Because hoopbarn production is more sensitive to different inputparameters than confinement, it will perform betteror worse than CAFOs under different circumstances.For example, in one test conducted in Iowaduring winter, when feed conversion efficiency ispoorer than for confinement systems, hoop barnsdo less well by comparison. In warmer months,when conversion efficiencies are comparable, hoopbarns oen do as well or better than confinementproduction (Honeyman and Harmon 2003;Kliebenstein et al. 2003).Poorer winter conversion efficiency, which resultsin a slightly poorer overall efficiency, meansthat the financial viability of hoop barns is likely tobe more sensitive to grain prices than CAFOs. Forinstance, hoop barns will do less well by comparisonparticularly when grain prices are high and thegrain must be purchased rather than raised on thefarm. is alternative is also more sensitive to returnson investment: hoop barns delivered a higherreturn at prices over $54/cwt, while confinementoperations delivered better returns at lower prices.In addition, slightly more labor (three to six minutesper pig) was needed for hoop barns, so net returns forconfinement hogs were about 20 percent higher inthis test.An additional consideration not evaluated inthese studies is the effect of geographic location oneconomic efficiency. For example, hoop barns mayperform better in locations where the climate ismilder than Iowa and the feed conversion ratios willthus be higher. On the other hand, because Iowa—the country’s top hog-producing state—is alsolocated in the country’s corn belt, its grain prices arelower than some other regions of the country. ismay favor production in hoop barns in Iowa even iffeed conversion efficiencies are lower than in statesthat have milder climates but little grain production.

26 Union of Concerned ScientistsImpact on global warmingOne important externality of livestock productionis the emission of heat-trapping gases such asmethane. Cattle are a major source of methane,which is produced during both the fermentation offeed in the animal’s gut and the anaerobic fermentationof manure in CAFO lagoons and other manureholding structures.Cows that feed on pasture or forage producemore methane during digestion than grain-fed cows(Clemens and Ahlgrimm 2001). ough this may bereduced substantially by optimizing productivitythrough MIRG (DeRamus et al. 2003), it is not clearthat methane levels can be reduced to those ofgrain-fed cattle.Production of the heat-trapping gas nitrousoxide from the breakdown of fertilizer used to producegrain must also be weighed against the productionof nitrous oxide from manure produced byCAFOs and their alternatives. erefore the net effecton global warming pollution from pasture- versusgrain-fed livestock is unclear (Liebig et al. 2005).It should be noted, however, that althoughmethane production may be about 125 percenthigher on pasture operations compared withCAFOs (Boody et al. 2005), the atmospheric impactwould likely be offset by higher capture of carbondioxide (Russelle, Entz, and Franzluebbers 2007).e results of several studies suggest that perennialpasture may capture about 0.9 metric ton of carbondioxide per hectare per year, while commoditycrops in Minnesota—even when grown under conservationtillage—capture only one-third thatamount (Boody et al. 2005).On balance, it appears likely that alternativeproduction systems that reduce the size and geographicdensity of animal feeding operations havesubstantial benefits compared with CAFOs. It is notpossible at this time to determine whether lowerglobal warming pollution is one of those benefits,but alternative integrated animal and crop productionsystems will likely substantially reduce otherexternalities associated with CAFOs.Conclusionse small sample of studies discussed above cannotbe used to draw sharp conclusions about the productivityof alternative animal production methodscompared with CAFOs. Many variables can affectboth productivity and profitability, including managementcapability, geography (e.g., regional climate),and availability of processors and markets.Some important parameters also change over timeas research develops new innovations and breeds oras the prices of grain, energy, and other inputschange.Despite these data limitations, however, thisoverview of alternative animal production and historictrends related to animal feeding operations allowsus to draw some broad conclusions aboutCAFOs and alternative animal production methods.First, although CAFOs oen exhibit someminor economies of scale, superior managementmay oen be more important in determining productionefficiency in at least some sectors. Wellmanagedsmaller to medium-sized swineoperations, for example, are as economically efficientas large CAFOs. Alternative systems can oenproduce animal products cost-effectively, and at anet profit to producers.Second, the largest obstacle facing alternativesis not the inability to produce animals efficiently,but the effects of processor-related market power.Challenges in this regard (vertically coordinatedproduction contracts between CAFOs and processors,elimination of smaller processors, and shrinkingof efficient spot markets in some areas) couldhamper smaller and alternative producers evenwhen they may otherwise produce animals in acost-effective and profitable manner.Finally, alternatives that integrate animal andcrop production can provide benefits to farms andsociety alike, in the form of higher profitability andreduced externalities. Linking manure to croppingsystems, for example, creates major economic, social,and environmental benefits for an entire

egion. Considering the relatively limited researchcurrently available on ways to improve alternativeanimal farming systems, further research is neededto expand these benefits.CAFOs Uncovered 27

CAFOs Uncovered 29C h a p t e r 2DIRECT AND INDIRECT SUBSIDIES TO CAFOsThe price consumers pay for animal products atthe grocery store does not reflect all of the costssociety as a whole pays for these products. One ofthe important ways these costs are masked isthrough the provision of subsidies to CAFOs. Somesubsidies may go directly to CAFOs; others (socalledindirect or implicit subsidies) go to otherparts of the economy and are then passed on toCAFOs. ese indirect subsidies may easily go unnoticedby the general public, but are just as importantto CAFOs in facilitating their operation andgrowth. Where subsidies go to CAFOs preferentiallyover other production systems, they provide an especiallyimportant advantage.In this chapter, several types of subsidies thathave been given to the CAFO industry are examined.One particularly substantial indirect subsidyhas been payments made to commodity crop growers,largely for corn and soybeans, which is passedon to the CAFO industry in the form of artificiallylow feed grain prices. ese low prices have largelybeen the result of the elimination of grain supplycontrols that were intended to keep prices at a reasonablelevel. is and other changes in federal farmlegislation have allowed the price of feed grains todrop below the cost of production in many years. Inresponse, lawmakers have compensated grain growersfor most of the difference between their cost ofproduction and low market prices. Such indirectcrop subsidies have amounted to a windfall of severalbillion dollars per year for the CAFO industry.e second type of subsidy examined in this reportis direct payments made to the CAFO industrythrough the federal Environmental Quality IncentivesProgram (EQIP), which provides about$100 million per year to CAFOs to reduce some ofthe environmental damage they cause. EQIP subsidies,like commodity crop subsidies, are ultimatelypaid for by taxpayers, and could become increasinglyimportant as pressure is applied to the industryto clean up its practices.Although the reduction of harm caused byCAFOs is desirable, EQIP payments raise legitimatequestions about whether the public should underwriteCAFOs in this way. is is especially importantwhen considered in the context of alternativeproduction systems that are efficient, cause fewerproblems, and have greater societal benefits.Subsidies are appropriate buffers for the agriculturalsector against the uncertainties of nature andprice dips due to overproduction, and they encourageconservation and technological innovation.However, it is essential that subsidies also encourageand support desirable agricultural practices.How Crop Subsidies Have Propped Up CAFOsLivestock raised in confinement eat an enormousamount of corn and soybeans. Grain and animalproduction (and their respective costs) are thereforeinseparable when evaluating CAFO production.Over the last 80 years or so, U.S. farm policy hassubsidized the production of commodity crops suchas corn and soybeans in a variety of ways; currently,some payments are made to commodity farmers regardlessof market prices or production costs. Herewe examine whether these subsidies have contributedto the growth of CAFOs, which are the primaryusers of these crops.A majority of the two most widely cultivatedcrops in the United States, corn and soybeans, is fedto livestock. In 2007, corn was grown on about

30 Union of Concerned Scientists93 million acres and soybeans on about 64 millionacres. Alfalfa is grown for livestock forage on about22 million acres (out of the 60 million total acres devotedto various types of hay); sorghum (mostly forfeed) is grown on about 8 million acres and substantialamounts of corn stover (stalks and leaves) arealso used for cattle forage or silage.By contrast, wheat (the crop most widely grownprimarily for food in the United States) is plantedon about 60 million acres, and rice on less than3 million acres. Most familiar vegetable and fruitcrops are grown on even smaller acreages. For example,potatoes are grown on about 1.1 millionacres, tomatoes on about 425,000 acres, apples onabout 360,000 acres, lettuce on about 310,000 acres,and carrots on about 100,000 acres (NASS 2008).e tremendous amount of corn and soybeansgrown for animal feed reflects the huge amount ofanimal production in the United States. 13 Feed graincosts make up a large proportion of the cost of raisinganimals in CAFOs: corn and soybeans generallymake up about 50 to 60 percent of the cost of producingchickens, eggs, and pork, and somewhat lessfor dairy and beef. Because cows can efficiently digestthe cellulose that comprises most of a plant’sstalks and leaves, cattle could survive on those partsof crops rather than on kernels or beans. However,in CAFOs a cow’s diet is largely composed of grain,which has high caloric or protein content, can beeasily transported to the animals compared withbulkier forages, and is relatively cheap.Because of the close connection between cropprices and CAFO costs, it is important to understandthe forces that determine grain prices in theUnited States. Federal government policy, for one,has a significant effect on the price of corn, soybeans,and a few other crops. e government hasimplemented various programs under Title I of thefarm bill to buffer farmers against loss (such aslosses resulting from farmers’ tendency to overproducecommodity crops, leading to crop prices thatare oen below the cost of production). Farmersalso tend to accept lower market prices because theyare not as economically concentrated as farm inputindustries or food processors and retailers, and theircommodities are perishable.e farm bill has been reenacted and modifiedapproximately every five years since the 1930s. Priorto the 1980s, its commodity programs focused primarilyon controlling the supply and price of thecovered crops. Such policies have included governmentpurchase of grain surpluses and the transfer ofgrain acreage into government-supported conservationset-aside and reserve programs. Policies directedat controlling the supply of grain have thegeneral effect of keeping the market price high(above the cost of production), thereby allowingfarmers to make a profit (Ray, De La Torre Ugarte,and Tiller 2003). ough price supports and supplycontrols from farm bills prior to 1996 could onlymoderate rather than completely prevent below-costproduction, they nonetheless had a substantial impacton prices. 14Since the 1980s, and especially since 1996, Title Iprograms have moved away from controlling thesupply or price of commodity crops (Ray, De LaTorre Ugarte, and Tiller 2003). e newer programssupport commodity crop farmers with disasteremergency payments, marketing loan gains, andloan deficiency payments when the cost of productionexceeds the crop price. Until the past two yearsof rising market prices, these programs compensatedfor much of the difference between productioncosts and low prices. As a consequence, the price ofgrains was allowed to fall as the crops were overproduced.Between the passage of the 1996 farm billand 2005, for example, corn prices dropped 32 percentand soybean prices fell 21 percent, while cornproduction increased by 28 percent and soybeanproduction rose 42 percent (ERS 2005). One study13 It is also a reflection of the fact that it takes several pounds of grain to produce one pound of animal product. is is an extremely important issue in termsof agricultural sustainability, but is beyond the scope of this report.14 e tendency toward low commodity prices is primarily a function of farm economics, and only partially altered by subsidies (Ray, De La Torre Ugarte,and Tiller 2003).

32 Union of Concerned Scientistse EPA definition of hog CAFOs used for thisreport includes operations of more than 2,500 animals,but USDA data used to calculate the grainsubsidy for hog CAFOs do not include a size categorythat corresponds exactly to the EPA’s lowerlimit of 2,500 hogs. e calculations that come closestto the EPA category used in this report comefrom a study of hog operations larger than 2,000 animals(Starmer and Wise 2007a), which generallyuse production methods similar to larger CAFOs. 16is study found that the average indirect subsidyfor hog operations of 2,000 animals or moreamounted to more than $945 million per year since1997. In 2006, 2,910 operations containing morethan 2,000 pigs held 88 percent of U.S. hog inventory(NASS 2007). A rough estimate of the subsidyfor each large hog CAFO is therefore about$325,000 per operation per year.Hog operation ownership data allow furtherbreakdown of savings by size of operation; 17 for example,owners of operations totaling 50,000 or morehogs produced 54 percent of total U.S. hog inventoryin 2006, or about 61 percent of the CAFO inventory.e largest CAFO owners thereforebenefited from about $576 million in subsidies forthe year. e 115 owners of operations with morethan 50,000 hogs each received an average subsidyof about $5.01 million for the year. By contrast, the1,690 owners of operations totaling between 2,000and 4,999 hogs held 10.8 percent of the CAFO inventory,and therefore averaged about $60,000 insubsidies per owner.Indirect Subsidies to Beef and Dairy CAFOsGrain makes up a smaller but still significant portionof the production costs of raising cattle—13 to17 percent of the costs of producing feedlot beef cattle.is industry’s overall production costs were reducedan average of about 5 percent per year overthe past 10 years due to indirect subsidies given tograin growers.e composition of feed for dairy cows is lessuniform than other sectors, but remains a substantialcost of dairy production. Data from Iowa,Kansas, Ohio, and Wisconsin between 2002 and2003 show that feed represents between 38 and 43percent of production costs, of which corn representsbetween 11 and 22 percent. erefore, if thetrue cost of production was paid for feed corn, totalproduction costs would be raised by about 4 to 7percent for these states, with the weighted averageover 6 percent (Starmer 2007).Calculations for this report (Starmer 2007)using the same methods as for poultry and hogs(Starmer, Witteman, and Wise 2006) show that Title Icrop payments also provide large indirect subsidiesto beef and dairy CAFOs. Although the cost data fordairy CAFOs are limited and expected to vary byyear and region, we can arrive at a rough estimate ofthe indirect subsidies given to these operations.USDA statistics do not include a category thatcorresponds exactly to the EPA definition of a dairyCAFO (700 or more animals). We therefore used theclosest USDA category—more than 500 cows—forour calculations. e annual national feed savingsfor such dairies, as extrapolated from Iowa, Kansas,Ohio, and Wisconsin, amounts to about $733 millionper year. In 2006 there were 3,143 dairy operationswith 500 or more cows, accounting for 46.7percent of the U.S. inventory (NASS 2007). erefore,the average subsidy for each CAFO is roughlyestimated to have been about $233,000 per year.As with hogs, the largest dairy CAFOs benefitmore than their smaller counterparts from the lowcost of grain. Confined operations of more than2,000 animals contained 21.6 percent of the U.S. inventoryin 2006, or about 46 percent of dairy CAFOinventory. ere were 573 of these very large opera-16 e entire class of hog operations containing 2,000 to 4,999 hogs comprises only 9.5 percent of hog production, according to NASS data for 2006.erefore, hog operations between 2,000 and 2,499 hogs likely produced less than 1.6 percent of hogs.17 A single owner may own multiple operations, and owners with the largest number of operations also maintain the largest operations in size.

CAFOs Uncovered 33tions nationally (NASS 2007), receiving an averagesubsidy of about $588,000 each per year. By contrast,smaller CAFOs (700 to 999 cows) andmedium-sized AFOs (500 to 699 cows) collectivelycontained 12.6 percent of U.S. dairy cow inventory,or about 27 percent of dairy CAFO inventory. ese1,700 operations therefore benefited from an averagesubsidy of about $116,000 each.Data collected by the USDA on feedlot beef cattleare not as extensive as for other sectors, so datafrom several states have been used to approximatethe indirect subsidies paid to feedlot beef cattleCAFOs. As with the dairy industry, these calculationsmust be understood to be a small sample ofthe costs and feed compositions that may occur invarious parts of the country. And unlike the data fordairy cattle, data from Iowa and Minnesota for feedlotcattle span the longer period of 1997 to 2003.Corn makes up a larger share of the feed costcompared with dairy cows (an average of 72 percent),but feed in general makes up a similar shareof the total production costs compared with dairycows (about 16 percent) and a smaller share comparedwith hogs or poultry. is is largely becausecalves (purchased by beef cattle feedlots), make up alarger share of beef cattle production costs than animalsin other sectors, and therefore grain makes upcorrespondingly less of the total cost of producingbeef cattle than dairy cows or other livestock. Extrapolatedto national production levels, our calculationsfind that the implicit subsidies for feedlotcattle CAFOs average about $500 million per year,or about 5 percent of total production costs per yearbetween 1997 and 2003.According to the USDA, extremely large feedlotsnow dominate beef cattle marketing. Feedlotssmaller than 1,000 animals sold only about 14 percentof beef cattle but made up almost 98 percent ofall feedlots (GIPSA 2002). Feedlots of 1,000 to32,000 animals sold about 22 percent of beef cattleand represented about 26 percent of beef CAFOs,thereby receiving an average subsidy of about$72,000 each. e 168 largest beef feedlots (over32,000 animals) sold more than 64 percent of feedlotcattle and represented about 74 percent of beefCAFOs (GIPSA 2002). ese huge operations receivedan average of about $2.2 million per feedlotin grain subsidies per year.Indirect Subsidies across SectorsIn summary, commodity crop subsidies that compensatefor low grain prices contributed about$34.74 billion between 1997 and 2005 to poultry,swine, beef, and dairy CAFOs (see also Starmer andWise 2007b). is amounts to about $3.86 billionper year, with the proviso that data for dairy cowsand beef cattle are limited by region and year, andtherefore nationwide averages over time are providedfor illustration purposes rather than as highlyaccurate values for these sectors. e data from thepreceding analyses are summarized in Table 5(p. 34).Because of integration in the animal productsindustry, these savings are a boon to processors aswell as CAFOs. For example, the four largest broilercompanies saved approximately $5.6 billion from1997 to 2005, and the four largest swine processorssaved about $4.3 billion (Starmer and Wise 2007b).Subsidies for Alternative Production MethodsIt is useful to ask whether alternative methods ofproducing livestock have also benefited from Title Icrop subsidies. Have these subsidies favored CAFOsover other means of producing livestock that havefewer externalities? Diversified farms—those thatproduce both grain and livestock—are one alternativeto specialized CAFOs, which grow little or nograin. 18 For example, national survey data (Boessen,Lawrence, and Grimes 2004) found that 94 percentof small hog producers grew corn and 90 percentgrew soybeans, while 84 percent of medium-sizedproducers grew corn and 80 percent grew soybeans.Fewer hog CAFOs grew corn (73 percent) and soybeans(68 percent). ese data did not include asubcategory for the largest hog CAFOs, which couldhave indicated whether these very large operations

34 Union of Concerned ScientistsTable 5. Indirect Subsidies to the CAFO Industry, 1997–2005Average Annual Average Annual Average Annual AverageSector Subsidy Subsidy per Subsidy per Reduction inCAFO Large CAFO Cost of ProductionBroilers $1.25 billion $766,000 na 13%Dairy $733 million $233,000 $588,000 6%Eggs $432 million $388,000 na 13%Feedlot Beef $500 million $72,000 $2.20 million 5%Swine $945 million $325,000 $5.01 million 15%Total$3.86 billionna=not availableSOURCES: Starmer 2007; Starmer and Wise 2007a; Starmer, Witteman, and Wise 2006.also grow some of their own grain, and did not revealthe percentage of feed grain produced on-farmin each size category.Other data indicate that CAFOs have much lesscropland available, relative to the amount of animals,compared with smaller operations (Kellogget al. 2000). Medium-sized operations of 150 to 300AU (animal units) had 0.17 AU per acre of croplandavailable to receive manure in 1997, while CAFOshad 1.7 AU per acre—or 10 times less land per animal.Smaller and medium-sized diversified farmswould generally be expected to use all of the manureproduced by their animals, in an economically andenvironmentally favorable manner (provided theircropland is near the livestock operation).Changes in the 1990 farm bill allowed farmersto retain the grain they produce but still receive loandeficiency payments. erefore, diversified farmscould benefit from Title I subsidies even if they retainedtheir grain as feed for their own animalsrather than opting to sell it. However, grain subsidiesdo not necessarily entirely compensate for lowgrain prices. One study (Ray, De La Torre Ugarte,and Tiller 2003) found that, over a two-year period,Title I subsides usually did not fully compensatefarmers for the difference between production costsand grain prices, creating a “subsidy gap.” Even withsubsidies, returns for corn were 6 percent belowproduction costs for 2000 and 1 percent above productioncosts for 2001; soybean returns were 9 percentand 11 percent below production costs,respectively.CAFOs that buy grain would not experiencethis subsidy gap because they would purchase grainat the low market price, while diversified farmerswould have to contend with production costs notentirely compensated by subsidies. Even though diversifiedfarms could benefit from crop subsidies,they would not receive as great a benefit as CAFOsthat purchase grain.To illustrate the subsidy gap, our calculationsshow the lower feed cost for CAFOs compared withhog farmers who grew their own grain in 2000 and2001 (Table 6). Title I subsidies would thereforehave favored the development of CAFOs over diversifiedfarms. It should also be noted that even withsubsidies for diversified farms that grow their owngrain, such farms may generally have produced thisgrain at a loss.Indirect subsidies for pasture systemsTo the extent that alternative means of livestockproduction do not use subsidized grain, they wouldnot benefit from Title I crop subsidies. In particular,18 e term “diversified farm” is used here in the very narrow sense of a farm that produces both grain and livestock. However, in other contexts, this termhas been used to define farms that produce many different crops as well as livestock. Such highly diverse farms oen have additional sustainability advantages.

CAFOs Uncovered 35Table 6. Comparison of Subsidies for CAFOs and Diversified FarmsHog CAFOs 2000 2001Diversified HogFarms2000 2001Market Price for Feed $92.72 $92.48 Cost of Feed Production $103.06 $97.94($/ton)Minus Subsidies ($/ton)True Cost of Feed $137.35 $126.86 True Cost of Feed $138.38 $127.41Production ($/ton)Production ($/ton)Indirect Feed Subsidy 48% 37% Feed Subsidy 34% 30%SOURCE: Starmer 2007; calculations based on differences between subsidies and production costs from Ray, De La Torre Ugarte, and Tiller 2003.pasture production and non-grain forages are notsubsidized and are therefore put at a disadvantageby these non-market practices.The Effect of Changing Grain PricesRising demand for fuel ethanol in the United Stateshas dramatically changed the economics of grainproduction by pushing corn prices to historic highs,from around two dollars per bushel in 2005 to threedollars per bushel in 2006 and $3.88 in December2007 (NASS 2008a and 2008b). Many experts such asthe Food and Agricultural Policy Research Institute(FAPRI), upon which the federal government oenrelies for agricultural analyses, predict that cornprices will remain high at least through 2011.e price of corn is no longer below the cost ofproduction, and soybean prices are expected tocome closer to the cost of production over the comingyears. Under these circumstances, the feed pricesubsidies that have benefited CAFOs historicallyseem to be rapidly coming to an end—at least for thenext several years. It is therefore relevant to ask howthese higher feed prices may affect CAFOs in comingyears.Increased demand has, in turn, led to increasedplanting of corn: about 93 million acres in 2007compared with 82 million acres in 2005 (NASS2008a). Although such large increases in acreagewould have driven prices down in the past, thisseems unlikely in the near future because of increasingdemand for ethanol and growing internationaldemand. Continued growth in ethanol demand willdepend in part on resolving limitations in productionand distribution infrastructure, the price of importedethanol, and continuing domestic ethanolsubsidies, but is not likely to disappear entirely. Accordingto estimates based on current technology,the entire domestic corn crop would meet onlyabout 12 percent of U.S. gasoline and 6 percent ofU.S. diesel needs (Hill et al. 2006). erefore, evenmodest percentage increases in ethanol fuel usecould continue to put heavy demand on corn.Calculations using FAPRI data determine thecost-price margins for corn and soybeans from 2006to 2011 (Starmer 2007). Corn is expected to continueselling at a price that exceeds the cost of production,while soybean prices move closer toprofitability over the next several years. If currenttrends continue, corn would exceed the cost of productionby 25 percent in 2011. Overall feed pricesfor hogs would average about 3 percent over the costof production for the period. Because hog productionbenefited from an indirect subsidy averagingabout 13 percent from 1997 to 2005, the net increasein production costs between 2007 and 2011 wouldbe about 15 percent. Similar calculations wouldapply to the other livestock sectors discussed in thisreport. Given the rapidly changing prices for graincrops, these data are likely to become outdated19 It should be noted that cost of crop production is determined in part by the prices of farm supplies. Some sectors of the farm supply industry, notably theseed industry, have become more economically concentrated over the past several decades. Resulting price increases in seeds or other farm supplies mayerode the profits of grain farmers.

36 Union of Concerned Scientistsquickly, but nonetheless illustrate that the indirectsubsidies of the past have largely disappeared. 19As the market price of corn or other feed grainsexceeds the cost of production, diversified farmsthat produce their own grain gain some economicadvantages. As noted in Table 6, specialized CAFOsbenefit more from crop subsidies than diversifiedfarms. Conversely, as grain prices rise, CAFOs loserelatively more of this benefit compared with diversifiedfarms that grow their own grain. Rising grainprices allow diversified farms to avoid paying thedifference between the costs of production and thehigher price they would otherwise have to pay forfeed if they did not produce their own grain. Additionally,production systems that use pasture andforage rely less on grain than CAFOs and may alsoacquire an economic advantage.To the extent that the FAPRI projections are fulfilledor exceeded, CAFOs’ costs could rise substantiallyin coming years. e elimination of thesubsidy gap and a lower cost for growing ratherthan buying feed grain could eliminate some of theeconomic advantage that large hog and otherCAFOs currently maintain over diversifiedmedium-sized animal operations.It is not clear, however, whether such a change inprofitability would result in substantial increases inalternative animal farming. As noted in Chapter 1,several alternative production methods includingwell-managed medium-sized AFOs are alreadyroughly cost-competitive with CAFOs, but oenhave difficulty gaining market access. Structural barriersto alternative animal production, such as thepreference of processors to contract with large producers,are not eliminated by increasing grain prices.e possible cost advantages that alternative productionmethods could acquire may not be dramaticenough to overcome these structural barriers, andpoint to the need for policies that will facilitate thegrowth of beneficial animal production methods.The role of feed alternativesAnother consideration that may affect the feedcosts for CAFOs and other grain-feeding operationsis the use of feed alternatives that may be lessexpensive than grain, such as the major by-productof the ethanol fermentation process: so-called drieddistillers grains with solubles (DDGS). DDGS hasconsiderable nutritional value, is enriched in proteincontent compared with corn, and may be considerablyless expensive under some circumstances.Most of the starch, the readily available carbohydratesource in corn (and the main source of easilydigestible calories for livestock), is converted intoethanol and thereby removed from the grain. eoverall nutrient content, however, is concentratedin DDGS compared with corn, and fiber digestibilityis increased, compensating in part for loststarch.Several factors currently limit the use of DDGSas a substitute for corn and other grains. A recenthog-finishing study showed that although a dietwith 10 percent DDGS provided good performance,diets that included 20 to 30 percent DDGS reduceddaily weight gain (Whitney et al. 2006).Although feed costs were lowered compared withcorn priced at two to four dollars per bushel, thisdid not compensate for the lower weight gain, makingDDGS economical only at the 10 percent feedlevel. erefore, the study authors recommendedthat DDGS should make up less than 20 percent ofa hog-finishing diet.Similarly, recent research on broilers demonstratedthat substituting DDGS for 15 percent ofgrain did not reduce the weight or quality of thechickens, but 30 percent DDGS adversely affectedgrowth rates even when alternating with 0 percentDDGS on a weekly basis (Wang et al. 2007). Cattlecan utilize greater concentrations of DDGS in theirfeed, with dairy cows using about 20 percent andbeef cows about 30 percent or more (Hicks 2007;Schingoethe 2006).A second limitation of DDGS is that it containsconsiderable moisture. is greatly limits storagetime due to spoilage, and increases transportationcosts compared with dry grains. DDGS can bedried and formed into pellets, but drying adds expenseand uses energy. For these reasons, DDGS is

CAFOs Uncovered 37currently most feasible—to the extent they can beused—for cattle located close to CAFOs.Finally, major changes in livestock diet mayhave unanticipated consequences. Recent work indicatesthat beef cattle fed 25 percent DDGS may producesignificantly higher levels of Escherichia coliO157 than beef cattle fed a conventional diet (Jacobet al. 2007). Increased levels of this serious foodbornepathogen would be an undesirable side effectof using DDGS, counteracting the benefit of lowerproduction costs with another potential publichealth threat.Summary of Indirect Subsidies to CAFOsTitle I farm bill crop subsidies have provided hugeindirect subsidies to CAFOs: estimated at $3.8 billiona year over the eight-year period from 1997 to2005 (Starmer 2007; Starmer and Wise 2007b). isnot only makes CAFOs appear more economicallyefficient than they actually are, but also givesCAFOs an advantage over alternative means of producinganimal products that do not benefit (or benefitless) from these subsidies.Rising grain costs driven by corn ethanol demandhave made such alternatives more favorableeconomically, but structural barriers may prevent orslow the ability of alternatives to penetrate the market.Alternative feeds for CAFOs, especially DDGSproduced in large quantities as an ethanol by-product,currently have several limitations that preventthem from displacing more than a small to moderateamount of corn feed.Direct Subsidies to CAFOsIn addition to the indirect subsidies CAFOs receivein the form of crop support and lack of accountabilityfor externalities, direct government subsidiesalso encourage the proliferation of CAFOs. Wheredirect subsidies favor CAFOs over other ways ofraising livestock, they may also discourage otherwiseviable alternatives. At the national level, perhapsthe largest single direct subsidy to CAFOs isthe Environmental Quality Incentives Program(EQIP), originally intended to help small andmedium-sized livestock farms address pollution issues.We examine EQIP in some detail, but it shouldbe kept in mind that many similar initiatives at thestate level may collectively contribute substantial additionalsubsidies to CAFOs.EQIP originated as part of the 1985 farm billand was renewed in all subsequent farm bills includingthe 2002 version. e intent of the program wasto provide subsidies and incentives that would helpboth crop and livestock farmers prevent environmentalharm. In the case of livestock operations,CAFOs (defined as operations with 1,000 AU ormore) were specifically excluded from the earlierversions of the program, which focused on pasturebasedanimal farms and other smaller operationsthat may have difficulty acquiring the funds neededto implement pollution control. e program wasrelatively modest at the time; for example, the versionpassed in 1996 allocated a total of $200 millionper year in federal funding.In 2002, however, the program’s emphasis waschanged dramatically, making CAFOs a majorfunding recipient. e upper cap for contracts withindividual farms was raised dramatically from$50,000 to $450,000 per project, and total programfunding rose from $400 million in 2002 to a projected$1.36 billion in 2007 (NRCS 2003).At the same time, the program’s regulatory languagemandates that 60 percent of EQIP fundingshould be devoted to animal farming, ensuring alarge amount of funds are available for these operations(NRCS 2003). ough the language does notspecifically base funding on operation size (NRCS2003), priorities are described that favor projects capableof achieving the greatest reduction in environmentaldegradation (which favors CAFOs). In awhite paper prepared prior to finalizing the 2002program, the USDA’s Natural Resources ConservationService (NRCS) explicitly suggested that becausesimilar amounts of effort and cost are neededto implement each EQIP contract, more benefitmight be garnered by allocating funds to large

38 Union of Concerned ScientistsCAFOs rather than a greater number of smalleroperations (NRCS 2002).e new EQIP regulation prioritizes activitiesthat only CAFOs typically have the need to pursue,such as improvement of waste storage facilities,comprehensive nutrient management plans, andtransportation of manure tied to environmentallyand agronomically sound crop application rates. eexplicit rationale provided for this ranking is thatgreater environmental improvement can beachieved by alleviating CAFO-related problemsthan pasture-related problems.EQIP funding also favors CAFOs by holding thefarming operation responsible for a portion of theproject costs; the share of costs supplied by EQIPtypically stops at 65 percent. While remediation associatedwith several CAFO waste management methodsis oen funded at the program maximum of 75percent of the total project cost, EQIP recommends amaximum funding level for pasture-based practicesof only 55 percent (NRCS 2003). is means thatpasture-based farmers can expect to pay for relativelymore of an EQIP project themselves than CAFOowners. is may discourage some pasture-basedfarmers from applying for EQIP funds, thereby reducingCAFOs’ competition for EQIP funds.e prioritizing of applications seeking EQIPfunds is important because the total funds availableare greatly exceeded by the demand. Most EQIP applicationstherefore remain unfunded.Estimating EQIP subsidies to CAFOse most straightforward way to determine whetherCAFOs are now favored in EQIP funding oversmaller and alternative operations would be a directcomparison of disbursements based on farm sizeand type and the practice addressed by the EQIP allocation.However, such data do not appear to bereadily available at the state or national level. Becauseof this lack of data, we cannot determine eitherhow great the subsidizing of CAFOs has beenor the relative amount of subsidizing compared withother types of animal farming operations. Despitethis limitation, it is clear that the relative subsidy toCAFOs compared with other animal operationsmust be considerably higher than in previous farmbills, because CAFOs were formerly excludedaltogether.A rough approximation of the national CAFOsubsidy can be made using the recommendationsmade by the NRCS in finalizing the EQIP rule forthe 2002 farm bill. e NRCS estimated at the timethat approximately $563 million, or 12.5 percent ofthe total funding, would go to CAFOs over a fiveyearperiod (NRCS 2003), an average of about$94 million per year. Another approach is to considerthat 60 percent of EQIP funding is slated foranimal farming, and 25 percent of that allocation isintended for CAFOs (NRCS 2003). at means15 percent of EQIP funding would go to CAFOs—about $676 million, or an average of $113 millionper year.It is not possible to clearly determine which approachis more accurate, due to a lack of appropriatedata collection that would distinguish allocations bysize and type of operation. Based on rankings favoringincentives to CAFOs, these values might be expectedto be a minimum allocation. is amountcould also include livestock such as turkeys andsheep that are not evaluated in this report, but presentsimilar concerns as other CAFOs.In 2006, about $152 million was allocated explicitlyfor confined livestock operations, whileabout $85 million was allocated to unconfined operations(Figure 3, p. 43). In addition, about $247 millionwas allocated for “undistinguishable” practices(i.e., those that could apply to either confined or unconfinedanimal operations); the amount allocatedto each type of operation is unknown. However, ifwe assume that the distribution between confinedand unconfined operations in this category is thesame as with the known disbursements, some estimateof the additional amount going to CAFOs canbe calculated.In the known categories, about 64 percent offunding went to confinement operations and 36 percentto unconfined operations. Using this same proportionfor the undistinguishable category, another

CAFOs Uncovered 39$158 million would have been disbursed to confinementoperations, for a total of about $310 million. If25 percent of this total went to CAFOs, these operationswould have received about $77.5 million in2006. However, as noted above, there are reasons tobelieve that CAFOs may have actually received aconsiderably higher percentage of the funds.For 2007, the total EQIP disbursement was projectedto be $1.3 billion (NRCS 2003). If 60 percentof this amount went to animal agriculture, and 64percent of that went to confined operations, and 25percent of confinement funds went to CAFOs, thenthe expected CAFO subsidy would have been$125 million in 2007. (e uncertainties in thesecalculations due to a lack of public data show thatbetter national accounting of CAFO fund distributionbased on operation type, size, and use isneeded.)CAFOs first became eligible for EQIP funds atthe same time as the Clean Water Act was expandedto cover CAFO pollution. EQIP subsidies thereforecame at a fortuitous time for CAFOs, which werefacing new manure management requirements.Each state determines how it will distribute federalEQIP funds, and maintains online informationabout its implementation of EQIP programs. Statesoen provide details on the practices for whichEQIP funds are allocated and the amount of the disbursements.Although the size and types of operationsare not revealed, some practices that arelargely or exclusively limited to CAFOs, CAFOs andAFOs combined, or pasture-based operations allowus to draw inferences about EQIP disbursements.For example, manure transportation subsidies areunlikely to apply to pasture-based operations andare most oen important for CAFOs. Several of theEQIP programs of major CAFO states are brieflydiscussed below.EQIP subsidies in CaliforniaAs shown in Figure 3 (p. 43), dairy operations receivethe largest share of federal EQIP subsidies forconfined animal operations (42 percent). Californiahas more dairy cows and CAFOs than any otherstate, and therefore likely receives a substantial proportionof these funds. In 2007, a California EQIPprogram for waste storage and alternative wastetreatment practices split the share of costs betweenAFOs larger and smaller than 300 AU. e programspecifies that most of the funds would be distributedto those AFOs below 300 AU (smaller to mediumsizedoperations).On the other hand, a California EQIP waterquality initiative is directed at animal operationsfacing new state and federal waste permit requirements.Changes in the federal Clean Water Act requiringpermits and comprehensive nutrientmanagement plans are largely specific to CAFOs(more than 700 dairy cows) rather than smallerAFOs or pasture-based animal farms. is waterquality initiative may therefore predominantly targetCAFOs, but state programs may affect the distributionof these subsidies because the states haveconsiderable authority in implementing EQIP. iswater quality initiative represents California’s largestEQIP budget item, at $10 million, or 21 percent ofthe budget (NRCS 2007b).EQIP subsidies in Arkansas and GeorgiaArkansas and Georgia are the two states that producethe most broiler chickens. Arkansas targeted25 percent of its 2008 EQIP funds for animal wastemanagement, and an additional 2 percent to “wastesystems closure” (NRCS 2008a). In 2007, Arkansasallocated $2.9 million to livestock waste managementfor water quality (NRCS 2007d). Arkansas alsooffered an incentive program subsidizing littertransfer to crop fields; this program may targetCAFOs because it requires applicants to document“excess manure produced on the farm.” Becausemany smaller or medium-sized farms usually haveenough of their own land to apply manure at appropriaterates (Kellogg et al. 2000), most farms thatneed to transfer manure are likely to be CAFOs.Georgia also implemented a pilot litter transferprogram for 2007–2008, funded by EQIP at up to$10 per ton and up to $10,000 per year per farm.Figure 4 (p. 44) shows the counties targeted in the

40 Union of Concerned Scientistsprogram, with red designating those counties producingand contributing litter, and green designatingthose counties receiving litter during the firstyear of the program. e program specifies that onlythese counties may receive subsidies. e distancebetween the nearest contributing and receivingcounties is close to 50 miles, while typical distancescould exceed 100 miles; since large distances are notusually required for manure transfer from smalleror medium-sized operations, we can infer that thisprogram may subsidize CAFOs more than small tomedium-sized operations. ese distances wouldalso have a substantial impact on an operation’stransportation costs and energy use.Aer the first year of the program, additionalmanure-receiving counties were added and countieswere prioritized by a point system. A few moderateprioritycounties closer to manure sources wereadded, but most high-priority manure-receivingcounties remain in central Georgia.EQIP subsidies in Iowa and North CarolinaIowa and North Carolina are the two states withthe most swine CAFOs. Requirements for EQIPfunding in Iowa give considerable weight toCAFOs; in 2008, for example, several of the state’shighest-ranked eligibility criteria pertained to concernsabout the animal waste produced by CAFOs,including “Surface and subsurface water quality relatedto the presence of excessive nutrients and organicsrelated to livestock production byconcentrated animal feeding operation’s (CAFO’s)[sic] on open feedlots” (NRCS 2008b). One of thefour major criteria used for disbursement of fundsfavors those counties with the most livestock.In North Carolina, animal farming practicesclearly pertaining to AFOs and CAFOs comprise alarge proportion of EQIP funding. Allocations forwaste storage facilities, for example, amounted to$4.5 million in 2007 (30 percent of total allocations),compared with $2.9 million in 2002. The2007 amount is at least three times larger than thenext largest categories of fencing, composting, andclosure of waste impoundments, which each representedabout 6 to 10 percent of allocations(NRCS 2008c).e state paid almost $1 million in 2007 to closewaste storage facilities, which were oen abandoned(NRCS 2008c). Disbursement data do not typicallymention operation size, but the data on waste storagefacilities show dramatically increasing amountsper operation since 2001. In that year, the averagesubsidy was about $10,000 per unit; by 2007 it hadgrown to about $36,000 per unit, favoring largeroperations.A new EQIP program to be launched in NorthCarolina in 2008, the ground and surface water conservationsupplement, will be exclusively allocatedto operations that raise confined swine. Contractswill be capped at $10,000 each.Summary of Direct CAFO Subsidies Under EQIPEQIP changed in 2002 from a program specificallyaimed at smaller farming operations to one that included—andfavored—CAFOs. is represents a significantchange of emphasis from the first 17 years ofthe program, and provides CAFOs with a new competitiveadvantage. In addition, because the programhas grown substantially in total available funding,the actual subsidies are more than six times largerthan they were seven years ago. In other words, moremoney is going to support CAFOs now than smallerfarms received a decade ago (although a substantialamount of small-farm support likely remains).Overall, EQIP CAFO subsidies for the pastseveral years were likely to have totaled about$100 million or more per year, although it must benoted that this can only serve as a very rough estimatebecause disbursement data by operation sizeare not readily available. Because of growing concernabout the environmental impact of CAFOs (asreflected in new Clean Water Act provisions recentlydirected at CAFO pollution), data should becollected and made public based on operation sizeand type.

CAFOs Uncovered 41C h a p t e r 3EXTERNALIZED COSTS OF CAFOsRaising livestock and poultry can cause substantialharm to people and the environment. Asdiscussed in Chapter 1, the costs associated withthis harm (which are not included in the costs ofproduction) are called externalities.Nutrients from manure can become externalitiesby entering the air via volatilization (Walkeret al. 2000) or by entering ground or surface water(Burkholder et al. 2007; Mallin and Cahoon 2003).Large waste spills from CAFOs have been documented(Mallin 2000), and when hundreds of thousandsor millions of gallons of animal waste spillinto a stream, river, or estuary, a series of cascadingeffects results in externalities such as the death ofthousands of fish, expenditure of many hours bystate personnel to assess the damages, closure oflocal marinas and recreational facilities due to contaminationby pathogenic microbes, lost work dayscaused by illness, closure of downstream shellfishbeds, and negative effects on the local food web(such as the death of aquatic organisms that otheranimals depend on for food).Typically the CAFO operator will be assessed arelatively small fine for such a spill. us, taxpayersand local residents or businesspeople will be forcedto shoulder the cost of externalities by paying forfish restocking and overtime for regulatory personnel,and by absorbing losses from fishing, shellfishing,and other water-related industries. Similarharmful effects can result from water pollutioncaused by the over-application of CAFO manure tofarmland, leakage from manure holding facilities,and the redeposition of airborne CAFO ammonia.It is oen difficult to assign a monetary value toexternalities, but in some instances it is possible. Forexample, odors and noxious gas emissions are acommon adverse effect of high animal concentrations(Wing and Wolf 2000), but the resulting reductionin quality of life for people living nearCAFOs is difficult to quantify directly. However,these costs may be reflected in depressed residentialproperty values that have been quantified (Weida2004). In this chapter, both quantified and unquantifiedexternalities will be considered.Whether quantified or not, externalized costs areborne by society rather than the industry that causedthe damage. If the costs to prevent (or remediate) thedamage were instead borne by the industry, its costof production would increase and could be reflectedin the marketplace by higher prices. is could facilitatecompetition by alternatives that do not causethese externalities. To the extent that the costs of externalitiesare avoided, they constitute a form of subsidyto the industry that caused them.Below we discuss in detail several of the majorexternalized costs of CAFOs. In particular, costs tothe environment in the form of water and air pollutionare considered at length. One important considerationof nutrient pollution is the tradeoffbetween water and air pollution. Reducing waterpollution, if not done properly, can exacerbate airpollution and, ironically, fail to resolve water pollutionon a regional scale. is tradeoff has seriousimplications for nutrient management policies. Wealso discuss the harm from pathogens, especiallyantibiotic-resistant pathogens, and the harm torural communities.For each topic, we describe the damage done byCAFOs and how we might estimate the monetarycosts associated with that damage. Although comprehensiveeconomic assessments of the monetarycosts are not available, efforts have been made to

42 Union of Concerned Scientistsprovide cost estimates for certain aspects of these externalities,which are useful in providing a generalsense of the extent of the subsidy represented by externalizedcosts. Other important topics such aswater and energy use we leave for future evaluations.Pollution Caused by CAFO ManureManure from CAFOs is a major source of water pollutionbecause these operations produce too muchmanure in too small an area, and this manure israrely treated to eliminate potentially harmful componentsbefore being applied to crop fields or storedin facilities such as lagoons or pits (EPA 2003). Bycomparison, the majority of human waste isprocessed by municipal wastewater facilities or septicsystems before it can re-enter our water. e manureproduced by individual CAFOs exceeds thatproduced by smaller AFOs or alternative animalfarming operations, and as we will discuss, is alsomore likely to harm the environment and publichealth than that produced on other types of farms.Most CAFOs collect and store manure prior toits application on farmland or fields. e most commonstorage structures for manure from dairy cattleand hogs are either lagoons or pits; poultry manure,because it has lower water content than cattle or hogmanure, can be gathered into piles. Poultry manureis also oen mixed with material such as wood chipsthat are spread on the floor of broiler facilities severaltimes a year. e resulting combination of poultrymanure, wood chips, wasted feed, and beddingmaterial is referred to as litter. Poultry manure thathas higher water content is stored in lagoons. Manurepits and lagoons may leak below the soil surfaceand contaminate groundwater, which mayinfiltrate wells that supply potable water (Volland,Zupancic, and Chappelle 2003; Huffman andWesterman 1995).Most of the nitrogen in manure begins in eithera complex organic form or as ammonia. Much ofthe ammonia is converted in aerobic environments,as on crop fields, into nitrate. Nitrogen in the formof nitrate is highly mobile in soils and is the constituentof manure most likely to have an adverse effectin drinking water. Concentrations of 10 mg/l ofnitrate in drinking water may cause methemoglobinemia,or “blue baby syndrome,” which may causemortality (Fan and Steinberg 1996; Johnson andKoss 1990). Nitrate consumption has also beenlinked to certain cancers.Groundwater pollutionStudies by the Kansas Geological Survey found thatcontamination in 42 percent of tested wells derivedfrom animal waste (cited in Volland, Zupancic, andChappelle 2003). U.S. Geological Survey (USGS)testing determined that animal waste was responsiblefor contamination of wells at 9 of 35 swine feedingoperations in Oklahoma where nitrate levelsexceeded the EPA safe drinking water limit of 10mg/l (Becker, Peter, and Masoner 2002). In NorthCarolina, groundwater near 11 swine lagoons hadan average nitrogen concentration of 143 mg/l(Huffman and Westerman 1995). Groundwater maymove laterally and eventually enter surface watersources such as rivers, and may thereby contributeto eutrophication (the potentially harmful proliferationof plant life in nutrient-rich water) or otherproblems. Symptoms of eutrophication include nuisanceor toxic algal blooms, low levels of dissolvedoxygen (which can cause fish die-offs), aquatic foodweb disruptions, and taste, odor, or aesthetic problemsin water resources.Movement of leaked nitrogen from CAFO manurelagoons may continue to be a threat to groundwatereven aer a CAFO closes and the lagoon isemptied. Increased exposure to air may allow ammoniapreviously leaked into the soil under the lagoonto be converted into nitrate. Because nitrate ishighly mobile in soil, it may reach groundwatermore readily than ammonia. Ignoring the contaminatedsoil beneath a closed lagoon could thereforeallow substantial quantities of nitrate to reachgroundwater.One study (Volland, Zupancic, and Chappelle2003) estimated that the cost to remediate the contaminatedsoil under dairy and hog CAFOs incontinued on page 51

CAFOs Uncovered 43Figure 3. Federal EQIP Funding for 2006Total Confined Unconfined Practices NumberLivestock Cost-Share Cost-Share Cost-Share Undistinguishable ofType Approved Approved Approved Cost-Share Approved ContractsSheep $6,552,097 $701,466 $2,246,764 $3,603,867 296Beef $312,634,324 $43,062,776 $71,465,241 $198,106,306 17,605Dairy $90,101,196 $62,284,196 $3,372,295 $24,444,705 1,951Other $20,410,903 $3,198,336 $6,526,001 $10,686,566 1,118Poultry $28,478,004 $23,036,577 $629,270 $4,812,157 1,252Swine $25,570,331 $20,116,235 $327,272 $5,126,824 658Subtotal $483,746,854 $152,399,586 $84,566,843 $246,780,425 22,880Non-Livestock $304,220,696 $0 $0 $0 18,310Total $787,967,550 $152,399,586 $84,566,843 $246,780,425 41,190National FY2006 Confined Livestock Cost-Share ApprovedSheep 0%Swine 13%Poultry 15%Beef 28%Other 2%Dairy 42%National FY2006 Unconfined Livestock Cost-Share ApprovedPoultry 1%Swine 0%Other 8% Sheep 3%Dairy 4%Beef 84%SOURCE: NRCS 2007.

44 Union of Concerned ScientistsFigure 4. Counties Eligible for EQIP Subsidies in Georgia's Poultry Litter Transfer Program, 2006DADECHATTOOGAFLOYDCATOOSAWALKERPOLKHARALSONWHITFIELDCARROLLBARTOWMURRAYGORDONCoosa RiverPAULDINGWest GeorgiaCOBBGILMERLimestone ValleyDOUGLASPICKENSCHEROKEEFULTONFAYETTEBlue Ridge MountainCLAYTONFANNINDEKALBDAWSONFORSYTHHENRYUNIONLUMPKINGWINNETTWHITEHALLWALTONNEWTONTOWNSRABUNHABERSHAMUpper Chattahoochee RiverSeven MetroROCKDALEBANKSJACKSONOconee RiverBARROWUpperOcmulgeeRiverMORGANSTEPHENSOCONEEPUTNAMFRANKLINMADISONCLARKEGREENEHARTELBERTBroad RiverOGLETHORPEPiedmontWILKESTALIAFERROWARRENLINCOLNColumbiaMCDUFFIECOLUMBIAContributingRICHMONDEQIP Funding Unit BoundaryCounty RankingHighMediumLowReceivingHighMediumLowNot ParticipatingHEARDCOWETASPALDINGBUTTSJASPERHANCOCKGLASCOCKBrier CreekTROUPMERIWETHERRooseveltPIKELAMARTowaligaMONROEJONESBALDWINWASHINGTONJEFFERSONBURKESCREVENUPSONBIBBWILKINSONJENKINSHARRISTALBOTPine MountainTAYLORCRAWFORDPEACHTWIGGSCentral GeorgiaJOHNSONEMANUELBULLOCHMUSCOGEEEFFINGHAMCHATTAHOOCHEEMARIONSCHLEYMACONBLECKLEYHOUSTONOcmulgee RiverPULASKILAURENSTREUTLENOhoopee RiverMONTGOMERYCANDLEROgeechee RiverEVANSDOOLYDODGEWHEELERTOOMBSBRYANCHATHAMSTEWARTWEBSTERSUMTERWILCOXTELFAIRTATTNALLCoastalQUITMANLower Chattahoochee RiverTERRELLLEECRISPTURNERBEN HILLJEFF DAVISAPPLINGLONGLIBERTYCLAYRANDOLPHMiddle South GeorgiaIRWINAltamaha RiverBACONCOFFEEWAYNEMCINTOSHCALHOUNDOUGHERTYWORTHTIFTPIERCEEARLYBAKERBERRIENSatilla RiverGLYNNMILLERFlint RiverMITCHELLCOLQUITTCOOKLANIERATKINSONAlapahaWAREBRANTLEYCAMDENSEMINOLETHOMASCLINCHCHARLTONBROOKSDECATURGRADYLOWNDESECHOLSNSOURCE: NRCS 2007e.0 15 30 60 miles1 inch=40 miles

CAFOs Uncovered 45Figure 5. Average Atmospheric Ammonium Ion Concentration, 1985–20021985–1987 1990–1992####### ##########################1995–1997 2000–2002##### ################### ##### ###### ########## #### #### # ## ###### ############# # ########################################SOURCE: NADP 2003.Average Ammonium Ion Concentration as NH + (mg/L)40.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0.55Figure 6. Wet Deposition of Ammonium Nitrogen, 20020.40.6#0.81.90.90.91.53.32.01.60.73.42.02.10.8 1.0 3.1#3.43.3 1.50.22.04.63.4 1.70.31.04.9 4.64.4 4.02.73.46.11.64.4 3.92.25.57.22.40.20.85.73.73.04.62.20.31.42.00.20.74.93.53.83.30.8 1.63.75.1 2.24.82.23.9 3.52.54.42.92.32.23.03.83.5 3.22.80.44.0 4.43.8 3.43.7 3.51.91.0#1.90.90.8 1.63.6 3.8 3.43.22.8#0.73.33.92.10.72.51.40.5 1.32.93.02.33.22.10.60.5 0.6 2.4#3.00.6#1.10.93.64.02.71.22.71.44.64.92.41.9#0.63.9 2.94.11.92.03.0 2.7##0.62.31.90.82.43.6 3.62.63.42.52.21.90.72.8 2.24.7 1.70.1#2.1 2.02.40.62.93.10.84.63.6 3.2 1.10.11.0 1.41.11.12.11.93.2 2.02.31.41.21.12.3 1.6 1.21.41.41.91.51.71.31.21.71.71.8Ammonium as NH +4(kg/ha)≤ 0.50.5-1.01.0-1.51.5-2.02.0-2.52.5-3.03.0-3.53.5-4.04.0-4.5>4.5

46 Union of Concerned ScientistsFigure 7. Wet Deposition of Ammonia and Nitrate Nitrogen, 20021.01.8Sites not pictured:Alaska (2001)Alaska (2003)California (1995)Hawaii (1999)Virgin Islands (2001)1.53.41.21.22.03.82.93.21.14.52.43.01.0 1.7 4.74.46.0 3.10.42.55.76.0 3.40.71.36.7 6.46.2 6.44.46.07.83.36.4 6.44.611.3 5.10.31.17.49.17.23.76.74.60.41.84.40.30.96.65.86.26.31.3 2.35.99.8 4.2 4.66.7 5.7 5.65.36.04.55.12.44.57.66.1 5.55.30.55.2 5.95.8 5.37.1 6.31.91.73.71.21.3 2.05.6 5.7 6.5#4.71.55.16.2 5.43.80.94.61.91.0 2.04.74.93.94.84.71.11.3 0.9 3.05.31.0 2.21.14.86.25.41.64.12.96.27.54.93.61.06.4 4.96.33.53.74.6 4.70.94.43.41.14.14.2 5.34.65.93.63.93.31.13.9 3.55.7 3.40.13.7 3.54.20.94.25.21.36.15.5 4.62.80.21.6 2.02.71.73.53.04.8 3.24.32.62.71.54.7 3.7 2.63.12.03.93.72.93.13.42.53.60.4 kg/ha0.6 kg/ha0.1 kg/ha0.9 kg/ha0.9 kg/ha3.3N(kg/ha)≤ 1.01.0-2.02.0-3.03.0-4.04.0-5.05.0-6.06.0-7.0>7.0National Atmospheric Deposition Program/National Trends NetworkSOURCE: NADP 2003.Figure 8. Geographic Concentration of Hog Production, 1997–20021 dot=2,500 Hogs andPigs Increase1 dot=2,500 Hogs andPigs DecreaseUnited States Net Decrease:-783,046SOURCE: NASS 2002b.

CAFOs Uncovered 47Figure 9. Geographic Concentration of Dairy Cows, 1997–20021 dot=500 Cows Increase1 dot=500 Cows DecreaseUnited States Net Decrease:-35,853SOURCE: NASS 2002b.Figure 10. Geographic Concentration of Broiler Production, 1997–20021 dot=400,000Broilers Increase1 dot=400,000Broilers DecreaseUnited States Net Decrease:+1,133,786,901SOURCE: NASS 2002b.

48 Union of Concerned ScientistsFigure 11. CAFO Manure LagoonLiquid manure from CAFOs is often stored in open-air reservoirs.Photo credit: Courtesy of USDA.Figure 12. Environmental Danger of CAFOsIn this 1999 image, raw manure from hog CAFOs overflows duringflooding caused by Hurricane Floyd.Photo credit: Courtesy of Rick Dove, www.doveimaging.comand www.neuseriver.com.Figure 13.CAFO Manure PileThis enormous pile of manurewas CAFO-generated.Photo credit: Courtesy ofFactoryfarm.org.Figure 14.CAFO Manure LagoonManure is flushed with water intoa lagoon at this North Carolinahog CAFO.Photo credit: Courtesy of USDA.

CAFOs Uncovered 49Figure 15.UnsanitaryConditionsin Cattle CAFOThese feedlot cowsare caked in manure.Photo credit:Courtesy ofCARE/Factoryfarm.org.Figure 16. Alternative Cattle ProductionWell-maintained pasture systems are efficient and safer for theenvironment than CAFOs.Photo credit: Courtesy of SARE.aboveFigure 17. Crowding in Chicken CAFOAt least 30,000 birds are packed into chicken CAFOs.Photo credit: Courtesy of USDA.rightFigure 18. Alternative Poultry ProductionPasture-raised chickens consume forageand insects as well as grain.Photo credit: Courtesy of Stan Skillington.

50 Union of Concerned ScientistsFigure 19.Crowding in Hog CAFOAmimals in CAFOs arepacked tightly together.Photo credit: Courtesy ofFarmsanctuary.com.Figure 20. Hog Hoop BarnHoop barns give pigs straw beddingmaterial and more room to move.Photo credit: Courtesy of North CarolinaState University.Figure 21. Alternative Pork ProductionPasture-raised pigs are free to forage onthis Colorado ranch.Photo credit: Courtesy of Doug and Kim Wiley.

CAFOs Uncovered 51continued from page 42Kansas alone could amount to $56 million—andKansas is not a national leader in either dairy or hogproduction. States that have a larger number of suchCAFOs (e.g., California, Iowa, Minnesota, NorthCarolina, Wisconsin) may face much more extensivelagoon or pit leakage problems than Kansas, dependingon geology and other factors. It has been notedthat the North Carolina coastal plain features manyrisk factors for waste runoff and leakage, such as soilpercolation potential (Mallin and Cahoon 2003).e extent of leakage and penetration intogroundwater depends on a number of factors thatvary considerably between CAFOs, includingwhether the pit or lagoon is lined, the type of lining,the type of subsoil, the depth of groundwater andaquifers, and the age of the facility. It is clear, however,that leakage is a common problem. It is alsoimportant to consider that once pollution hasreached an aquifer, it may remain for years, decades,or longer.We have used the Kansas data to calculate arough estimate of the total cost of soil remediationunder U.S. dairy and swine CAFOs. By dividing thetotal number of swine and dairy CAFOs by thenumber of such CAFOs in Kansas (NASS 2002a),then multiplying that figure by $56 million, we arrivedat a national cost of $4.1 billion. 20 We did notextend these calculations to poultry and beefCAFOs because their manure storage methods areoen considerably different than hog and dairyCAFOs. However, poultry and beef CAFOs alsomay contribute to manure leaching into groundwaterunder their manure collection structures.Compared with nitrate, phosphorus is usuallymuch less soluble in agricultural soils. It has thereforebeen thought that the primary means by whichmanure phosphorus enters water is through therunoff of phosphorus bound to soil particles, whichin turn has led to a focus on conservation practicesintended to limit runoff and soil erosion. Accumulationof phosphorus in soil over a number of yearscan also lead to increased dissolved phosphorus(Toth et al. 2006; Boesch 2001). Recent data suggestthat over several years, phosphorus application atrates above that which can be utilized by crops resultsin leaching of dissolved phosphorus intogroundwater in saturated and organic soils (Koopmanset al. 2007; van Es et al. 2004). Measurementsof crop field drainage tiles showed substantial dissolvedphosphorus from some soils aer manure application(van Es et al. 2004).Groundwater pollution can also result in surfacewater pollution, because groundwater may entersurface water such as streams or rivers.Surface water pollutionManure may spill from holding structures intonearby waterways due to severe weather or poor designor construction. Particularly dramatic instancesof surface water contamination have occurred,drawing attention to the vulnerability of these structuresand the impact they can have on watersheds.In 1995, for example, 25 million gallons of rawswine waste was released from a single failed lagooninto North Carolina’s New River and its estuary, pollutingapproximately 22 miles of river. is spillcaused fish kills, algal blooms, and fecal bacteriacontamination, as did a poultry lagoon failure thesame year (Burkholder et al. 1997; Mallin et al.1997). Massive contamination also occurred whenHurricanes Fran, Bonnie, and Floyd hit the NorthCarolina coast in the 1990s (Mallin and Corbett2006). Several large spills have also been recorded inother states (Mallin 2000), along with numeroussmaller spills.Although catastrophic failures of manure lagoonshave garnered the most public attention, themost common source of water pollution fromCAFOs may be the intentional application of manureonto farmland. Nutrients and other pollutants20 As noted in Chapter 2, NASS data do not have categories corresponding exactly to the EPA definitions of hog and dairy CAFOs, so we used the closestcategories available: 500 or more diary cows and 2,000 or more hogs. e number of Kansas hog CAFOs was obtained by multiplying the number of hogfarms larger than 1,000 animals in the state by a factor equal to the number of U.S. hog farms larger than 2,000 animals divided by the number of U.S. hogfarms larger than 1,000 animals. is estimate may differ from that used in Volland, Zupancic, and Chappelle 2003.

52 Union of Concerned Scientistssuch as antibiotics, other pharmaceuticals, andheavy metals can move from fields where manurehas been applied (Barker and Zublena 1995) due tostorm runoff into streams or leaching into the soilbelow plant root levels (Karr et al. 2001), eventuallyreaching groundwater or surface water (by transportthrough field drainage tiles). Vegetation buffers intendedto deter the movement of runoff and nutrientsinto streams and rivers are oen inadequatebecause nutrients—especially nitrogen—may passunder them (Karr et al. 2001).Damage to aquatic ecosystemsAs indicated above, the two main contributors towater pollution from CAFOs are soluble nitrogencompounds (such as nitrate and ammonia) andphosphorus. Both nitrogen compounds and phosphoruscontribute to the eutrophication of bodies ofwater characterized by algal blooms and fish dieoffs.Phosphorus tends to be the key factor in causingfreshwater eutrophication, while nitrogen ismore oen important in open marine environments,but both can be important in either environment.In addition, nitrogen in the form of ammoniacan be directly toxic to aquatic organisms, and nitrousoxides (another product of manure) are potentheat-trapping gases. Ammonia pollution can alsolower the level of dissolved oxygen in streams, lakes,and estuaries through the process of nitrification, bywhich bacteria oxidize ammonia into nitrite and nitrate(Clark et al. 1977).Eutrophication has led to hypoxia (oxygen deficiency)in extensive areas of the Gulf of Mexico andChesapeake Bay (Boesch, Brinsfield, and Magnien2001; Rabalais, Turner and Wiseman 2001). eseareas are oen called “dead zones” because the levelsof oxygen found there are too low to support manytypes of animals, such as many species of commerciallyimportant fish and shrimp. Hypoxia thereforehas a substantial economic impact. e hypoxiczone in the Gulf of Mexico is associated with nitrogenentering from the Mississippi River, and hasbeen expanding in recent years. From 1985 to 1992,the hypoxic zone averaged 8,000 to 9,000 km 2 ; from1993 to 2000 it reached as much as 16,000 to 20,000km 2 (Rabalais, Turner, and Wiseman 2001).Manure and synthetic fertilizers applied to cropsare largely responsible for the nitrogen that pollutesbodies of water. Animal agriculture that depends ongrain production is also indirectly responsible formuch of the nitrogen from crops, because mostgrain—and therefore most grain crop acreage—isused to feed animals. Livestock have been estimatedto contribute about 15 percent of the inorganic nitrogenentering the Gulf of Mexico (Goolsby et al.1999), but more recent research has raised the possibilitythat this figure may actually underestimatethat contribution (Weldon and Hornbuckle 2006).Pollution and hypoxia in coastal water and estuariesmay be especially important because manyopen-ocean fish spawn at these sites (Boesch et al.2001). For example, up to 90 percent of AtlanticCoast striped bass (Morone saxatilis), an importantcommercial and sport fish, spawn in the ChesapeakeBay (Chesapeake Bay Project 2007). Catchesof striped bass in the bay have been declining, ashave those of blue crab (Callinectes sapidus), themost important commercial species in the bay(Chesapeake Bay Project 2007). Although these declinesare likely attributable to several factors, bothspecies inhabit parts of the bay (for parts of their lifecycles) that may be subject to hypoxia. In addition,increased turbidity (poor transmission of lightthrough the water) due in part to eutrophic planktonblooms contributes to a decline in submergedgrasses that provide vital habitat for blue crab andother marine life (Boesch et al. 2001). e docksidevalue to Maryland and Virginia of this single fishery(without considering economic multiplier effects)was estimated to be about $52 million in 2002(Chesapeake Bay Commission 2003).Pollution from airborne nitrogenManure components, especially nitrogen compounds,can be important sources of air pollution.Volatilized nitrogen (in the form of ammonia) isalso an important source of terrestrial and waterpollution because, as discussed below, most of it

CAFOs Uncovered 53Regulation of CAFO ManureThe regulation of pollution from CAFO manurehas a significant impact on whether this pollutioncontinues to be an externalized cost ofproduction, and therefore whether CAFOscontinue to receive a competitive advantageover alternative types of animal production byavoiding these costs.As noted earlier, recent changes in theClean Water Act target CAFO water pollutioncaused by over-application of manure to fields(EPA 2003). One way the Clean Water Act regulatesCAFO pollution is through the issuanceand enforcement of permits under the NationalPollution Discharge Elimination System(NPDES). Regulatory changes proposed bythe EPA would affect the issuance of NPDESpermits as well as related effluent standardsand comprehensive nutrient managementplans.After the EPA made some initial changesto the system in 2003, several environmentalgroups sued the agency, claiming the additionalchanges it had proposed would be inadequateto prevent CAFO pollution. The courtupheld some aspects of the plaintiffs’ argumentswhile disagreeing with others. This ledto the development of new proposed regulationsthat would require some CAFOs to holdpermits for manure management and wouldset standards for manure application rates toprevent water pollution (Centner 2006; EPA2006). Compliance with these new standardscould be expensive, but will depend in part onthe specifics of the final rule, which the EPAplans to complete by early 2009 (EPA 2007).In addition, programs such as EQIP couldsubsidize compliance.Potential roadblocksThe wording of the EPA’s proposed NPDESregulation has raised a question aboutwhether CAFOs could legally avoid the permittingprocess in the absence of a determinationthat they actually “discharge” manure pollution(Centner 2006). Under the current language,the EPA would require “only the owners andoperators of those CAFOs that discharge orpropose to discharge to seek coverage undera permit” (EPA 2006). If this qualification is partof the final rule, it may give CAFO owners agreat degree of discretion in deciding whetherto obtain a permit (and develop an accompanyingnutrient management plan) in the absenceof actual contamination data.Furthermore, inconsistent enforcement ofpermit regulations has been a concern in thepast and may be under the new rule as well.For example, although Michigan and Wisconsineach had more than 100 CAFOs, Wisconsinhad issued 110 permits but Michigan hadissued none (GAO 2003).How these issues are resolved will haveserious implications for whether CAFOs continueto avoid accountability for the water pollutioncaused by their manure.

54 Union of Concerned Scientistsreturns to the earth within 80 km of its origin(Walker et al. 2000), where it harms vegetation andreaches water sources. Nitrous oxide, another gasproduced from manure and synthetic fertilizers, isan important heat-trapping gas, but the impact ofCAFOs on global warming is not considered here.Livestock are the biggest source of anthropogenic(i.e., influenced by human activity) ammoniaemissions in the United States. Animal waste isresponsible for about 3 x 10 9 kg of airborne ammoniaper year, while the next largest source, syntheticfertilizer, produces about 8 x 10 8 kg of ammonia.According to some estimates, animal sources contributeas much as 75 percent of anthropogenic ammonia,and fertilizer contributes about 20 percent,with all other human sources such as transportationand industry accounting for only about 5 percent(Anderson, Strader, and Davidson 2003). By contrast,dairy cows raised on pasture have been estimatedto produce about 5 to 10 times less ammoniaemissions than confined livestock (Anderson,Strader, and Davidson 2003). Recent changes in themethods used by the EPA to determine ammoniaemissions from livestock reduce estimates by about33 percent compared with previous methods, due tomore refined partitioning of animal manure handling(EPA 2004). Nevertheless, this newer method continuesto rank livestock as the largest producer of ammonia,by several times more than any other source.Nitrogen is found in several different forms inmanure, and these different forms have differentfates and effects on the environment. A largeamount of the nitrogen in manure lagoons and pits,for example, takes the form of ammonia—typicallyabout 60 percent for dairy manure, 90 percent forbeef cattle runoff ponds, 73 percent for poultry, and63 percent for hogs (Soil Conservation Service1992). Feed characteristics can alter these values.Ammonia is a simple compound that does not containcarbon, and is the primary form of inorganicnitrogen in manure.Much of the rest of the nitrogen in manure isfound in carbon-containing molecules referred to asorganic nitrogen. is organic nitrogen is convertedinto ammonia and other forms of nitrogen.How manure is stored and applied to fieldslargely determines how much of the ammoniavolatilizes. Open manure lagoons or pits, for example,allow substantial amounts of ammonia to escapeinto the air. e amount of inorganic nitrogenin manure and how it is applied to the soil is importantas well. When over-applied, the type of applicationmethod largely determines whether theammonia is volatilized and creates air pollution(and, indirectly, water pollution), or remains in thesoil where some of it can pollute water resources.Phosphorus from manure, unlike ammonia,does not form a gas, and therefore does not typicallyleave manure via the atmosphere. is differencebetween ammonia and phosphorus has importantimplications for the distribution of manure ontofarmland and for tradeoffs between air and waterpollution discussed below.A large percentage of volatilized ammonia findsits way back to the ground or water locally or regionally.is can occur through dry deposition orwet deposition (facilitated by rain or snow). Researchin Europe showed that about 50 percent ofvolatilized ammonia is deposited within approximately50 km of the source (Ferm 1998). Calculationshave also predicted that 38,000 of 43,000 shorttons of volatilized ammonia produced by NorthCarolina’s 2,295 CAFOs, or 88 percent, is depositedwithin a radius of 50 km (Murray 2003). is suggeststhat most of the ammonia that is eithervolatilized from CAFOs directly or aer applicationonto farmland will be redeposited across the region.e growing number of CAFOs has occurredalongside, and may be correlated with, dramaticallyincreased airborne ammonium ion concentrationsin several parts of the United States over the past 18years (Figure 5, p. 45). Ammonia ions are rapidlyformed in the atmosphere from volatilized ammonia.In many areas ammonium ion concentrations haveincreased by a factor of two to four, and areas of highammonium concentration (over 0.5 mg/l) have expandedsubstantially. e areas of greatest ammoniumconcentration correspond roughly with thoseareas that have the largest number of dairy, beef, andhog CAFOs, although areas with the highest num-

CAFOs Uncovered 55bers of broiler CAFOs (in the southern part of thecountry) do not show increased ammonium.Figure 6 (p. 45) illustrates wet deposition of ammoniafor 2002, showing that in many areas, substantialamounts of ammonia reach the ground orwater. Areas of high deposition generally correspondwith regions of high CAFO concentrations,with California an exception. Dry deposition, whichis not measured in this figure, can contribute substantialadditional amounts of ammonia, perhaps asmuch as or more than wet deposition under someconditions (Ferm 1998). In North Carolina, ammoniumconcentrations have increased significantly inrecent years in the Neuse River (Burkholder et al.2006) and the northeastern portion of the Cape FearRiver (Burkholder et al. 2006; Mallin and Cahoon2003). ese rivers drain the largest swine-producingareas on the East Coast, which are also areas withhigh levels of ammonia wet deposition (Figure 6,p. 45).When ammonia returns to the earth, either bywet or dry deposition, it can directly damage terrestrialecosystems or move through the soil profileinto ground and surface water, causing water pollutionof the types discussed earlier. Unlike nitrogenthat enters ground or surface water from crop fieldsor manure storage facilities, airborne nitrogen canbe deposited in unmanaged terrestrial ecosystemssuch as grasslands, forests, and deserts. Many naturalecosystems have evolved under relatively lownitrogen availability, and increased nitrogen depositionmay reduce biodiversity in such ecosystems byfavoring those species that benefit from high nitrogenlevels (Vitousek et al. 1997).Furthermore, ammonia (NH3) typically formsammonium ions (NH4 + ) aer entering the atmosphere,which can contribute to acidification of soilsaer deposition (Krupa 2003; Vitousek et al. 1997).Soils and lakes that are not well buffered againstchanges in pH are particularly susceptible to acidification,which harms plants and the ecosystems thatdepend on them.e concentration of ammonia deposition inmany areas of the United States now exceeds theamount that may harm forests (termed the “criticalload”). For example, the critical load for deciduousforests has been calculated to range from about 5 to20 kg of nitrogen (N) per hectare per year, and forconiferous forests, from 3 to 15 kg N/ha per year(Ferm 1998). When ammonia wet deposition iscombined with nitrate wet deposition (Figure 7,p. 46), areas at risk for exceeding these critical loadsare revealed, along with higher levels of nitrogendeposition (note the difference in scales used forFigures 6 and 7).e contribution to water pollution from nitrogendeposited from the atmosphere can be considerable.A recent study of 10 estuaries along the EastCoast estimated that atmospheric nitrogen depositionaccounted for 15 to 42 percent of total nitrogeninput (Castro and Driscoll 2002). Studies of theChesapeake Bay have attributed 25 to 80 percent ofthe total nitrogen to airborne deposition, but morerecent modeling has suggested a figure closer to 20percent or less (Sheeder, Lynch, and Grimm 2002).However, this remains an important contribution,since other work has estimated that nitrogen inputmay have to be reduced by almost 90 percent toeliminate hypoxia (Boesch et al 2001).In addition to ammonia, manure from CAFOscontributes to air pollution through the emission ofhydrogen sulfide, particulates, odors, and pathogens.Fine particulates formed from ammonia canbe a cause of respiratory disease. (Ammonia is alsoan irritant when inhaled, and can cause respiratoryproblems in both livestock and CAFO workers.)Ammonia ions that form from volatilized ammoniacan be an important component of fine particulatematter (categorized as PM2.5). ese smallparticles—less than 2.5 microns in diameter—areparticularly hazardous to respiratory health becausethey lodge more deeply in the lungs than the largerparticles that were previously the main focus of concern(McCubbin et al. 2002). PM2.5 may form whenammonia from CAFOs combines in the air with nitrogenoxides or sulfur dioxide from automobiles, industry,or power plants. As of 1995, ammonia comprised47 percent of PM2.5 by mass in the eastern UnitedStates (Anderson, Strader, and Davidson 2003).

56 Union of Concerned ScientistsManure and livestock also produce globalwarming pollution in the form of methane and nitrousoxides. ese gases are not as abundant as carbondioxide (the primary contributor to climatechange) but are much more potent in trapping heat:methane by a factor of about 24 and nitrous oxidesby a factor of about 295.The Costs of Manure DisposalBecause manure is an effective and valuable fertilizer,it might be assumed that CAFOs could readilyfind nearby farmers willing to accept or even buy it.is is oen not the case. In some situations, adequatefarmland is simply too far away from CAFOsfor manure transport to be a viable option, but evenwhen farmland is nearby, manure is not always accepted.For example, corn and soybeans are themost widely grown crops in the United States, butdata show that on average, only about 17 percent ofcorn and 2 to 9 percent of soybean acreage acceptmanure (Ribaudo et al. 2003). For wheat, grown inareas where beef CAFOs are prevalent, the manureacceptance rate has been about 3 percent.One important consideration for farmers is thatthe nutrient content of manure can vary considerablyfrom batch to batch depending on the type ofmanure (i.e., the animal source), what the animalswere fed, how the manure was stored, and how it isapplied to the field. is lack of uniformity requirestesting to determine nutrient content and howmuch manure a field will therefore need.Noxious odors are a second reason oen givento explain low manure acceptance rates. Odor is primarilya problem associated with manure fromCAFOs rather than smaller animal operations duein part to the way it is stored and applied to fields.CAFO manure stored in pits or lagoons is oen lowin oxygen, which can lead to the production ofvolatile compounds with offensive odors. esecompounds include hydrogen sulfide (a gas thatsmells of rotten eggs), ammonia, phenol, indoles,skatole, volatile fatty acids, acetic acid, cresol, anddimethyl sulfide. Besides being disagreeable, prevalentCAFO odors have been linked to psychologicaldisturbances and health problems in both livestockand people (Mackie, Stroot, and Varel 1998).Smaller operations do not oen store large amountsof manure in pits and lagoons, so the low-oxygenconditions that exacerbate odors are not as likely todevelop.As a consequence of the small number of farmerswilling to use CAFO manure and the huge amount ofmanure concentrated in a small locality, CAFOsmust oen transport their manure substantial distancesto distribute it over enough farmland to avoidpollution problems and comply with Clean WaterAct standards. Small and medium-sized operations,on the other hand, oen have enough available croplandto apply manure at rates that do not cause substantialwater pollution (Ribaudo et al. 2003).Manure is heavy due to its high water content,and therefore expensive to transport. Manure storedin holding facilities such as lagoons or pits has particularlyhigh water content because it is a mixtureof feces and urine that is oen flushed out of livestockhousing facilities with water. For example,dairy cow, poultry, and pig manure held in lagoonstypically consists of more than 99 percent water.Poultry litter has lower water content: about 24 percentfor broilers and 50 percent for layers. Dairycow waste is about 80 to 85 percent water as excreted,while hog and beef cattle waste is about 90percent water (Soil Conservation Service 1992).is high water content has encouraged the sprayingof this waste onto “sprayfields” close to lagoons.ere can be substantial regional differences inthe amount of farmland in an area and the percentagewilling to accept manure. ese regional limitationscan increase costs by requiring greatertransportation distances. Because CAFOs have beenable to “decouple” the growing of feed, especiallycorn and soybeans, from animal production, 21 theydo not necessarily need to be located in the same21 Because grain is relatively light when dried, it can be shipped long distances at relatively low cost (as long as fuel costs are low). CAFOs, by relying on grainas their primary feed component, have therefore been able to locate their operations geographically separated, or decoupled, from the areas that producethis feed.

CAFOs Uncovered 57regions where feed is grown. For example, the Midwest’scorn belt has a lot of cropland but relativelyfewer hog CAFOs per acre of cropland than theMid-Atlantic and West (Ribaudo et al. 2003); if thetrend observed over the past several decades of substantialCAFO growth in these latter regions continues,crop availability for CAFO manure maybecome even more of a problem.Other factors contributing to this problem arethe geographic concentration of CAFOs and the increasingsize of individual feeding operations. eenvironmental risks associated with these factorsare oen outweighed by financial considerations.For example, some poultry processors demand increasinglylarger numbers of animals to run throughtheir operations (Ollinger, MacDonald, and Madison2005), and need the animals to be raised nearprocessing plants because transportation can lead tosignificant mortality and weight loss.A substantial percentage of hog production hasbecome concentrated in the Mid-Atlantic, especiallyNorth Carolina, over the past two decades. NorthCarolina now trails only Iowa in hog production,but was ranked sixth as recently as 1990 (NASS2008a). Hog CAFOs may even be in the process ofbecoming more geographically concentrated withinstates. Figure 8 (p. 46) shows the increasing concentrationof hog production in specific regions and thesimultaneous decrease in production in surroundingareas. is trend was already occurring in the1980s and especially the 1990s.Most beef cattle feedlots have moved to five westernGreat Plains states. California has emerged as thelargest dairy-producing state even though it does notgrow large amounts of corn or soybeans, joining theranks of such traditional dairy producers as NewYork, Pennsylvania, and Wisconsin (NASS 2008a).As already mentioned, broiler chicken productionis concentrated in the Southeast (Figure 10,p. 47), another region without enough cropland toadequately utilize all of the manure its CAFOs produce.is concentration has dramatically increasedin recent decades due to rising demand for broilerchickens.Regional CAFO expansion may make it increasinglydifficult for greater amounts of manure to beadequately spread onto cropland. As CAFO productionin a given region becomes more dense, accessto local crop fields may decrease while the distanceneeded to reach available fields increases.Methods for calculating manure disposal costsOne way of estimating the costs of CAFO pollutionis to determine the amount of money CAFO ownerswould have to pay to transport manure away fromtheir operations in order to reduce pollution. esecalculations do not include costs from other sourcesof harm caused by CAFOs, such as leakage frommanure lagoons, and therefore are incomplete costestimates. Nonetheless, it can be said with certaintythat the various costs involved in addressing the unhealthyconcentrations of manure on CAFOsamount to a large subsidy for the industry.Another way to consider the harm done by externalitiesis to calculate the value of the societalbenefits lost as a result. Accurate calculations aredifficult because benefits are numerous and dispersedthroughout society. e EPA, for example,calculated the benefits from implementation of the2003 Clean Water Act amendments at about$290 million per year nationally (EPA 2003), butsubstantially underestimated the total by not addressingsome specific benefits of reduced CAFOpollution (e.g., reduced estuary eutrophication, reducedantibiotic use, and benefits to rural communitiessuch as increased property values and betterhealth). And because this regulation does not addressair pollution, no values were assigned for benefitssuch as reduced harm to forests and reducedhealth problems related to fine particulate matter.Calculations that estimate the cost of reducingmanure pollution through better land distributionmay be more accurate. is approach would addressmore of the environmental damage and some of thehealth damage caused by manure than the limitedanalyses of lost benefits currently available.Substantial expense would be required to complywith Clean Water Act standards for manure

58 Union of Concerned Scientistsapplication in all parts of the country. One study estimatedthe cost of compliance for various CAFOsunder different assumptions about farmers’ willingnessto accept manure (WTAM) as a substitute forsynthetic fertilizer, including WTAM levels considerablyhigher than the current actual percentage(Ribaudo et al. 2003). e study authors acknowledgedthat a 20 percent WTAM may represent amore realistic national average than some of thehigher WTAM values also used in the study. Calculationsfor applying manure to fields in the ChesapeakeBay watershed using a WTAM of 20 percentfor a nitrogen-limited standard arrived at a total annualcost of $133.8 million.Environmentally acceptable manure applicationrates can be set based on either nitrogen or phosphoruslimits; the choice should be determined bywhichever nutrient has the greater potential forcausing pollution. is in turn depends on specificcharacteristics of the accepting farm, including thecontent of each nutrient in the soil, the types ofcrops grown, and soil type. Phosphorus oen representsmore of a problem than nitrogen, so applicationrates based on phosphorus limits may oen bemore appropriate.Total costs for the Chesapeake Bay regionbased on a phosphorus-limited application ratehave been estimated at $152.8 million, using a 60percent WTAM (Ribaudo et al. 2003). Because fuelcosts have risen dramatically in recent years, thecurrent costs would undoubtedly be higher. Thesame study notes that without such a high WTAMvalue, there is not enough farmland in the regionto adequately distribute manure under a phosphorusstandard. Determining the cost of achieving aphosphorus standard with a WTAM less than 60percent would therefore be complicated by the factthat excess manure would have to be disposed ofby other means, with uncertain costs. For example,at a 20 percent WTAM in the Chesapeake Bay region,more than 1.5 million tons of manure wouldremain after proper field application. Disposing ofthis manure by other means would add substantiallyto the total cost. This dilemma illustrates thedifficulty of achieving adequate distribution ofCAFO manure.The authors note that the net return for animalproduction in the Chesapeake Bay region at thetime was $313 million. Therefore, the cost ofproper manure application calculated above comprisesabout 43 to 49 percent of the net return foranimal production in the region. Even at a WTAMof 100 percent, the cost of proper field applicationunder a phosphorus standard is calculated to be$143 million, or about 46 percent of net return.Even at low levels of manure acceptance, thestudy found that smaller animal farms could findenough nearby cropland to accept all of their manure,thereby avoiding the costs associated withlonger transportation distances. Because the animalson smaller farms are more dispersed than inCAFOs, more of the farmland will meet EPA applicationstandards, making manure an asset ratherthan a liability for these farms. For small tomedium-sized animal operations that also growcrops or pasture (diversified farms), some or all ofthe manure produced by the livestock could be usedon the farm.Costs of reducing air and water pollutionough the proper application of manure on fieldswill reduce air pollution from CAFOs, it may increasewater pollution. Conversely, some of themethods that reduce water pollution from fieldswhere manure is applied increase air pollution. isis because practices such as spraying manure ontofields, applying manure on top of fields withoutspraying, and leaving manure in uncovered storagefacilities for prolonged periods of time all allow substantialamounts of ammonia to volatilize. Currently,the primary way of avoiding this tradeoffbetween air and water pollution requires both thestorage of manure in ways that reduce ammoniavolatilization and access to more land for manuredistribution, and manure spreading methods thatreduce ammonia volatilization.Water and air pollution caused by CAFOs aretherefore inextricably linked, and addressing one

CAFOs Uncovered 59without the other can have unanticipated harmfulconsequences. ere is currently little incentive tolimit air pollution from manure, however, becauseour primary air pollution law, the Clean Air Act,does not typically address ammonia volatilizationfrom manure. e National Research Council recognizedthe need to reduce these emissions andrecommended that controls be designed and implemented(NRC 2004).A resulting increase in costs may be a disincentivefor CAFO owners to adopt practices such ascovering manure lagoons or injecting manure intofield soil; the latter reduces ammonia emissions byabout 50 percent for shallow injection and almostentirely for deep injection (Rotz 2004), but costsmore than spraying or broadcasting manure (Ailleryet al. 2005). e loss of ammonia nitrogen tovolatilization also reduces the quality of the manureas fertilizer, due to the resulting decrease in nitrogen-to-phosphorusratio.What, then, would it cost to apply CAFO manureto enough land to prevent or greatly reduceboth water and air pollution? A detailed USDAstudy built upon previous studies of the amount offarmland needed to avoid water pollution fromCAFO manure, under the assumption that ammoniagas reduction measures would apply to all AFOsand water pollution reduction would be based on eithernitrogen or phosphorus limits for CAFOs (Allieryet al. 2005). e report also considered theindustry’s possible responses to increased costs,such as passing some costs on to consumers and reducingproduction in the case of hogs.Simply complying with the new Clean WaterAct provisions discussed earlier (i.e., without reducingair pollution from ammonia) would cost CAFOsa total of $534.46 million annually. When bothwater and air pollution reduction practices wereconsidered, the total annual costs rose to as much as$1.16 billion.Several of the assumptions and values used in theUSDA’s calculations may have substantially underestimatedthe actual costs. For example, the reportused a WTAM of 30 percent—well above the currentlevels for corn, soybeans, and wheat noted above. Inaddition, the cost of airborne ammonia abatementwas only calculated for values up to a maximum reductionof 40 percent, because the cost of greater reductionscould not be accurately determined.Current ammonia wet deposition data suggest that a40 percent reduction in airborne ammonia wouldcontinue to leave many areas with deposition ratesthat may exceed soil critical load levels and cause environmentalharm. is may be even more of a problemif dry deposition of ammonia and nitrate areconsidered along with wet deposition.On the other hand, some aspects of this analysismay have overestimated the costs of reducing airand water pollution. In particular, the report consideredair pollution reduction for all AFOs, despitethe fact that CAFOs produce about 65 percent of alllivestock manure. erefore, if the costs of reducingairborne ammonia were proportional to the amountof manure produced, about two-thirds of the costwould be borne by CAFOs.e USDA’s analysis nevertheless represents themost complete national estimates currently availablefor the costs associated with reducing both air andwater pollution from CAFOs. e measures consideredwould only partially prevent such pollution,and do not address other dangers such as antibioticresistantpathogens and harm to rural communities(discussed below). It is therefore important to rememberthat these values only partially cover thecosts of preventing harm from CAFOs.Other Externalized CostsCAFOs have numerous environmental, health, andsocial impacts in addition to the ecological harmcaused by manure. Many of these generate costs thatare currently borne by society as a whole; here we willspecifically consider some of the costs to rural communitieslocated near CAFOs and some of the costsfrom antibiotic-resistant pathogens that develop inpart due to the overuse of antibiotics in CAFOs. Wewill also briefly discuss how the genetic uniformityencouraged by CAFOs and meat processors to

60 Union of Concerned Scientistsfacilitate their production methods may also contributeto increased disease among livestock.Public health risks in rural communitiesCAFOs oen reduce the quality of life and thehealth of people living near these operations. eodors emanating from CAFOs may be substantialfor up to several miles and have been found to havenegative effects on well-being. Even worse, exposureto pathogens, harmful airborne particles, and contaminatedwater supplies is oen higher for peoplewho live close to CAFOs—especially for employeesof CAFOs and their families. Any of these factorscan lower property values in the surrounding areas.And because CAFOs are oen situated near lowincomecommunities (Donham et al. 2007),residents may be more vulnerable to the dangersbecause these communities typically have lesspolitical clout than others.Studies show that at least 25 percent of CAFOworkers suffer from respiratory diseases such aschronic bronchitis and occupational asthma (Donhamet al. 2007; u 2001). People living near swineCAFOs have a higher incidence of specific diseasescompared with control groups in several studies(Donham et al. 2007; Wing and Wolf 2000; uet al. 1997). is is likely due to the fact that CAFOsproduce substantial levels of substances that may beresponsible for respiratory illness, including ammonia,hydrogen sulfide, particulate matter, and endotoxin(a by-product of bacterial membranes).Adverse effects are oen significant at distancesof up to two or three miles from CAFOs, and becomemore severe as operation size increases. Onestudy in particular noted a strong correlation betweenthe types of symptoms reported by residentsand those studied in CAFO workers, especially respiratoryand gastrointestinal distress, strongly suggestingthat CAFOs were the cause (Wing andWolf 2000).Populations living near CAFOs may be at higherrisk of exposure to pathogens in the air or water, orthrough direct contact with animals. Furthermore,these pathogens may have developed resistance toantibiotics used at the CAFO (see below). Substantiallevels of antibiotic-resistant pathogens or indicatorspecies (bacteria that are not themselvespathogenic, but are oen found together withpathogens) have been isolated from the air in swineCAFOs (Chapin et al. 2005), and potentially pathogenicbacteria—especially Staphylococcus aureus—were found up to 150 m downwind from swineCAFOs (Green et al. 2006), suggesting that significantrisk from airborne pathogens is greatest relativelyclose to CAFOs. However, because pathogenssuch as S. aureus may also spread between peopleaer acquisition, infection originating in or nearCAFOs may be further spread by contact betweenpeople.Water sources near CAFOs may also act as vectorsof infection for the nearby population. Antibiotic-resistantbacteria or resistance genes thatoriginated at swine and other CAFOs have been detectedin ground and surface water by several studies(Sapkota et al. 2007; Sayah et al. 2005; Chee-Sanfordet al. 2001). Because groundwater supplies 97 percentof rural drinking water (USGS 1995) and waterfrom individual wells is oen untreated, exposurefrom these sources could be significant. For example,one study found fecal indicator bacteria (Enterococciand coliforms) in test wells 250 and 400 mdowngradient from swine CAFOs (i.e., wheregroundwater is at a deeper level than directly belowthe CAFO), at levels that exceeded EPA safe drinkingwater guidelines (Sapkota et al. 2007). ese bacteriaalso had substantially higher levels of resistanceto several antibiotics compared with samples recoveredupgradient from CAFOs.Another study found tetracycline-resistant bacteria250 m downgradient from a swine CAFO(Chee-Sanford et al. 2001); these bacteria were continuouslypresent over a three-year period (Koikeet al. 2007). Soil-dwelling bacteria found in groundwaterdowngradient from CAFOs carried identicaltetracycline-resistance genes as those found in swinemanure lagoons, while bacteria from upgradientsites did not (Koike et al. 2007). is strongly suggestsnot only that lateral gene transfer had occurred

CAFOs Uncovered 61between CAFO bacterial species and those betteradapted to surviving and spreading in soil, but alsothat the spread of resistance may be facilitated bytransfer to environmentally adapted species.Some data suggest that hog CAFOs may representa particularly serious threat to communityhealth. For example, one study showed that althougha swine CAFO appeared to have significanteffects on the health of nearby residents, a dairyconfinement operation did not (Wing and Wolf2000). It should be noted that the hog CAFO in thisstudy was much larger (6,000 head) than the dairyoperation (300 head). As noted earlier, larger operationsaffect people at greater distances than smalleroperations. Most studies to date appear to have focusedon the deleterious health effects of hogCAFOs, but elevated levels of substances associatedwith harm to hog CAFO workers have also beenfound in other sectors.Economic costs to rural communitiesCAFOs also have a more adverse economic impacton rural communities compared with smaller andless industrialized animal farms. One study identifiedseveral ways that hog CAFOs threaten the viabilityof rural life: reduced property values, fewerjobs, smaller tax base, increased expenses such asroad repair, and lower or absent economic multipliereffects (Weida 2004b).Multiplier effects indicate the number of timesmoney is exchanged within a region and reflect thehigher economic value to the region of an enterprisethat uses its revenues locally compared with an enterprisethat moves money out of the region. Severalstudies suggest that the multiplier effects of smallerand independent hog operations are higher thanthose of CAFOs. For example, smaller farms tend topurchase more of their inputs locally or regionallythan larger operations; farms with gross incomes of$100,000 or less made 95 percent of their expenditureslocally compared with less than 20 percent forfarms making more than $900,000 (Chism andLevins 1994). A study examining hog farms in Iowafound that smaller farms purchased about75 percent of their feed from local suppliers, comparedwith 43 percent for larger operations(Lawrence, Otto, and Meyer 1997). Independentand smaller hog operations also generate more jobsfor a given amount of revenue compared with verticallyintegrated CAFOs—almost three times asmany in one study (Weida 2004b).CAFOs also reduce the local tax base while potentiallyincreasing community expenses. For instance,CAFOs can take advantage of tax breaks forindustry or farming operations, but several communitieshave noted higher road maintenance costs dueto CAFO truck traffic (Weida 2004b). Water treatmentcosts may also be substantial for communitiesdownstream from CAFOs or drawing water fromcontaminated aquifers, such as cities in Oklahomaand Texas that sued nearby CAFOs due to pollutionof the watersheds that supply these cites with drinkingwater (Martin 2006). And because property valuesare reduced near CAFOs, the residential taxbase may suffer as well. Overall, economic growthwas 55 percent slower in communities near hogCAFOs compared with communities with smallerhog operations (Weida 2004b).One of the most tangible indicators of the harmcaused by CAFOs in rural communities is the substantialreduction in property values. Several studieshave found considerably lower values—5 to 40 percentlower or more—within distances of about threemiles from hog CAFOs (e.g., Weida 2004b). Onestudy estimated an average loss of about $2.68 millionfor the land within three miles of each CAFO inMissouri (Mubarak, Johnson, and Miller 1999).ese values cannot be accurately extrapolatedto all CAFOs nationwide because of the large numberof differences between CAFO sites, includingthe size and type of operation, management practices,local property values, and distribution ofCAFOs. At any site, the impact on property valuesmay be greater or less than that determined in thestudies described here. It is likely however, that on anational basis the reduction in property values iswidespread and considerable. It is therefore instructiveto calculate these costs based on the Missouri

62 Union of Concerned Scientistsdata to convey the general magnitude rather than aprecise value: using a conservative estimate of 9,884CAFOs nationwide, the total loss in property valuewould be $26.5 billion.Contribution to antibiotic resistanceAn important disease risk associated with CAFOs isthe evolution of antibiotic-resistant pathogens resultingfrom the misuse and overuse of antibioticsin livestock operations. Non-therapeutic use of antibioticsin such operations has been estimated tosurpass all human use by a factor of about eight(Mellon, Benbrook, and Benbrook 2001).Crowding, stress, and unsanitary conditionsfound in CAFOs result in a reliance on largeamounts of antibiotics not only to treat illness, butalso to promote growth and prevent disease. Becausemany animals are therefore exposed to antibioticsthroughout their lives (oen in the form of a feedadditive), increasing resistance to these antibioticsmay result in diseases that are more difficult to treatin humans and therefore cause greater harm thantheir antibiotic-susceptible counterparts. e administrationof antibiotics is not allowed under organicstandards and may also be less prevalent amongCAFO alternatives such as pasture-based systems.e use of antibiotics—particularly at the lowlevels and over the long periods typical for growthpromotion—is widely acknowledged to increase theprevalence of antibiotic-resistant bacteria (Ingliset al. 2005; Shea et al. 2004; Lipsitch 2002; Smithet al. 2002). e non-therapeutic use of antibiotics inCAFOs may even lead to high levels of resistancemore quickly than therapeutic applications, whichuse higher concentrations of antibiotics (Bacquero2001). erapeutic uses may also contribute to resistance(WHO 2003), especially if animals are raisedunder conditions that facilitate disease. On a positivenote, when the European Union prohibited the useof antibiotics for growth promotion, the prevalenceof antibiotic-resistant bacteria generally decreased(Emborg et al. 2003; Aarestrup et al. 2001).Diseases caused by antibiotic-resistant pathogensare oen more difficult to treat. In some cases, antibioticresistance may also be associated with increasedvirulence, and initial use of ineffective antibioticsdelays effective treatment. Such antibioticsmay oen be initially prescribed because the susceptibilityof the infectious agent will not be known, andthe resulting delay in effective treatment can sometimeslead to worse outcomes including longer hospitalstays or death. For some pathogens, such asmultiple-drug-resistant strains of Enterococcus faecium,few effective antibiotics may remain.Higher health costs resulting from antibiotic resistanceto food-borne pathogens have been repeatedlydocumented, especially for Campylobacterjejuni and Salmonella (Varma et al. 2005a; Varmaet al. 2005b; Molbak 2005; Engberg et al. 2004;Swartz 2002; Travers and Barza 2002). Some studies,however, have argued that farm use is not generallyresponsible, or that higher therapeutic use followingthe discontinuation of use for growth promotionmay be responsible (Phillips et al. 2004). Antibioticresistantstrains of Salmonella have been associatedwith hospitalization rates more than 2.5 timeshigher than antibiotic-susceptible strains (Varmaet al. 2005a), and with serious bloodstream infectionsresulting in higher rates of morbidity andmortality (Varma et al. 2005b). In addition, the durationof illness associated with quinilone-resistantstrains of Campylobacter (13.2 d) was 28 percentlonger than that associated with quinilone-sensitivestrains (10.3 d) (Engberg et al. 2004).Although illness from food-borne bacteria isnot always treated with antibiotics, a subset of patientsrequires hospitalization and antibiotic use.erefore, antibiotic-resistant strains that developdue to CAFO practices may increase hospital costsand suffering compared with non-resistant strains.Campylobacter and Salmonella cause large numbersof illnesses: between 2 and 2.4 million Campylobacterinfections per year in the United States andabout 1.4 million Salmonella infections (Mead et al.1999). Treatment of Salmonella with antibiotics inthe United States may be as high as 40 percent ofcases (Molbak 2005), and about 10 percent ofCampylobacter infections require hospitalization

CAFOs Uncovered 63(Swartz 2002). Several factors may account for increasedmorbidity and mortality from antibioticresistantpathogens, including reduced efficacy ofinitial antibiotic choices, more limited choice oftreatment options aer diagnosis, and possible increasedvirulence of strains carrying antibioticresistancegenes (Molbek 2005).Resistance generated in animals also extends beyondfamiliar pathogens to commensal bacteria(those that commonly reside in animals and peoplewithout causing illness). is is a concern becauseresistance traits may be passed between bacterialspecies—from food-borne bacteria to commensalbacteria residing in our gastrointestinal tract, for example(Nikolich et al. 1994). Some typically commensalbacteria—Enterococci, S. aureus, anduropathogenic strains of Escherichia coli—may alsocause serious disease under certain circumstances(e.g., during surgery, in patients with a compromisedimmune system, in patients using catheters).In addition to causing disease through food consumption,other farm animal-associated bacteria,including S. aureus, may be passed to farmers, veterinarians,and their families and communities throughdirect contact with animals. Serious “communityacquired”strains of such bacteria (those not acquiredin hospitals) have emerged in the past several years,with nearly 14 percent of MRSA infections acquiredoutside hospitals (Klevins et al. 2007). 22Recent work in the Netherlands has shown thata newly identified strain of MRSA has apparentlyemerged from farm animals and now comprisesmore than 20 percent of MRSA infections in thatcountry (van Loo et al. 2007). e new strain hasbeen found on pigs and cattle, and human infectionhas a strong geographic association with regionswhere these animals are raised. More recently, thisstrain has been isolated from pigs and pig farmers inCanada, and another strain found on Canadian pigsis known to cause infections in humans in theUnited States (Khanna et al. 2007).Some urinary tract infections (UTIs) have recentlybeen associated with antibiotic-resistant bacteriapossibly acquired from animal products. Abouthalf of all women experience at least one UTI duringtheir lifetime, oen requiring antibiotic treatment,and the resulting cost of community-acquiredUTIs in the United States has been estimated to be$1.6 billion per year (Foxman 2002). Althoughmany are resolved relatively easily, some can lead tomore serious outcomes such as pyelonephritis orsepticemia.Strains of antibiotic-resistant uropathogenicE. coli have been identified that bear substantial similarityto strains found on livestock (Ramchandaniet al. 2005). In addition, UTIs caused by strains ofE. coli resistant to multiple antibiotics, or by strainsresistant to ampicillin or cephalosporin antibiotics,have been associated with higher consumption ofpoultry or pork, respectively (Manges et al. 2007).ese studies suggest that antibiotic-resistant UTIsmay be acquired from food sources, and that such infectionsmay lead to higher physician or hospitalcosts and other consequences of increased diseaseseverity.Antibiotic-resistant strains that develop atCAFOs may continue to exist at high frequencieseven aer antibiotic use in animals has been discontinuedor reduced, as demonstrated with vancomycin-resistantEnterococci in Denmark (Heueret al. 2002a and 2002b). Resistance can sometimespersist due to changes in the bacteria; for example,antibiotic-resistant pathogens that are less fit in theabsence of the antibiotic may acquire compensatorymutations over time that increase their ability topersist (Bjorkman et al. 2000; Levin and Bergstrom2000). Such mutations have been observed, as haveinherently high fitness levels, in antibiotic-resistantstrains of food-borne Campylobacter and Salmonella(Zhang 2006).22 S. aureus may be responsible for about 478 million hospitalizations per year in the United States, with MRSA strains causing about 19,000 deaths per year(Klevins et al. 2007).

64 Union of Concerned ScientistsThe economic impact of antibiotic resistanceOne way to quantify the externalities associatedwith the overuse of antibiotics in CAFOs is to calculatethe costs of the harm caused by antibiotic-resistantbacteria. ese costs include lost work days andthe increased medical costs involved in treatingmore severe disease.One widely cited study estimated the total annualcost of antibiotic resistance approaches $30 billion(Phelps 1989); Salmonella infections aloneaccount for about $2.5 billion per year (ERS 2008).e majority of these costs—about 88 percent—aredue to premature deaths. Because multi-drug resistancecontributes substantially to disease severityand poor outcomes, this factor is likely to contributesubstantially to the cost of premature deaths, althoughno specific calculations are available.Assuming most U.S. consumers eat animalproducts, eliminating the non-therapeutic use of animalantibiotics would cost about $5 to $10 per personper year, or an annual total of about $1.5 billionto $3 billion, due to increased production costs thatthe industry would pass on to consumers (NRC1999). ese estimates do not consider costs associatedwith reducing therapeutic antibiotic use, whichmay be more common in CAFOs than some alternativetypes of animal production. ough these estimatesare crude values, they serve to illustrate thesubstantial societal cost of antibiotic resistance associatedwith livestock production.Health risks related to genetic uniformityAlthough disease in animals is an important concernwith any kind of livestock production, somediseases may be exacerbated in CAFOs and otherAFOs. Concentrating animals in close proximity toone another generally enhances the potential transmissionof microorganisms (Gilchrist et al 2007).Under conditions of confinement, the naturalresistance of livestock to pathogens is therefore anespecially important factor in limiting the spread ofdisease—a factor generally strengthened by geneticdiversity among animals (Hedrick 2002; Wills andGreen 1995). Genetic diversity includes specificvariations known to play a role in disease resistance,such as polymorphic alleles in the major histocompatibilitycomplex (MHC) genes of the immune system(Vila, Seddon, and Ellegren 2005). Conversely,greater genetic uniformity increases the probabilitythat pathogens to which animals are susceptible willspread and cause harm.Unlike natural animal populations, which typicallyhave considerable genetic diversity, animals inCAFOs have been bred for uniformity to facilitateindustrial-scale production, processing, and productconsistency. Research has determined that thecontinuing intensification of livestock production,with its emphasis on a few breeds and geneticsources, is contributing to reduced genetic diversity,and that the animals bred for such industrial-scaleproduction may have less ability to resist diversepathogens (FAO 2007).at study also found that at least 20 percent,and likely more, of the world’s livestock breeds are atrisk for extinction. Although the genetic diversity oflivestock remains relatively high globally, much ofthis diversity exists on small and subsistence farms,and diversity is declining both within breeds andthrough a reduction in the number of breeds. estudy concludes that, without intervention to stopthese trends, reduced genetic diversity could havenegative consequences for disease resistance andour ability to adapt varied methods of raising livestock,such as pasture-based production, to awarmer climate.Livestock breeding for CAFOs specifically emphasizescharacteristics such as meat quality andease of processing, rate of weight gain or milk production,and related properties (Blackburn et al.2003). is results in increasing genetic uniformityfor many species and breeds, reduced diversitywithin breeds, and a reduction in the number of primarybreeds. For example, the U.S. dairy herd isnow largely dominated by Holsteins, with muchsmaller numbers of Jerseys and a few other breeds.Swine operations rely on a few paternal lines includingDuroc, Hampshire, and Berkshire, and maternalYorkshire and Landrace breeds. Because the poultry

CAFOs Uncovered 65sector uses proprietary lines, it is more difficult todetermine genetic diversity, but it is believed to benarrow.In contrast to industrialized livestock production,alternative production systems oen requirebroader genetic diversity to match the needs of regionalmarkets, climates, and other considerations.e growth of such systems has been recognized asan important means of preserving genetic diversity(Blackburn et al. 2003).Summary of CAFO ExternalitiesCAFOs produce water and air pollution that harmsfisheries and forests, drinking water, and recreationalfacilities. Other externalities include healthproblems caused by fine particles that lodge in thelungs, foul odors, and antibiotic-resistant pathogens.All of these problems are caused largely by the excessivenumbers and crowding of animals inCAFOs, which result in too much manure in toosmall an area and the overuse of antibiotics to compensatefor the stressful and unsanitary conditions.Although it is difficult to attach monetary valuesto the harm caused by CAFOs, studies have estimatedthe cost of preventing at least some of thisharm through the proper distribution of CAFO manureon farm fields. Even modest reductions ofwater and air pollution would cost more than $1 billionper year, and calculations based on more realisticrates of manure distribution would likely pushthis number considerably higher.Other types of damage caused by CAFOs thatcannot be completely addressed by proper manuredistribution include reduced quality of life for ruralcommunities (as indicated by lower property values),antibiotic-resistant pathogens, and increased geneticuniformity among livestock. Although these externalitiescannot be adequately monetized at this time, theylikely add billions of dollars to the cost of CAFOs.

CAFOs Uncovered 67C h a p t e r 4CONCLUSIONS AND RECOMMENDATIONSContrary to what many people believe, the pollutingand unhealthy system of raising livestockin crowded confinement facilities is not the most efficientway to produce eggs, meat, and milk in an industrialsociety, nor is it the inevitable outcome ofmarket forces that provide the United States withsufficient food. is report shows that the CAFOsystem is driven not by efficiency but primarily bythe market power held by large processors and publicpolicy. Deliberate government policies that costtaxpayers billions of dollars every year helped to establishthis system and now keep it afloat.Food animal production in the United States isdominated by a small number of very large processorsthat either own animals or purchase themthrough production contracts—a system that favorsCAFOs and limits market access for smaller independentproducers. CAFOs also have relied on artificiallycheap grain to offset the high fixed costs ofthe facilities and practices needed to produce largenumbers of animals. e consequences of this systemcan be measured in environmental, economic,societal, and health costs.In contrast, alternatives to CAFOs—especiallymid-sized operations and those centered on pasture—havebeen shown to produce plentiful animalproducts at a comparable cost, and oen at a higherprofit than CAFOs.Can Technology Fix CAFOs?Increasing attention has been paid in recent years totechnological means of reducing the harm causedby CAFOs. ese technological “fixes” include feedformulations intended to reduce the nitrogen andphosphorus in manure, use of alum in manure holdingfacilities to remove much of the phosphorus,and lagoon covers and injection of manure into cropsoils to reduce ammonia volatilization. Althoughthese techniques and others may be useful—but inmost cases, imperfect—ways of reducing individualproblems caused by CAFOs, they all add to the costof production while failing to address the biggerpicture. Supporting alternative production methodsthat fundamentally avoid many of the problems associatedwith CAFOs would be a better and morecost-effective approach.One technological fix that has been attractingconsiderable attention involves the capture ofmethane from manure to produce natural gas (or“biogas”) that can be used as fuel. As discussed inthis report, methane is produced under the anaerobicconditions found in many manure holding facilitiessuch as lagoons.While this technology would help reduce theodors and heat-trapping pollution created byCAFOs, it currently suffers from several limitations.First and most important, methane capture does notreduce the amount of nitrogen, phosphorus (inmost schemes), or water in manure. All of thesecomponents contribute to serious problems discussedthroughout this report. Biogas productionalso does not enhance manure’s value as a fertilizer,because CAFOs will face the same costs and hurdlesto distribute this technology’s liquid residues onfields as with liquid manure.Finally, biogas production does not address animalhealth or ethics issues related to overcrowdingand stress, the overuse of antibiotics that can compromisehuman health and increase health costs, orsome of the economic impacts of CAFOs on ruralcommunities (such as reduced multiplier effects).

68 Union of Concerned ScientistsWanted: Sound Agricultural PolicySystems that are propped up by billions of dollars inpublic subsidies are not inevitable. e CAFO systemhas been nurtured by government policies thatfavor intensive, industrial-style production—oenat the public’s expense. ese policies include heavilysubsidized feed grain, lack of accountability forwater and air pollution, counterproductive technologicalfixes such as the non-therapeutic use of antibioticsin livestock, and an ill-equipped regulatorysystem that looks the other way rather than confrontingthe growing economic power of largeprocessors.Because the success of CAFOs has dependedon favorable policies rather than any inherent advantagesin production methods, better policiescould reverse the damaging ways agriculture iscurrently practiced in this country. Such policieswould eliminate the artificial advantages currentlygranted to CAFOs, force CAFOs to take financialresponsibility for the environmental harm theycause, and support research that would furtherimprove alternative animal farming methods thathave already proven safer and better for ruralcommunities than CAFOs. Needed actions include:• Strict and vigorous enforcement of antitrustand anti-competitive practice laws under thePackers and Stockyards Act (which covercaptive supply, transparency of contracts, andaccess to open markets)• Strong enforcement of the Clean Water Act asit pertains to CAFOs, including improvedoversight at the state level or the takeover of responsibilitiescurrently delegated to the statesfor approving and monitoring NPDES permits;improvements could include more inspectorsand inspections, better monitoring and enforcementof manure-handling practices, andmeasurement of the effectiveness of pollutionprevention practices• Development of new regulations under theClean Air Act that would reduce emissions ofammonia and other air pollutants from CAFOs,and ensure that CAFO operators cannot avoidsuch regulations by encouraging ammoniavolatilization• Continued monitoring and reporting of ammoniaand hydrogen sulfide emissions as requiredunder the Comprehensive EnvironmentalResponse, Compensation, and Liability Act(CERCLA, commonly referred to as the “Superfund”)and the Emergency Planning andCommunity Right-to-Know Act (EPCRA)• Replacement of farm bill commodity cropsubsidies with subsidies that strengthen conservationprograms and support prices whensupplies are high (rather than allowing pricesto fall below the cost of production)• Reduction of the current $450,000 EQIP projectcap to levels appropriate to smaller farms, witha focus on support for sound animal farmingpractices• Revision of slaughterhouse regulations to facilitatelarger numbers of smaller processors,including the elimination of requirements notappropriate for smaller facilities, combined withpublic health measures such as providingadequate numbers of federal inspectors orempowering and training state inspectors• Substantial funding for research to improvealternative animal production methods (especiallypasture-based) that are beneficial to theenvironment, public health, and ruralcommunitiesWe believe that if CAFOs were required to takefinancial responsibility for the harm they cause, andentry into markets for alternatives was not held backby a heavily concentrated processing industry andpublic policies, efficient and safer alternatives wouldflourish.

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CAFOs Uncovered 83GLOSSARYAFO (animal feeding operation)A facility or feedlot where animals are confined athigh densities and fed grain for at least 45 days ayear. Includes CAFOs as well as smaller operations.Alternative animal productionAnimal farming other than CAFOs, including sustainablepractices such as access to pasture andmaintaining animals in small enough numbers or atlow enough densities that the nearby land can safelyabsorb the animals’ manure.Animal unit (AU)A value for counting animals that allows comparisonbetween livestock species. For example, the EPAdefines one AU as equal to one beef cow of feedlotsize (typically at least 500 lb. when entering thefeedlot) or 2.5 hogs over 55 lb.BiogasCombustible fuel produced from the methane inCAFO manure.CAFO (confined animal feeding operation)A large facility with at least 1,000 animal units(AU). e EPA defines a CAFO as a facility thathouses at least 700 dairy cows, 1,000 beef cattle,2,500 hogs over 55 lb., 30,000 broiler chickens producingwet manure, 125,000 broiler chickens producingdry manure (litter), or 82,000 laying hens.e EPA also defines smaller operations as CAFOsif they discharge manure directly into waterways.Captive supplyLivestock owned or controlled (through contractarrangements) by a meat processor. High percentagesof captive supply can reduce spot markets, potentiallyresulting in lower prices for producers thanin a healthy open market.Clean Water Acte federal law that regulates water pollution.CommensalOrganisms, such as bacteria, living in close associationwith other organisms in an arrangement that isbeneficial to one party and does not harm eitherparty. Some bacteria have a commensal relationshipwith their livestock hosts but are pathogenic tohumans.Commodity cropsCrops that are eligible to receive subsidies underTitle I of the federal farm bill, including corn,wheat, rice, soybeans, and cotton.Contract productionLivestock production based on an agreement tohouse, feed, and maintain animals supplied by ameat processor, then return the animals forprocessing when ready.Conversion efficiencye amount of feed needed to produce a unit of animalproduct.

84 Union of Concerned ScientistsCR4 (or four-firm concentration)e amount of market share held by the four largestcompanies within an industry. A value higher than40 percent oen indicates a level of concentrationthat can interfere with free-market mechanisms.Critical loade maximum amount of nitrogen that can be depositedon a specific type of soil before damage(such as decreased biodiversity) will occur.Direct subsidyPayment to a business that reduces or compensatesfor production costs. Direct subsidies provided infederal farm bills have compensated grain farmerswhen market prices fell below the cost of production.Diversified farmFor the purposes of this report, a farm that raisesboth livestock and crops. More generally, a farmthat raises multiple crops or crops and livestock.DowngradientA point within the earth toward which water from ahigher reference point will flow. In the case ofgroundwater, the gradient may not be reflected in aslope at the surface.Dried distillers grains with solubles (DDGS)e residue that remains aer corn has been fermentedto produce ethanol. Can be used to supplementlivestock feed.Economies of scaleReductions in the cost of production that accruespecifically to large facilities or companies because1) their costs are distributed over many units of productionand 2) they may have access to efficiencyimprovingtechnologies that are not accessible tosmaller companies.EQIP (Environmental Quality Incentives Program)A federal program that pays farmers to preventsome of the environmental damage they cause.Eutrophicatione degradation of a body of water due to thegrowth and subsequent death of vegetation thatlowers oxygen content as it decays, killing fish andother aquatic organisms. Excess nitrogen or phosphorusfrom CAFOs oen produces eutrophicconditions.Externalized costsEnvironmental and health costs (related to pollutionor increased illness, for example) that are borne bysociety instead of the enterprise responsible.Farm billA package of federal laws that establishes U.S. agriculturalpolicy and is typically renewed everyfive years.FeedlotsConfined areas that are open to the air or partiallyroofed and house thousands of beef cattle while theanimals are fattened on grain prior to slaughter.Finishing operationsFacilities where animals (beef cattle, hogs, broilerchickens) are fattened on grain prior to slaughter.Large finishing operations are usually CAFOs.ForagePlant material eaten by livestock, such as alfalfa andgrasses, stems, and leaves.Hoop barnsFacilities that house small to medium-sized inventoriesof hogs in structures with curved roofs and haybedding, oen with access to the outdoors. A moresustainable method of hog production than CAFOs.HypoxiaIn the context of this report, a condition of low oxygencontent in bodies of water, oen caused byeutrophication. Hypoxia related to CAFO pollutionhas contributed to the production of “dead zones” inthe Gulf of Mexico and estuaries along the EastCoast that cannot support fish or shellfish.

CAFOs Uncovered 85Indicator speciesOrganisms such as bacteria whose presence suggeststhe simultaneous presence of other organisms thatmay be more difficult to detect.Indirect subsidySupport a business receives as a result of direct subsidiespaid to another party (e.g., low prices for suppliesresulting from subsidies paid to the supplier).InputsSupplies such as the feed, water, and antibiotics usedto produce livestock.Integration (or vertical integration/coordination)Ownership or control of multiple stages of productionby a single entity. In the context of animal production,meat processors oen control multipleproduction stages (e.g., breeding, rearing, finishing,slaughter, processing, distribution) through livestockownership or contract arrangements with ananimal producer (such as a CAFO).LagoonsOpen-air reservoirs that store liquid manure fromCAFOs.Littere mixture of poultry manure, excess feed, andbedding material (such as wood chips) that buildsup in broiler facilities.LivestockAnimals raised for their meat, milk, and eggs. Forthe purposes of this report, the term includes chickensalong with cattle and pigs.Loan deficiency paymentsDirect subsidies paid by the federal government tocompensate commodity crop growers for low marketprices.Management intensive rotational grazing (MIRG)A method of raising livestock on pasture in whichthe animals are moved periodically so no single areais overgrazed. e rate of livestock movement isbased on the optimum grazing levels for different foragespecies under different environmental conditions.MorbidityDisease, or the incidence of disease, in a population.Multiplier effectAmplification of the value of money by its circulation(exchange) in the local community (throughthe purchase of goods and services). e effect increasesas circulation in the community increases.National Pollution Discharge Elimination System(NPDES)A pollution control program under the Clean WaterAct that 1) sets limits on the amount of specific pollutantsthat may be discharged from an individual sitesuch as a CAFO, 2) issues permits for pollution discharge,and 3) enforces monitoring and reporting requirements.e program is administered by the EPA.PM2.5Fine particulate matter (2.5 microns in diameter orless) that can cause respiratory disease when inhaled.Processinge slaughter of livestock, carcass dressing, andpackaging and distribution of the finished animalproducts.Spot marketA real-time open market for sales of animal products;functions as an alternative to contractproduction.SprayfieldLand that is close to a manure storage facility andfertilized with liquid manure distributed bysprayers.

86 Union of Concerned ScientistsSubsidiesPayments that artificially support an industry by offsettingits costs of production or compensating producersfor low market prices.TurbidityCondition in which the passage of light throughwater is impeded.UpgradientA point within the earth toward which water from alower reference point will not flow. In the case ofgroundwater, the gradient may not be reflected in aslope at the surface.Volatilizatione transformation of pollutants (such as the ammoniain manure) into their airborne form.Willingness to accept manure (WTAM)e percentage of farmers willing to accept manurefrom CAFOs or AFOs for application on their cropfields or pastures. Typical rates are between 5 and 20percent for farmers of commodity crops such ascorn, soybeans, and wheat.

The U.S. livestock industry—a large and vital part ofagriculture in this country—has been undergoing adrastic change over the past several decades. Huge CAFOs(confined animal feeding operations) have become thepredominant method of raising livestock, and the crowdedconditions in these facilities have increased water and airpollution and other types of harm to public health and ruralcommunities.National HeadquartersTwo Brattle SquareCambridge, MA 02238-9105Phone: 617-547-5552Toll-Free: 800-666-8276Fax: 617-864-9405Washington, DC, Office1825 K Street NW, Suite 800Washington, DC 20006-1232Phone: 202-223-6133Fax: 202-223-6162West Coast Office2397 Shattuck Avenue, Suite 203Berkeley, CA 94704-1567Phone: 510-843-1872Fax: 510-843-3785Emailucs@ucsusa.orgCAFOs are not the inevitable result of market forces.Instead, these unhealthy operations are largely the result ofmisguided public policy that can and should be changed.In this report, the Union of Concerned Scientistsanalyzes both the policies that have facilitated the growthof CAFOs and the enormous costs imposed on society byCAFOs. We also discuss sophisticated and efficientalternatives for producing affordable animal products,and offer policy recommendations that can begin to leadus toward a healthy and sustainable food system.Webwww.ucsusa.orgPrinted on recycled paper usingsoy-based inksUnion of Concerned ScientistsCitizens and Scientists for Environmental Solutions