Chapter 2. Industry Structure and Trends in Iowa

Chapter 2. Industry Structure and Trends in Iowa Stewart Melvin Professor, Department of Agricultural and Biosystems Engineering Iowa State Universit...
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Chapter 2. Industry Structure and Trends in Iowa

Stewart Melvin Professor, Department of Agricultural and Biosystems Engineering Iowa State University John Mabry Professor, Department of Animal Science and Director Iowa Pork Industry Center Wendy Powers Assistant Professor, Department of Animal Science Iowa State University James Kliebenstein Professor, Department of Economics Iowa State University Kelley Donham Professor, Department of Occupational and Environmental Health University of Iowa Carol Hodne Postdoctoral Research Fellow Environmental Health Sciences Research Institute University of Iowa

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Abstract Animal production trends in the United States and Iowa are reviewed to illustrate the changes in the animal industry over the past 50 years. Total production from the major industries are presented along with the changes in numbers of producers and average size of production units. Rapid consolidation of the industry is evident in both poultry and swine production systems in Iowa. Cattle numbers continue to decrease in the state.

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2.0 Introduction The structural changes of the animal industry in Iowa and the related concentration trends are very similar to those seen in most industries in the United States. Overall consumption of animal products has either increased or remained stable over the past 20 years while the number of farms producing these products has greatly diminished. These trends are very similar to those seen in other industries such as construction, food processing, banking, general manufacturing, real estate, services and pharmacy. This results in a large increase in the average size of the active farms in Iowa. The number of active farms in Iowa has been reduced from over 200,000 in 1950 to fewer than 100,000 in the late 1990s as seen in Figure 1(6). NUMBER OF IOWA FARMS 250

THOUSANDS

200

150

100

50

0 1940

1950

1960

1970

1980

1990

2000

2010

YEAR

Figure 1. Number of Iowa farms. A farm in Figure 1 is defined as any operation that sold more than $1,000 in agricultural products. The number of farms owning and operating confined animal feeding operations (CAFOs) will be much less than the above table. However, the trend in declining numbers of farms is obvious. The trend toward fewer farms in Iowa is accompanied by a reduction in the percentage of Iowa farms that have hogs or cattle as a component of their agricultural business. Figure 2 shows that in the early 1960s over 80% of Iowa farms had cattle as part of their operation and 70% had hogs as part of their farming operation. The percent of Iowa farms that included cattle in their farming operation has declined to less than 40% as of 2000, while the percent of Iowa farms that included hogs in their farming operation has declined to approximately 12%.

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Percent of Iowa Farms with Hogs or Cattle 80% 70% 60% 50% 40% 30% 20% 10% 0% 1964

1969

1974

1978

1982

1987

Hogs

1992

1997

1998

1999

2000

Cattle

Figure 2. Percent of Iowa farms with hogs or cattle. 2.1 Swine Industry Changes There are several very distinct trends that can be seen in the U.S. pork industry in the areas of production, processing, environment, vertical integration/coordination and the adoption of technology. The trends being seen in production of pork are shown in the following Table 1. (Lawrence and Grimes, 2001). Table 1. Changes in USA Pork Production in Number of Farms and Percentage of U.S. Marketings Number of Farms % Marketings Herd Size 1997 2000 % Change 1997 2000 --------------------------------------------------------------------------------------1-50 69,460 54,513 -27% 3% 2% 50-250 20,142 17,464 -15% 28% 17% 250-500 1,978 2,627 +33% 10% 10% 500-2500 1,318 2,501 +90% 16% 19% 2500-25,000 127 136 +7% 16% 17% 25,000+ 18 20 +11% 27% 35% --------------------------------------------------------------------------------------The production structure of the U.S. swine industry has changed dramatically in terms of size and location over the past few years. The above table shows the change in numbers of pig-producing farms and marketing percentages over just the past three years. We have recently seen a great reduction in the number of small hog farms ( 1,200,000 1,200,000

Figure 13. IDNR permitted swine operations by size (weight). The most prevalent permitted CAFOs in Iowa at the present time are those occupied by hogs. These permitted hog CAFOs are somewhat variable in their size, as shown Figure 13.

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Table 4. IDNR animal number estimates. Livestock Production Numbers Animal Unit conversion

PORK

12,900,000 head

Pork produced in facilities large enough to require manure management plans (including permitted operations) = 3,500 operations (85% of IA hogs raised)

5,160,000 au

2,277,000 head

Pork produced in facilities not required to submit manure management plans, nor required to be permitted.

910,000 au

15,177,000 head

Total Production Animal Unit conversion

BEEF 365,000 head

Beef produced in facilities containing over 1,000 head

365,000 au

635,000 head

Beef produced in facilities containing less than 1,000 head

635,000 au

1,000,000 head

Total Production Animal Unit conversion

COW/CALF 1,200,000 head

Iowa Cattlemen’s Association estimation

1,200,000 Animal Unit conversion

DAIRY 32,400 head

Dairy animals produced in facilities requiring a manure management plan

45,360 au

183,600 head

Dairy animals produced in facilities that are not required to have a manure management plan

257,040 au

216,000 head

Total Production Animal Unit conversion

TURKEY 7,5000,000 head

Estimate production from Iowa Turkey Federation

7,5000,000 head

Total Production

135,000 au

Animal Unit conversion

POULTRY 35,000,000 head

Layers – estimated by Iowa Poultry Association

350,000 au

5,000,000 head

Broilers – estimated by Iowa Poultry Association

50,000 au

40,000,000 head

Total Production

Source: Iowa Department of Natural Resources

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Locational Trends in Iowa Figure 14 illustrates the location of CAFOs in Iowa where there are registered open feedlots or manure management plans have been required under current Iowa regulations. There is a definite concentration of these units in north central, west central, and the extreme northwest corner of the state. Manure management plans are required for all operations with animal weight capacity of over 400,000 pounds of cattle or more than 200,000 pounds for all other species and the operation was constructed or expanded after May 31, 1985.

Figure 14. Location of larger animal feeding operations in Iowa(Source IDNR)

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Figures 15 and 16 illustrate the changes in concentration of the swine industry in Iowa over the tenyear period from 1987 to 1997. In 1987, there is a relatively uniform distribution of animals across the state whereas in 1997, there are significant concentrations of swine in various parts of the state, especially in northwest and north central Iowa where significant new operations were developed during that time period. The total number of animals has not changed significantly. Therefore some areas have lost swine populations while others have gained significant numbers during the tenyear period. This trend for concentration has continued since 1997.

Figure 15. Map of swine numbers in Iowa per county, 1987(Miller, 2002)

Figure 16. Map of swine numbers in Iowa per county, 1997(Miller, 2002)

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Conclusions It is obvious that animal agriculture in the United States and in Iowa has changed over the past years and will continue to change. There is an increased awareness of environmental and other problems associated with current production systems. This awareness is leading to a rethinking of our current approach to animal production. Changing consumer preferences and lifestyles offer new options and alternatives for animal production. Policies are needed to protect both producer and consumer from being adversely affected. Many forces impact the livestock industry. The bottom line is that profitability and sustainability are needed. Over time the industry had fewer and larger farms with a higher level of specialization. Access to information is becoming more vital for effective management decisions such as technology adoption. These decisions can be odor management or a host of other production/management issues. Collaborative efforts are increasing. These efforts involve all industry stakeholders, input suppliers, producers, processors, retailers, and policy makers. Information access is increasingly important and cuts across all stakeholders. Among other issues it aids in establishing workable and effective policy decisions. Animal production is an important part of the Iowa economy but this production needs to be conducted in environmentally sound and sustainable systems to provide the best quality product to consumers while protecting the environment. Iowa can and should remain a leader in production of high quality, environmentally sound animal products. Odors and emissions from CAFOs have been of concern in Iowa for many years. However, the concentration of animals into larger, more concentrated units has increased the visibility of the potential problems resulting from these major structural changes. The remainder of this report addresses the potential community health impacts of CAFOs.

References 1. 2. 3. 4. 5. 6. 7. 8. 9.

Buttel, F. H., & Jackson-Smith, D. B. (1997). Livestock expansion in Wisconsin: Farmers’ views on the benefits and costs of large-scale livestock production. PATS Research Report #2. Madison, WI: University of Wisconsin. Duffy, Michael. 2001. Agricultural Economist. Personal Communication. December. http://www.econ.iastate.edu/faculty/lawrence/Acrobat/Staffppr343FNL.pdf http://www.econ.iastate.edu/faculty/lawrence/BeefStat/frames.html http://www.econ.iastate.edu/faculty/lawrence/PorkStat/porkstat.htm http://www.econ.iastate.edu/outreach/agriculture/periodicals/chartbook/Chartbook2/frames.html Lawrence, John D. and Glenn Grimes. 2001. Production and marketing characteristics of U.S. pork producers, 2000. Staff Paper No. 343. Department of Agricultural Economics, Iowa State University. August 2001. Maybry, John. 2001.Pork Industry Center Director. Personal Communication. December. Miller, Gerald. 2002. Personal Communication. January.

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