Monday, July 13, 2009

Punctuated equilibrium...

Some models for evolution center on the concept of long periods with little species change interspersed with rapid and dramatic events that alter the course of development.  I think we could be seeing that in agriculture.

While the first example that might spring to mind is ethanol, I'm beginning to wonder if a punctuation mark may be forming in our livestock industry. And it won't be a comma, it will be an exclamation point.

Several outside influences are driving the change. One is long festering environmental issues with manure and waste.

Handling chicken waste has long been part of doing business in this watershed. For decades, farmers took clumps of bird droppings, bedding and feathers from the houses and spread them on their land as an inexpensive fertilizer for other crops. The two states sanctioned this by issuing the farmers permits, and the industry says no individual companies or farms have been accused of violating environmental regulations.
But Edmondson says the sheer volume of the waste spread on the land — estimated at 345,000 tons per year — has wreaked environmental havoc. Runoff carries bacteria into lakes and streams, where it threatens the health of tens of thousands of people who boat and camp in the valley every year. He says the industry took the least expensive way out when it could have burned the litter as energy, processed it into pellets or even composted it until the pathogens died. [More]

It does not require outright bans on manure application to radically alter the business model for these farmers. The highly concentrated meat industry has methodically pushed margins to the limit to make the consumer product as cheap as possible.  So any extra cost along the way to address such issues will have growing impact along the value chain.

The other important aspect of this action is it often occurs in the courts, making it less susceptible to the formidable ag lobby.  At the least, it would take too long for legislative action to reverse judicial rulings with new laws for the industry to wait it out.  Changes will have to be made.  Undoubtedly they will not be cheap.

Another growing driver of change is the relentless pressure from animal rights activism. While states like Ohio and Michigan are trying to preempt a California-like predicament, I'm not so sure this is a battle that is clearly winnable in the realm of popular opinion.
 The farm lobby is backing bipartisan legislation that would put into law the agriculture industry’s guidelines for farm animals’ health and welfare, and require audits of livestock farms. A 10-member council would review and possibly update animal care standards at least every five years and local governments would be pre-empted from setting their own rules.
Upset by what it calls the industry’s “blatant power grab” in the debate, the Humane Society of the United States is threatening a 2010 ballot initiative to give farm animals in confined spaces more room. Voters passed similar proposals in Arizona, California and Florida. Governors and lawmakers also enacted measures in Colorado, Maine and Oregon. [More]
Still, at least the meat industry is deploying new tactics.  Regardless of where you stand on these issues, there is a communications development for which the livestock industry has little defense: viral video.

It is not enough any longer to control the debate in the MSM. Ask United.  For the most part, I don't think farmers truly grasp how differently we view animal handling practices from other people. Cell phone video scenes from slaughterhouses, feedlots, laying buildings, farrowing houses, etc. are ideal for 30-second spots during a initiative campaign.

While efforts to keep such media from being recorded is one approach, it looks like a security impossibility to me. The resultant pictures have enormous emotional power making mere words and economic models pitifully impotent.  Even the vaunted farmer-esteem ratings may prove too little to sway popular sentiment when in the voting booth.

While I have no evidence to support this guess, I can also believe many parties in the US would not be dismayed to see meat priced higher, lowering the demand, and possibly reducing some diet-related health problems.  While I do not subscribe to this plan, it seems to be a background theme in modern food policy thinking.  Add one more influence for change impacting livestock of all kinds.

Finally, the tiny agrarian output of meat, while not a serious market competition, does serve as an unhelpful comparison to the picture of modern animal agriculture. While illogical, I'm not sure consumer minds can continue to make the trade-off between economic advantage and anthropmorphized visions of animal care.  The test, I think, will be if we see a decline in prepared (restaurant) food purchases compared to ingredient purchases - in other words, if America starts cooking again.  Even a small shift would have retailers scrambling to provide desired products.

The wrenching changes I see for CAFO-dominated meat production will further erode feed demand as meat becomes more expensive. Their punctuated equilibrium will become my future as well.


Ol James said...

...burn it.!!
There are also plants in Denmark, England, and other countries doing this. Missouri has just put a plant on-line.
I applaud Ohio and other states that are putting into effect legislation to handle livestock.
Before long those McNuggets will be 2-for-1.

Anonymous said...

John - You got that right. You sure got that right! The train wreck that is livestock ag. for profit will soon be the train wreck for grain farmers too. Increasing carryouts for corn, wheat, and soy make that pretty clear.

Anonymous said...

John - Good insight, what do you plan to do in your business to adopt to the changes coming?