The Iowa Environmental Protection Commission held a hearing at Clarion in Wright County on Nov. 15 to gather public comment on the Prestage Farms $240 million pork processing plant to be built there. The commissioners also heard from people concerned about the $264 million slaughter facility coming online in Sioux City in 2017.

Fear new pork plants will encourage growth in hog confinements
About 30 members of Iowa Citizens for Community Improvement showed up at the meeting, asking the IEPC to place a moratorium on allowing new or expanded hog confinements in the state. The commissioners said that’s an issue the Iowa Legislature would need to decide. ICCI members fear the pork processing plants will encourage more growth in the size and number of hog confinements.

The ICCI members say Iowa needs tougher rules, regulations and inspections of hog facilities to protect water and air quality. They blame hog confinements for many of Iowa’s air and water quality problems, saying manure from the facilities used to fertilize Iowa cornfields pollutes the state’s rivers and lakes.

Hog facility applications for north-central Iowa are 5% higher
ICCI cited state data through Oct. 25 showing applications for new or expanded animal feeding operations in north-central Iowa are about 36% higher than last year and double the applications through the same time in 2014. The Iowa Department of Natural Resources data include all livestock production (beef cattle, dairy cows, poultry and hogs) for the 15-county region. Quarterly data through September show hog production facility applications for north-central Iowa are 5% higher than third-quarter 2015. Statewide, hog producer requests to expand hog facilities through September lags last year by 3%, Iowa DNR’s data show.

Prestage received state and local incentives last summer to build its new plant in Wright County, 5 miles south of Eagle Grove. The North Carolina-based company says it will create about 900 jobs for nearby communities. The plant, processing 10,000 hogs per day, is expected to come online in 2018.

One reason for depressed hog prices is shortage of packing capacity
Despite low corn and soybean prices for feed, hog producers are suffering financial losses, making it a difficult time to expand, said Greg Hora, an Iowa Pork Producers Association Board member. “We’re not breaking even.” One reason for depressed hog prices this fall is a shortage of packing capacity, said Dermot Hayes, an Iowa State University economist. Fall tends to bring a large number of animals to meat packing plants which are setting new records for processing this fall.

The lack of processing capacity is shifting profits to packers from producers, Hayes said. The new Iowa plants will help bring that back in balance. “It will help producers capture more of the value. These plants will help fix things, but it will take a while.” Hayes said the new Iowa plants should improve profitability for producers who live near the plants, so you would expect them to expand hog production.

Prestage decided to build here because Iowa lacks packing capacity
Iowa is the nation’s largest pork producing state, raising about 50 million pigs annually. About 6.5 million are raised within 250 miles of the Prestage plant. Hora said the plant, which expects to take 40% of the hogs it processes from independent producers, should help improve prices. Producers will have more choice on where they sell their hogs. Tyson and Cargill operate large meatpacking plants in Iowa. The new Prestage plant, along with the Sioux City plant owned by Seaboard Foods and Triumph Foods, will provide more competition.

Prestage officials say they plan to open their plant in Iowa because the state lacks packing capacity. Iowa currently raises about 30% of the nation’s pork but only has 25% of the meat packing capacity. Prestage spokeswoman Summer Lanier said pork production grows about 1% to 2% annually, “independent of the number of new processing plants opening or old ones closing.”