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Corn+Soybean Digest

The War for the Customer Next Door

The smell of farm country will ultimately drive the American hog industry offshore, prompting you to ship your commodities farther to reach customers. That's the long-term view of Jim Moseley, former deputy secretary of agriculture under George W. Bush, and undersecretary for natural resources and the environment under George H.W. Bush.

He sees a growing intolerance in rural communities of confinement odors. The long-term result will be to drive livestock production to regions of the world that view the tradeoffs more favorably.

“There continues to be a strong and growing bias in rural communities against building a confined livestock facility,” he says. “The major issue for producers in today's affluent society is being able to find a location where neighbors will allow these animal facilities.

“The major issue of course is odor, trailed by animal rights concerns,” he says. “At some point, and I think the trend is well developed, confinement units will move to regions willing to accept them in return for the jobs and economic stimulus they provide. This may be in Mexico, Eastern Europe and China.

“I'm not trying to be an alarmist. It's just the long-term view that I lay out as I advise our next generation,” Moseley says. “I do not believe we will rewrite history and return to raising livestock the way we did when I was a kid in the 1950s and 1960s, at least in scale of present-day output. The environmental consequences of that are much more challenging than what we have today. At least we have the opportunity to manage the environmental outcomes in these facilities. People simply don't recall what it was like to have hundreds of pigs outside on the land. The fact is we had lots of waste that found its way into streams.

“I don't think we will revert to that, and I don't think society as it's evolving will tolerate violating their sense of smell, having animal operations located in rural America, even in the Corn Belt, where you have the most efficient cycling of nutrients,” Moseley says.

“I SEE GREAT potential for livestock production in places such as China that really want it, although they probably won't be able to grow the feedstuffs, meaning they will continue to buy U.S. corn and beans. However, there is a tendency for the related shipping costs to come back to the first producer. In a business where margins are already very narrow and 20¢/bu. makes the difference in profit, it's a significant cost development to have to ship product to Eastern Europe or Asia rather than next door.”

Moseley adds, “Animal rights issues are secondary to the odor issue, even though that's an accelerating force. Finally, there is also the social question of economic distribution that logically arises from the vertical integration model. How the wealth is divided between various layers of the model will continue to be a complicating issue that attracts activists against it.

“It's a complex issue that confronts livestock producers in all affluent societies. All of this garners little political support in legislative bodies when the debate enters the open territory of the media. These issues are better in the public psyche when viewed half a world away,” Moseley says.

“I assume, however, that we will continue to be the world leader in technology development for crop production and that production will stay at home, though, with environmental constraints for things like dust, noise and spray drift. However, as a sidebar to that, we will see a fairly significant development: a continued decline in bulk commodity production. I tell my son, ‘You'll likely be a contract grower with the end user for specific genetically derived traits, and you may not even own the commodity.’”

Moseley summarizes, “In this country, long-term social development pressures will slowly, meth-odically de-capitalize our livestock industry. The model of integration within agriculture, while efficient economically, lends itself to the concentration of capital to other parts of the world where those societies are more open to these facilities.

“We see this evolution in American society throughout; it's fascinating to me to watch the majority of people in the political decision-making process,” Moseley says. “They are not considering their own personal responsibilities any longer; we really want what an affluent society desires, yet are not willing to tolerate from others the less desirable things that go with it. It parallels the conflict between driving an SUV for personal needs, yet demanding high air quality standards for the country.

“I ask people to make sure that that gorilla they're worried about really is a gorilla, and not just a monkey that might irritate you from time to time,” Moseley says.

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