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Lessons From Iowa: Agribusiness & Vertical Integration

Karl Schenk's 2400-head hog barn in Yankton County

Confined animal feeding operations (CAFOs) are controversial. Opponents worry about pollution, animal welfare, disease spread, and the general aesthetics of the operations. Proponents argue that large-scale animal confinement is cost-effective, humane, effectively regulated, and a huge opportunity for economic growth in the state.

Governor Kristi Noem would like to boost rural development. Senate Bill 157 will streamline the county permitting process for projects that require conditional use permits — like hog barns and wind farms. On In the Moment, we explored the impact of CAFOs by talking with journalists who have done extensive reporting on the topic.

Tom, Art, and John Cullen, photo by Delores Cullen courtesy artcullen.com

First we welcomed Art Cullen, editor and co-founder of the "Storm Lake Times." Cullen was awarded the 2017 Pulitzer Prizefor editorial writing for his scathing coverage of Iowa agribusiness, pollution, and corruption. He spoke with us about the difference between Iowa politics and South Dakota politics and how the environmental catastrophe in Iowa might be prevented here. (Scroll down for transcript.)

Bart Pfankuch, photo by Lee Strubinger

Then Bart Pfankuch, content director for South Dakota News Watch, joined us to talk about their investigation into South Dakota CAFO development.

SDPB's Lee Strubinger also joined us to talk about Senate Bill 157 and what will change in the state conditional use permit process should the legislation be signed by the governor. Follow SDPB's ongoing coverage of CAFOs, conditional use permits, and the South Dakota state legislature at sdpb.org.

Paperback edition of Art Cullen's "Storm Lake: Change, Resilience, and Hope in America's Heartland"

Art Cullen wrote about the transformation of Iowa agribusiness in "Storm Lake: Change, Resilience, and Hope in America's Heartland." Here is the transcript from In the Moment host Lori Walsh's conversation with Art Cullen, recorded on Friday, March 6, 2020.

Lori Walsh:
Welcome to In The Moment. I'm Lori Walsh. As Governor Krisit Noem and the South Dakota state legislature prepare to change the regulatory framework for county conditional use permits, we've been exploring the potential changes for rural development — specifically regarding hog barns and wind farms. Art Cullen is editor and co-owner of the “Storm Lake Times” in Iowa and the winner of the 2017 Pulitzer Prize for Editorial Writing. He was honored for his tenacious work exposing agribusiness for polluting Iowa's waterways and soils. He's been on In The Moment before when he came to South Dakota for a presentation, and he has a new book that's new in paperback. It's called "Storm Lake: Change, Resilience and Hope in America's Heartland." He joins us now on the phone from Storm Lake. Art Cullen. Welcome back. Thanks for being here.

Art Cullen:
Well, thanks for having me.

Lori Walsh:
I am really enjoying the book. I'm so glad that it is in paperback right now, and I wanted to start with the book a little bit because the “Storm Lake Times” as a newspaper launched in 1990 during a particular time in your community's history. This is your hometown, and you were trying to really make it as a journalist in other places and in bigger cities. You came home to be part of this, and you kind of landed in a time when agribusiness was really changing. Tell me a little bit about some of the changes that were happening in Storm Lake at that time and how that was unfolding then, right at the time when the paper was really born.

Art Cullen:
Well, 1990 followed fairly closely on the heels of the mid-1980s farm crisis when the pork industry largely vertically integrated. At the same time there's a lot of consolidation in meatpacking. And furthermore, all the farm boys who used to work in the packing plants were kind of driven out of the state for Oklahoma and Texas during the farm crisis — there was nobody left to work in the packing plants. So Storm Lake became largely an immigrant community. First with southeast Asian refugees from Laos, and then in 1990, the same year we started the newspaper, we started to see a large influx of Latinos in Storm Lake, and today about 90 percent of our elementary school is children of color. And we're just reporting in today's paper that we're adding three elementary sections. It's one of the few rural communities in the state that's actually growing.

But at the same time, we watch the number of farms drop in half. And in 1998, sort of the last of the independent pork producers were driven out of the business by the Wall Street consolidators, led by Smithfield, owned by the Chinese. And all those independent pork producers went out of business. And virtually all hogs went into confinement, owned by Wall Street money. And the same thing with poultry — turkeys and chickens were moved indoors. And so now we have a confined animal feeding system and there's so many hog houses in Iowa. The Iowa Department of Natural Resources can't even keep track of them anymore.

Lori Walsh:
Explain to people how, when you said vertical integration, how exactly does that work?

Art Cullen:
Where the meat packer owns the hog from birth to slaughter. So Smithfield, for example, will have a farmer who owns a building. They'll essentially rent the building from that farmer to put in their hogs, and then he'll tend the hogs for him for a fee. And that's about the only way a farmer can make money anymore. You lose money on your corn and soybeans, and then you make it up maybe $20,000 a year by running some hog buildings for the Chinese.

Lori Walsh:
When that consolidation was happening and those hog barns, those confined animal operations, were going up and the transition was occurring, was there a regulatory pathway that opened? Did something change that opened the door for that? Was there opposition to it from neighbors? What did that look like and sound like on the ground?

Art Cullen:
Well, back in the 1980s when we really saw the expansion start in Iowa — also remember Iowa is the number one hog state in the country. We have a hog culture here. To be the Iowa Pork Queen is a big deal. So there wasn't really the kind of opposition that you see today, now that Iowa is saturated with hogs in confinement. Again, because farmers were so desperate, who wanted to tell Old McDonald that he couldn't run that hog building for Murphy of North Carolina, which is now Smithfield. Then there's Iowa Select and several other integrated feed hog companies that have contracts with the packers. And so who's going to say you can't have a hog house? We know you're going broke. And so no, we're not going to let you have that hog house.

At the same time, the Iowa legislature essentially stripped local control from counties over siting of livestock facilities. So there's no zoning. You can't zone out a livestock confinement, because they didn't want 99 counties setting 99 different sets of rules, they said, but really what it allowed is for the state to control livestock development on behalf of the big integrators. It's a lot easier for the big integrators to fight one battle in the state legislature. It's easier to buy those legislators than it is to buy every county board of supervisors. And it's a lot cheaper for them to buy just one legislature.

Lori Walsh:
When did people in Iowa, farmers and neighbors and community members, realize some of the impact of the agricultural pollution of waterways and what was happening to the soil?

Art Cullen:
Well, in the early 1990s there were starting to be nuisance lawsuits that were filed, including a couple seminal nuisance lawsuits in this area of the state, northwest Iowa, where the heaviest concentration of hog houses is, and it's surrounding meat packing plants. Hog houses concentrate around meatpackers. And so there were nuisance lawsuits over smell. And so then the hog industry, rather than having open sewage pits, they put the pits beneath the buildings, underneath the building. So they didn't stink as bad. Things like that.

There were some industry responses, but again, the Iowa Farm Bureau and the Iowa Pork Producers Association are the two most powerful political interests in the state, I guess along with the Iowa Corn Growers, who support the pork industry. And these are the most powerful political players in the state. And so any opposition by groups like the Iowa Citizens for Community Improvement are pretty well ignored in the Iowa legislature because again, the Farm Bureau owns the legislature. So it's one of the least regulated environments in the country.

Lori Walsh:
So one of the things that's happening in South Dakota echoes what you're saying about this desire to have some consistency when projects are being planned to deter what the governor calls "frivolous lawsuits" and to really put a cap on how quickly people have, how much time they have to appeal a permit decision, down to 21 days and a simple majority versus a two third majority of the board. When you hear things like that, does that sound familiar to you to what happened in Iowa? Are we just a little bit behind you on this?

Art Cullen:
Except in Iowa, there's no ability to appeal whatsoever. You can appeal to the County board of supervisors who then send your appeal onto the State where it's automatically rejected. Because if the developer meets a certain set of criteria, it can say, I have a manure management plan. In other words I have a place to dump this manure, then they're automatically approved and these manure management plans are then put on file and never looked at again. And so nobody really knows where all this manure is going. Well, we do know where it's going. It's going into our rivers and lakes. So yes, the same thing is occurring in South Dakota. Obviously, the livestock industry trying to control everything about how these confinements are developed, and it's just that we were starting from a point of even less regulation than what you have.

So it wasn't as far a jump in Iowa. But again, hogs are sacred cows as it were, in Iowa. You cannot mess with the hog industry. And there's been a lot of opposition in recent years by neighbors and people, these big honey wagons are ruining our gravel roads. And then we have semi-trucks going out to hog facilities on gravel roads, big semis and they're ruining our roads. They're polluting our water and it smells like shit around here constantly. That's just an accepted way of life now. And people rise up in opposition to it, but there's no way to fight it when you have a Republican legislature and a Republican governor who are all funded by the Farm Bureau and the pork producers and the corn growers, and there is just absolutely no way to regulate agriculture in Iowa.

South Dakota is as conservative, if not more so than Iowa. Although I do believe South Dakota has more of a natural resource ethic than Iowa does — you actually depend on fishing and hunting for tourism dollars and Iowa could care less about that.

Lori Walsh:
What were some of the obstacles, the work that you won the Pulitzer prize for in 2017, the reporting that you did on this was the editorial writing was scathing and honest and direct and state lawmakers are no fan of Art Cullen. To the point where I don't think they could even agree to congratulate you on winning the Pulitzer prize, if I have my information correct.

Art Cullen:
Fortunately, the Republic of Ireland, the Senate, once they heard that the Iowa Senate wouldn't honor me, along with the girls' state basketball champions, the Irish Senate did. They said if your own state won't recognize you, please understand that an entire nation stands with you. Take that Iowa Senate!

Lori Walsh:
Wow. Congratulations. This was such an obstacle to tell that story, and when the evidence became clear about what was happening in the waterways — explain that a little bit to people, to recap how some of that information unfolded and really who was taking money to fight some of those lawsuits and where that money was being funneled from.

Art Cullen:
Yeah. There was a lawsuit filed by the Des Moines Water Works against three Northwest Iowa counties, including Buena Vista County, three adjacent counties for nitrate pollution of the Raccoon River from which Des Moines draws its drinking water. And because of the heavy nitrate levels in the Raccoon River, the Des Moines waterworks has to operate North America's largest nitrate removal system and it costs about a hundred million dollars to build them a new one. And their old one's worn out.

And so they sued our County under the Clean Water Act, the 1972 Clean Water Act, which exempts agriculture from pollution claims because agriculture is considered a non-point source of pollution. A sewage plant has a pipe, that's a point. And so that sewage pipe can be regulated under the Clean Water Act. But with a thousand farms, that's considered non-point solution. There's no single pipe. Well, the Des Moines waterworks argued that there was this large underground drainage system in Northern Iowa, a drainage tile that was actually, that was the point where that tile meets the river is the point source of pollution is delivering fertilizer-laden water to that drainage pipe, to the Raccoon River.

And so they sued and since it was a pollution lawsuit, the counties didn't enjoy insurance coverage. So we asked the counties, "How are you going to cover your defense costs in this lawsuit?" And they said,, essentially, “It's none of your business. We have friends." And we said, "Well, who are your friends?" And they said, "Are you hard of hearing? It's none of your business." Well, our own reporting revealed that their friends were Monsanto and the Koch brothers primarily and along with the Farm Bureau and the corn growers and the Iowa Drainage District Association and the fertilizer industry in general, because all this commercial fertilizers was raising the nitrate levels in the Raccoon River. And so we tried to demand, under Iowa's Public Records Law, that they reveal who these donors were and they refused. And that's when we found out through our own reporting who was actually coordinating this.

And it turns out it was a former chief of staff to the governor who was actually coordinating all the fundraising into this dark money account that was funding the defense of this lawsuit. And so it became obvious that we, the taxpayers and electors of Buena Vista County weren't really running the board of supervisors anymore. The board of supervisors was being run out of Wichita, Kansas, headquarters of the Koch brothers and St Louis, Missouri, at that time home of Monsanto. Now it's owned by Bayer, a German company. And the lawsuit was unsuccessful.

The defense, they spent $1.7 million in dark money defending that lawsuit. And so it still remains that you cannot regulate agriculture in Iowa. And so you can dump all the commercial fertilizer you want in the river if you're standing on a farm and there's nothing that anybody will do to prevent it. And that is true in South Dakota as well. You can put all the anhydrous ammonia you want on the ground to grow 200 bushel corn that the world doesn't need. In fact, the markets tell us we're growing about 30 percent too much of it. And now we're planting corn in South Dakota and North Dakota for no apparent reason. And we're dumping anhydrous ammonia on that ground and it's ending up in the Big Sioux river, which now has nitrate levels as high or higher than Iowa's. And it didn't use to.

Lori Walsh:
When you talk about the markets, I want to talk about the international demand for hogs and what's happening there. Is that growing, increasing, what's going on?

Art Cullen:
Yeah, it's growing. Two new packers have come online and Iowa, one in North Central Iowa, near Eagle Grove, Iowa, and another in Sioux City, Seaboard in Sioux City. So that's where the demand for new hog houses is coming from. And again, Iowa is pretty well saturated with them. They’ve got to go somewhere, so they're going into Minnesota and South Dakota to fulfill this packer demand, which is coming from China.

The entire second shift at the Eagle Grove plant was planned just for Chinese export. And there's a new plant in Windom, Minnesota, all the pork is bound for Asia and the Seaboard plant too, in Sioux City. A significant share of its pork is going to Asia as well. And now with African swine flu, the Chinese swine herd has been cut in half. And so the Chinese are going to have to be buying a lot more American pork with or without a trade deal. And Donald Trump can't take credit for that because they gotta feed their people. So that's where that pork is coming from. It's going to be coming from these new barns in South Dakota and it's going to China.

Lori Walsh:
How fast can they go up? Iowa has thousands of CAFOs. South Dakota has hundreds. How fast can you see them build and expand?

Art Cullen:
Oh, one a week.

Lori Walsh:
Really?

Art Cullen:
Well a lot more than that actually. You've got to pour the concrete pit and then put a metal building on top of it. And how long does that take? Not very. And so it can expand very rapidly. As rapidly as the swine herd can expand.

Lori Walsh:
In 2015, seven million chicken carcasses were burned and composted after a flu virus. So talk a little bit, if you would, about the challenges of livestock —

Art Cullen:
Five million of them were here in Storm Lake.

Lori Walsh:
Talk a little bit about the livestock population density problems that you see, particularly regarding virus spreading.

Art Cullen:
Well, there's increasing resistance to both vaccines and use of antibiotics. And so for example, vaccines are banned in the poultry industry, unless it's done on an emergency basis with USDA authorization. So there was this avian flu epidemic that spread from China, apparently through Alaska and down through South Dakota in Iowa and Southern Minnesota, as you said, killed millions upon millions of turkeys and egg-laying hens and several million here. But there were chickens outdoors and ducks outdoors that showed no signs of the virus. Only the confined birds showed signs of the virus.

And because of the lack of funding, we only spend $25 million a year on swine research. And remember, almost all these deadly pandemics arise from swine or poultry. We're not certain where the Coronavirus came from. They think it maybe came from bats, but it could've come from avian or swine sources as well. We just don't know. And that's because of a lack of research. And because we have no scientists on the ground in China, and we're not funding research at the USDA labs in Ames or the poultry lab in Georgia. But what we do know is that none of these wild birds were infected with the virus, only confined birds were. So density itself appears to be the problem, but nobody really wants to talk about that.

How do you control diseases in a herd of five million laying hens without vaccines or antibiotics? And they're confined into a small space with all sorts of manure in the air and dust. It's the system itself that lends itself to the epidemic, it would appear, because no other scientific research can explain why wild birds don't get sick and confined birds do. We also know that the easiest form of transmission from animal to human is from hog to human. The second easiest is from bird to human. And so there's a direct human health threat that nobody wants to talk about either.

Lori Walsh:
In your book, it's called "Storm Lake: Change, Resilience and Hope in America's Heartland" we really see the story of the Pulitzer work. We see a community that's changing. We see people embracing new Americans and the challenges as well that come from an influx of people from other parts of the world. There's so much happening in the book, but also I want to talk about this letter that you wrote to your son, which is in the book when he decides to be part of this family business, decides to be a newspaper man and you write this very honest letter to him that I suspect journalists will be printing out and taping up to their cubicles for years to come about what this work really is.

And yet, in South Dakota, as I'm sure across the country, we are losing our community newspapers and our community journalists at an alarming rate as the business model shifts. Talk a little bit about what if there hadn't been a “Storm Lake Times,” what if there hadn't been local reporting on this issue? And that was sort of left up to national news organizations, things on the coast, digital companies that maybe don't even know where Storm Lake is.

Art Cullen:
Yeah, well there's kind of a little story about that. What got us started on water quality was our lake itself. What God had made 26 feet deep after the white man came to Iowa and we broke the prairie and watched all that mud rush into the Lake, it went from 26 feet down to seven feet. And with the current rates of soil erosion, it'll just disappear as many Prairie pothole lakes have in South Dakota and Northern Iowa and Minnesota, they're turning into marshes, and a lot of it's due to climate change and extreme weather and soil erosion. And we started on a 20-year campaign to dredge the lake and we did, we removed 700,000 cubic yards of silt from the lake because the newspaper went on a campaign for 20 years to convince the state to dredge this lake. And in fact the dredge came from South Dakota, I think it was McCook Lake.

So if the newspaper hadn't been here, I don't think the lake would has gotten dredged in its entirety. It'd still be seven feet deep, and now there's a resort built along that lake that attracts visitors, it's got an indoor water park that attracts visitors from three states to come and enjoy Storm Lake. That water park wouldn't exist because again, the newspaper was the one that campaigned to build it using state funds and local funds, and those two projects alone, that's $60 million in state money that flowed into this community because of this newspaper that just wouldn't have been there, and the Lake might be gone. Our namesake, it might be gone in my lifetime, and I'm 62 and because I'm seeing these lakes disappear all over Northern Iowa and they're being drained away. And if this newspaper weren't here, maybe the lake might not be here.

Lori Walsh:
The book again is called "Storm Lake: Change, Resilience, and Hope in America's Heartland" and Art Cullen, winner of the 2017 Pulitzer Prize for Editorial Writing, we appreciate you coming back to South Dakota via phone this time to talk to us and hopefully we can reach out to you again in the future.

Art Cullen:
Well, great. I appreciated the chance to talk with you.

Lori Walsh is the host and senior producer of In the Moment.