Will Prestage packing plant fuel a hog confinement boom?

CLARION, Ia. — Prestage Farms' $240 million pork processing plant will be about 60 miles from Mary Kaye Johnson's Clear Lake home, but she's concerned about the facility's impact on one of the state's premiere recreation spots.

More to the point: Johnson is concerned about the plant — as well as a $264 million slaughter facility coming online in Sioux City next year — bringing dozens of new pig confinements to northern Iowa.

"We live on the commerce of tourism, but people won't come to Clear Lake if it stinks," said Johnson, an Iowa Citizens for Community Improvement member.

About 30 members of the Des Moines-based group asked the Iowa Environmental Protection Commission Tuesday to place a moratorium on allowing new or expanded hog confinements in the state. It's an issue that the Iowa Legislature would need to decide, said the commission, meeting in Clarion.

Iowa CCI members pointed to state data through Oct. 25 that show applications for new or expanded animal feeding operations in north-central Iowa are about 36 percent 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 — cattle, dairy cows and poultry, in addition to hogs — for the 15-county north-central Iowa region.

Quarterly data through September show hog production applications for north-central Iowa are 5 percent higher than the third quarter of 2015.

Statewide, hog producer requests to expand hog production through September lags last year by 3 percent, Iowa DNR's data show.

Iowa approves $11.5 million to Prestage for pork plant

Prestage received state and local incentives this summer to build its new plant in Wright County, five miles south of Eagle Grove. The North Carolina company said it will create about 900 jobs for nearby communities that also include Clarion, Webster City and Fort Dodge.

The facility, processing about 10,000 hogs a day, is expected to come online in 2018.

Despite low corn and soybean prices, the pork industry is fighting losses, making it a difficult time to expand, said Gregg Hora, a Fort Dodge area pork producer.

"There's a lot of red ink," said Hora, an Iowa Pork Producers Association board member. "We're not breaking even."

One reason for pork's depressed prices this fall is a shortage of packing capacity, said Dermot Hayes, an Iowa State University agricultural economist.

Fall tends to bring a large number of animals to meatpacking plants, which are setting new records for processing this month.

The lack of capacity is shifting profits to meatpackers from producers, Hayes said. The new Iowa plants will help bring that back in balance, he said.

“It will help producers capture more of the value,” Hayes said. “These two plants will help fix things, but it will take a while.”

The Sioux City plant, owned by Seaboard Foods and Triumph Foods, is expected to employ 1,100.

Hayes said the new Iowa plants should help cut costs for producers. "It will improve the profitability of producers located near the plants, so you would expect them to look to expand.

"But I don't know how many sites would be available for expansion," he said. "We've used up a lot of the best sites already."

Iowa is the nation's largest pork producer, with about 50 million pigs raised annually. About 6.5 million pigs are raised within 250 miles of the Prestage plant.

Hora said the plant, which expects to take 40 percent of the animals it processes from independent producers, should also help improve prices.

"Producers have more choice" about where they sell their animals, Hora said. Tyson and Cargill operate some of the largest meatpacking plants in Iowa.

Prestage will provide 60 percent of the hogs from its operations in Iowa and elsewhere.

Summer Lanier, a Prestage Farms spokeswoman, said pork production grows about 1-2 percent annually, "independent of the number of new plants opening or old ones closing."

The company plans to open its plant in Iowa because the state lacks packing capacity.

Hora said Iowa raised about 30 percent of the nation's pork but only has 25 percent of the meatpacking capacity.

Johnson and other CCI members said Iowa needs tougher rules, regulations and inspections of hog confinements.

The group blames the facilities for many of the state's air and water quality problems, saying manure from the facilities used to fertilize Iowa corn fields pollutes the state's rivers and lakes.

"This is all we're going to get," said Johnson of Clear Lake. "We won't have usable drinking water or air to breathe."