Bad Eggs and the Future of Farming

Wright County, in north central Iowa, is on the map these days for reasons it would rather forget. It's the home of the DeCoster family and their Wright County Egg, the lead company in a massive recall of 550 million eggs linked to a nationwide salmonella outbreak.

There's not much good to be said about the DeCoster operation, which has been in trouble with environmental officials and the law in Iowa and other states and was once branded a "habitual" violator by the state of Iowa.

But both Wright County and the DeCosters are bellwethers of global agriculture and its impact on the Midwest. There's more to this story than just one big rogue outfit.

Reports from Wright County itself indicate that the DeCosters aren't all bad, that they get high marks from locals for their substantial philanthropy to the local library or their support for local festivals. When I first read this, I thought that Wright County must be one of those impoverished Iowa rural counties which is so grateful for any business or jobs that it's willing to harbor and excuse a serial polluter to get them.

There's more to it than that. Actually, Wright County is one of the wealthiest counties in Iowa. Its per capita income of $44,372 (2008 figures) is the third highest in the state. Its unemployment rate is usually around 4 percent and is only 7 percent now, well below the national average. Two of its hospitals are expanding. So are its schools.

On the other hand, it's one of the majority of Iowa counties that is shrinking -- 12,700 people, down from 19,000 in 1960. The long-term decline would be even worse if it wasn't for an influx of immigrants, mostly Hispanic, that make up nearly 10 percent of its population.

I talked with Denny Bowman, who runs the economic development department in Wright County. From what he said and the other stories since the egg scandal broke, it's clear that Wright County is an epicenter of global agriculture, which is to say big farming.

The DeCoster operation was fairly typical -- no less than 5.7 million hens in various egg locations around the county, plus various hog confinement operations that the family owns and leases. Some of the eggs are packaged, mostly by immigrants, on the premises, although not since the egg recall began. Others go to "breaker plants" in the county: these are plants where eggs are cracked into huge vats, with the liquid egg going to McDonald's and other restaurants. Your next Egg McMuffin could come from Wright County.

The DeCosters also are the largest landowners in the county. Much of their grain, especially corn, goes to the DeCosters' milling facility, which processes it into chicken feed.

Obviously, the DeCosters are getting rich off this mammoth operation. But apart from its egregious law-breaking, it sounds more typical than not of what's going on in the rest of Wright county and, indeed, in much of that area of Iowa.

Farms are consolidating and getting bigger: a 3,000-acre spread is "not uncommon," Bowman told me. Young farmers are farming, and old farmers are retiring and living very well in town off the rents from their land. The land prices themselves are skyhigh, one reason for the high per capita incomes.

This is big ag, global-style. Big spreads. Big income. Big capitalization in equipment. Big yields. Big global markets.

For better or for worse, it's where most American farming is these days. City-dwellers who rhapsodize about locally-grown food and niche farming are simply missing the point.

As the DeCoster case makes clear, bigness -- in farming as in any other industry -- can be abused. But it's what's happening out in the countryside, far away from the farmers' markets.

But these big farms, being highly mechanized, don't employ many people: even the vast DeCoster operations support only 300 jobs altogether. Most people work off the farm. Bowman says that only one in four Wright County jobs is ag-related, but the ag sector remains big. There's a profitable ethanol plant. Some farmers earn rents from wind farms on their property: the county holds 59 windmills. AGP processes soybean meal and oil. Monstanto has a soybean seed facility. Clarion Packaging employs 100 persons making egg cartons, which go to DeCoster and also to 27 other states. Hagie Corp. makes agricultural sprayers.

Again, we're not talking a traditional mom-and-pop farm economy here. But all this global activity has given the county a stability unavailable to many Midwestern areas. About 60 residents commute to jobs in a big Electrolux factory in Webster City, across the county line to the south: those jobs will be lost when that factory closes early next year but, with luck, can be absorbed.

All the stories out of Wright County comment that the place reeks. Animals smell, of course, but a concentration of a million chickens or 5,000 hogs -- and the vast manure lagoons they produce -- is something special. The same is true of meatpacking towns, where the big plants -- owned by Tyson, Cargill or Sara Lee -- are the biggest employers and taxpayers for miles around, but simply stink.

This may be the price of success in communities dependent on global agriculture.

Naturally, there's no excuse for the DeCosters, especially the patriarch, Jack, who simply sounds like an evil old man, with a list of violations over the years that goes beyond environmental spoilage to include outright abuse of employees, animal cruelty and hiring of undocumented immigrants. According to recent reports, filth at the DeCoster eggs operations flouts even the minimal regulations that exist now.

But most big Midwestern farmers are not gratuitous law-breakers. Most own farms that have been in their families for years and have an abiding love of nature and the countryside.

Competitive pressures, from outlaws like the DeCosters and from the agribusiness corporations that dominate the industry, invite corner-cutting. But big farming is here to stay and, indeed, is vital if the world is to be fed. It is in the interest of these farmers to swallow their distaste for regulations and accept that they, like Wall Street and other big and powerful businesses, will survive only if they are seen to be playing by the rules.

Otherwise, they will all be tarred with the DeCoster brush. The Wright Counties of the Midwest are thriving on global agriculture, and have the most to lose if it stumbles.

For more information on agriculture in the Midwest, visit the In the News section of the Global Midwest Web site.

Comments

[Chris Barnett]

Richard, this post and the one immediately before it (as well as your visit to Indianapolis today) bring to mind Kurt Vonnegut's "Player Piano": mechanization brings efficiency, but it exacts a human toll on those caught up in its "creative destruction".

Increasing automation of factory and ag work brings huge capital costs, which in turn require huge scale. Ag is a more-recent guest at the "scale-up" party, but make no mistake, it is now a world-scale business full of huge enterprises like Cargill, Andersons, Tyson, etc. (The small-town John Deere dealer probably isn't getting a piece of that action, either.)

And so it goes.

Being relatively new at the large-scale game, some ag oldtimers probably still have the independent entrepreneur's mentality instead of the big-corp one. Big manufacturing corporations long ago made peace with the existence of labor and environmental regs, and BP notwithstanding, few are run as carelessly as some ag operations are today.

The "young farmers" (as you've pointed out previously) are sitting in classrooms in the Midwest's traditional Ag schools, then getting MBAs and coming home to roll up the old family farms in their county. That bodes well: professional managers will run their big ag corporations like big corporations. Or so one might hope.

But this does leave profitable niches that are too labor-intensive for the big operations. Big-anything is about unit volume, overhead absorbtion and standardization. Just as there are small job-shops in manufacturing that specialize in short runs and custom fabrication (and earn a tidy profit doing so), and there are small wineries alongside Gallo and the other huge operations, there will be small niche farms to grow arugula and other produce close to well-to-do urbanites.