Scaling Up: Production contracts more common in North Carolina than Midwestern pork states
Researchers think long-tenured farmers in the Midwest are less likely to make deals with Big Ag companies.
North Carolina, Iowa and Minnesota are all important pork-producing states, but the economic models for each state’s pork industry differ, a U.S. Department of Agriculture study found.
All together, the three states house nearly 60% of the hogs in the U.S.
Hog operations in North Carolina also tend to be less diverse businesses, while hog farms in the Midwest are more likely to operate crop fields in addition to the livestock barns, according to the report.
Production contracts are “nearly universal” in North Carolina, the study states. And while contract use has increased in Iowa and Minnesota, the Midwestern states are well below North Carolina’s rate of production contract usage.
The study theorizes that since the pork industry in North Carolina rapidly expanded in the 1990s, new hog farmers may have been more open to contracting with large companies. Longtime hog farmers in the Midwest, however, may be more focused on staying independent, according to economist Carolyn Dimitri, associate professor of nutrition and food studies at New York University and one of the authors of the USDA report.
“In North Carolina, it kind of became a hog state all at once,” Dimitri said. “So people haven't been growing, raising hogs there for 200 years like they have in these other states.”
The expansion of large hog operations in the two regions are connected. While Iowa has long been a large producer of pork, North Carolina’s hog industry grew rapidly from the mid-1980s until the mid-1990s. When a 1997 moratorium curtailed expansion of concentrated animal feeding operations, or CAFOs, in North Carolina, the number of large hog operations in Iowa and Minnesota increased.