[Editor's Note: This is adapted from Christopher Leonard's acclaimed new book, "The Meat Market: The Secret Takeover Of America's Food Business" (Simon & Schuster).]
Factory hog farms are one of the most ethically fraught links in America's meat supply chain. Hogs are sentient animals with the intelligence of human toddlers, and up until a few decades ago they were largely raised in outdoor pens where mother pigs could suckle their piglets much as they did for centuries. But today, hogs are raised shoulder to shoulder in warehouse-like barns, standing on slatted floors elevated above manure pits. Mother pigs are confined in narrow cages that restrict them from moving left to right or even turning in a circle.
Modern factory hog farming is often presented as the inevitable result of scientific progress. In reality, it is the result of an audacious business plan that was hatched back in the 1970s. At that time, a handful of corporate meat producers decided to take over America's profitable hog industry. The hog business was a remarkably lucrative target back then, with about 736,000 hog farms in the United States collectively earning about $7.7 billion a year in pure profit. In Iowa, hogs were known as the "mortgage lifter" because farmers could pay off their debt with earnings from the hog pen. Industrial meat producers like Tyson Foods saw the profits being made, and moved in to grab them. The execution of this business plan is one of the least known corporate takeovers in U.S. business history, and it revolutionized the pork business. To understand why pigs are raised in factory barns today, it is important to understand this corporate takeover, and the business plan behind modern pork production. And there is no better way to do that than by going inside Tyson Foods hog business.
In the early days, Tyson's hog farms were only a sideshow compared to the company's chicken business. Tyson Foods had pioneered a method of meat production that used "vertical integration" to achieve remarkably efficient production. As a vertically integrated firm, Tyson Foods owned all the means of production that were once owned by independent businesses on Main Street. Tyson owned the chicken hatchery, the feed mill, the slaughterhouse and the trucking lines that connected it all. Tyson signed contracts with farmers to raise its birds rather than buying the birds on an open market. As Tyson bought out its competitors over the decades, contract chicken farmers had fewer choices for whom to do business with. Tyson took advantage of this and used its contract terms to squeeze farmers to the point of bankruptcy. Hog farming was different. It wasn't integrated. Hog farmers didn't operate under contract, and the animals were sold on transparent markets.
In 1973, Tyson Foods ran an experimental hog farm in Northwest Arkansas. The farm contained a group of low-slung sheds that sat secluded on a stretch of green pasture. The barns were a novel invention, a hybrid between a pig sty and a factory chicken farm. In short, they were Tyson's effort to figure out how to raise hogs in the same way the company had been raising birds. There was ample reason to doubt the gamble would work. Chickens and pigs were leagues apart biologically. Chickens were docile birds that could be packed next to one another for the six short weeks they were scheduled to be alive. Pigs, on the other hand, were not only bigger than most people, but they were far more biologically similar to humans than to birds. It seemed unlikely that hogs would be able to adapt to the production model of a chicken house, crammed into a barn. In many ways, it was the biological equivalent of putting hundreds of large people in a barn with no toilets and running water, and very little heating or cooling.
Piglets posed a particular problem. Baby pigs must suckle at their mother's teats and it takes weeks for a wobbly piglet to be strong enough to be shipped anywhere. And like other mammals, pigs evolved over the eons to protect their young. The animals have strong, innately bred social instincts that made it all but impossible to raise them in close quarters. Packing hundreds of female sows into a barn means some of them are going to kill the others. Crowded hog barns could easily turn into a big, messy carnival of violence. And that's not good for business. Stressed out animals don't yield good meat.
One of the most important innovations that led to the factory hog farm dealt with the problem of suckling pigs. Tyson Foods and other hog researchers broke hog production into two, distinct stages. In stage one, female pigs gave birth to piglets in special barns. In stage two, those piglets were fattened to slaughter weight.
During stage one, pregnant sows were confined in special pens, called "farrowing crates." These crates are narrow metal cages, no wider than the sow's body, which kept the mother pig immobilized, unable to turn right or left. On each side of the sow, there are smaller cages where the piglets resided and where they could suckle from their mother through metal slats. By keeping the mother pigs penned, there was no chance that the piglets might be crushed in the melee of a crowded barn. Workers walked up and down the gangway between rows of crated sows and easily plucked squealing piglets from their pens when they were old enough to be shipped away.
At this point, the piglets entered phase two of the new hog industry. They were shipped to the "feeder farms," where their life was comprised of nothing but eating and getting fat. The feeder barns were also modeled on chicken-houses, with slatted floors and subdivided pens. They were equipped with big feed bins, automatic water lines and fan systems to keep the animals cool. Critically, the feeder barns share another attribute with Tyson's chicken farms: The farmers raise the animals under contract for the company rather than selling the pigs on an open market.
By the late 1980s, Tyson had built its first small network of hog farms. The company's efforts were centered in the town of Holdenville, Okla., which looks like many of the towns where Tyson now dominates the rural economy. Downtown Holdenville is like a ragged grid of inner-city ghetto, inexplicably dropped down into the middle of desolate prairie. There is nothing around Holdenville but green hills covered in scrub grasses that stretch out to a lonely horizon. The businesses downtown reflect an economy that long ago quit growing and now exists by cannibalizing itself. An inordinate number of pawn shops dot the strip downtown, while several check cashing and pay-day loan shops advertise the opportunity to borrow money against the meager paychecks most residents earn. The unemployment rate is among the highest in Oklahoma, and those citizens lucky enough to have a job earn just a fraction of the average pay of their relatives who left for big-city jobs.
In the hills around Holdenville, Tyson still controls a network of hog farms where its breeding pigs live in narrow farrowing cages, or so-called "crates." Farmers raise these pigs under contract with Tyson, and the piglets from these breeding farms are shipped north to be raised on feeder farms in states like Iowa.
Late last year, undercover video was released showing appalling animal abuse on Tyson-contracted farm near Holdenville. Farm workers were kicking the animals and smacking them with heavy objects, violence that is unnecessary to get the animals to cooperate when they must be moved from pen to pen. Tyson Foods immediately tried to distance itself from the farm, blaming the local producer who raised the animals under contract for the firm. But it is inaccurate to say that Tyson has no influence over the hog farms around Holdenville. Farmers who raise pigs under contract feel the hand of the company over their head at all time. The pressure to produce as many piglets as possible is relentless, and the pay can be so low that farmers leave the business altogether.
One of the earliest farmers to raise hogs for Tyson Foods near Holdenville was Bob Allen. In the early 1990s, Allen saw an advertisement in the local newspaper: Tyson Foods was looking for hog farmers. Allen was intrigued. At the time, he leased some rocky pastureland around Holdenville where he raised about 100 cattle. Allen went to a crowded meeting in downtown Holdenville to hear what Tyson Foods had to offer him. He listened to the Tyson man's pitch with a skeptical ear. Allen wasn't looking to get rich quick, or even make an easy living. He was pleased with what he heard from Tyson. The company said it would line up loans for anyone interested in building a hog house. It would offer farmers a series of three consecutive three-year contracts, which would last almost the entire life of the 10-year-loan they would take on to build the farm. The work would be constant, but Allen was used to that. With Tyson promising to provide a farm income for 10 years, Allen felt more comfortable borrowing the $500,0000 it would take to build two farrowing farms.
Allen then discovered a reality that Tyson's chicken farmers have known for years. In a contract relationship, the economic terms of farming are not set by the free market: They are set by the company. Allen quickly learned who was in charge. Tyson sent field technicians to his farm, and initially Allen thought their job was to give him advice. But he soon came to see that the field techs arrived to dispense orders. The field technicians strode around his operation like they owned the place. Because, in a way, they did. Allen knew every day that Tyson could refuse to deliver him sows, and he'd be on his own to meet his debt payments.
Allen said that Tyson steadily shifted the production goals he needed to meet, asking him to produce more and more piglets per barn. Then the company backed out of its promise to provide him multiple three-year contracts, Allen recalled. Tyson Foods disputed Allen's contention that the company moved him to a month-to-month contract, but Tyson Foods would not allow the former manager of the hog complex in Holdenville to be interviewed about Allen's claims. Allen ended up selling his farm.
During the 1980s and 1990s, Tyson wasn't the only company to enter the contract hog farming business. It was joined by firms like Smithfield Foods, which eventually overtook Tyson to become the nation's biggest vertically integrated pork producer. Tyson almost got out of the hog business altogether in the 1990s, but it once again became a major player in the market when it bought the beef and pork producer IBP in 2001.
As companies like Tyson and Smithfield grew, the number of independent hog farmers plummeted. Each new contract hog farm that entered the business created a surprising shift within the hog market. Each one percent gain in the proportion of pigs sold under contract created a 0.88 percent drop in the price of hogs that were sold on the cash market. In other words, the rise of contract farming came at the direct expense of independent hog farmers who sold their pigs on a cash market. Contract farmers suffocated the open market.
Within two short decades America's independent hog industry was wiped out and replaced with a vertically integrated, corporate-controlled model. Ninety percent of all hog farms disappeared.
Today, the nation's hog industry is defined by centralized control. The top four pork processors make about 65 percent of all U.S. pork. Smithfield Foods alone makes about 30 percent (the company is now owned by a Chinese firm, which acquired Smithfield last year). For consumers, this has meant less choice at the grocery store. In rural America, it means that farmers are earning less of every dollar that is spent on pork. For companies like Tyson and Smithfield, the consolidated industry means record profits. Tyson Foods earned a record $778 million in profit last year alone.
When it comes to pigs being raised on factory farms, their treatment will be determined in large part by the policies of four large companies. These firms are being pressured to change their practices by animal welfare groups like The Humane Society, which has focused particularly on the use of farrowing crates. Early this year, Tyson sent a letter to the hog farmers that supplied it, saying the company wanted future hog barns to "allow sows of all sizes to stand, turn around, lie down and stretch their legs," according to a copy of the letter quoted by the Humane Society. Smithfield has also stated that it plans to phase out the crates going forward.
In the meantime, big agribusiness firms are pushing for state laws that would make it illegal to record the kind of undercover videos like the one showing abuse on the Tyson farm in Oklahoma. The thinking seems to be that the less consumers know, the better.