Concentrated Livestock Operations On The Rise

Sep 26, 2018

In The Moment ... September 26. 2018 Show 430 Hour 2

There's a growing new market for some of the state's corn crop – and it's right here in South Dakota.  The U.S. Agriculture Department expects a record corn crop this year.

About half goes to make ethanol , and another thirty percent gets exported.

SDPB's Lee Strubinger reported the last 20 percent is going to feed animal in a growing number of concentrated livestock operations.

South Dakota corn farmers have a transportation problem. The state’s producers and grain elevators rely on the Burlington Northern Santa Fe rail to ship grain to the Pacific northwest.

And Republican Speaker of the House Mark Mickelson says geography forces South Dakota farmers to take lower prices .

“We’re remote, we’re a long way away from some of those end markets, and it’s a long haul rail road to get it to the Pacific northwest, Portland or Seattle, where it will go on a boat and typically go to Asia,” Mickelson says.

Mickelson says that’s where concentrated animal feedlot operations, or hog confinements, come in. They offer an alternative use for South Dakota corn – as feed -- and they give producers a diversified stream of income for the family farm .

“Value added agriculture with an animal feeding operation is an alternative that banks will finance, young people will go work, earn a bunch of equity, get started, turn around in 10 or 15 or 20 years and have built up a pretty nice operation for themselves and their kids.       

“Bring people back to South Dakota, even?”

“Yeah, bring them back or keep them. If we’re not an ag state, what are we?”

Mickelson says feeding that corn to livestock locally, creates more jobs than shipping it to Seattle for the export market.

Mickelson, who is not seeking re-election to the House this November, started a business with two other partners called A1 Development Solutions. The firm specializes in the siting, permitting and development of livestock and agricultural related facilities of all sizes.

One of his partners is Paul Kostboth. He is the former director of the County Site Analysis Program. That state program helps counties determine where to locate potential feedlot operations while considering setbacks for aquifers and other rules and regulations.

Kostboth says they have had constructive conversations with counties.

“It was in no way us trying to sway them to go one way or another, it was just a kind of way for us to inform that this is how it looks, and if you are looking at modern practices here’s going to be what your county would look like in terms of folks looking to do these things," Kostboth says. "Whether or not you want those, it’s your decision, that’s what we told the counties, but here’s how you look compared to the rest.”

Kostboth says some county officials were surprised to find out their regulations made it almost impossible for producers to set up a concentrated feedlot operation.

Both Kostboth and Mickelson say such livestock operations are a good resource for the state’s abundant supply of corn. And the pork industry has responded . Over the last 6 years, the state has seen a 16 percent increase in hog production.

Glen Muller is the executive director of the South Dakota Pork Producers Council. He says there’ve been a number of factors that led to that growth. He says hog producers across the state  formed a long range strategic plan to promote “responsible growth of the industry.”

Muller points to the state’s grain supply, and Governor Dennis Daugaard’s support of the industry.

“You can buy corn and soybeans for a whole lot less in South Dakota than you can in Iowa or some of our surrounding states because of the development of their livestock industry," Muller says. "There’s a demand for the grains there, so we have a wider basis, which is beneficial for the pork producers because they can buy their inputs at a lower price in South Dakota than they can in some of our surrounding states.”

But an official from one of those surrounding states cautions South Dakota not to move too fast expanding its concentrated feedlot industry.

The former Republican, now an independent lawmaker David Johnson represents 5 counties in northwest Iowa. Johnson has served in the Iowa state legislature for 20 years, including stints as chair of the senate ag committee.

Johnson says other states should learn from Iowa’s mistakes.

“We have, as a result of what happened in Iowa, our waters, our lakes, our rivers, our streams have a national reputation of being absolutely polluted," Johnson says.

Johnson says agricultural fertilizers have contributed to the contamination, but managing the amount of manure collected in lagoons outside of confinement sheds is also a challenge – even when it’s spread on fields as an alternative to chemical fertilizer.

Johnson says he’s working to convince Iowa leaders to update animal agriculture regulations. He says creating strict setbacks requiring a certain distance from nearby residents and aquifers is key... as well as comprehensive regulations on how to manage the manure such operations create.

But one Sioux Falls lawyer says South Dakota is doing just the opposite.

Mitch Peterson has tried about 30 cases in the state, representing people opposed to plans for a concentrated animal feedlot operations nearby.

“What I’ve consistently seen is our state government decreasing those protections for the people who live here," Peterson says. "To make sure that processes are followed and that they have a fair day in court if it gets to that point.”

Peterson points to recent changes that he says make it harder for someone to appeal a concentrated feedlot permit. He says a 2015 and 2016 law allows counties to approve special use permits for concentrated feedlots with a simple majority vote. Peterson says that narrows what’s considered when someone appeals a permit ruling.

“Whether it’s the board of county commissioners or board of adjustment, whatever the entity is, if it’s a conditional use permit it has a limited scope of review,” Peterson says.

The 2015 and 2016 bills were sponsored by Representative Mickelson.

He says the county permitting process has had unintended consequences. He says South Dakota is 30 years behind neighboring states when it comes livestock development because the state is reluctant to change.

“And I think that serves us well at times. Some of our neighboring states—they have a more streamlined permitting process where it’s more science based," Mickelson says. "You look for your setbacks, you look for your aquifers, you look at those very factual based things and then you make a decision.”

State records show there are currently 440 concentrated animal feedlot operations in South Dakota. The facilities are located in roughly three fourths of the state’s counties. Those operations are handling more than 10 million animals, with most of them east of the Missouri River. And with the state producing record corn harvests, more and more of that crop may feed the state’s growing livestock industry.

CORRECTION: Originally reported that there are 434 permitted CAFOs in South Dakota. As of June 20, 2018, there are 440.