7/30/01

Contacts:
John Lawrence, Economics, (515) 294-6290
Angela Rieck-Hinz, Agronomy, (515) 294-9590
Gerald Miller, Associate Dean, College of Agriculture, (515) 294-4333
Susan Thompson, Communications Service, (515) 294-0705

PROPOSED FEDERAL REGULATIONS WOULD HARM IOWA LIVESTOCK PRODUCERS

AMES, Iowa -- Proposed federal rules would put many small Iowa livestock farms out of business, accelerating the consolidation of the beef and dairy industries in particular. That's one of the points made in comments by Iowa State University delivered July 30 to the Environmental Protection Agency (EPA).

The EPA proposal would impose new rules on beef, dairy, swine and poultry operations smaller than those currently regulated by the EPA and require the containment of all feedlot runoff. Iowa has about 300 open feedlots that fall under current EPA regulations. The proposed rules could bring another 13,000 Iowa open feedlots under the EPA permit requirements.

The comments came from Richard Ross, dean of Iowa State University's College of Agriculture, and Stanley Johnson, vice provost for Iowa State University Extension.

"It is our belief that reducing the size of regulated facilities would pose a significant burden on many of the small facilities, with little environmental benefit. Many animal production systems that have not been shown to be detrimental to the environment face significant capital expenditures to meet EPA's proposed total containment requirements," Ross said.

Johnson said Iowa livestock production is based on grains grown on surrounding cropland. "These smaller, yet efficient production systems are generally family-owned and operated. Units like these have been the backbone of animal production systems in the Midwest for many decades," he said.

Ross said the proposed EPA rules would not allow producers to use sound manure management practices because no discharge from a feedlot would be allowed except in the event of a "catastrophic" storm.

"Iowa State University has been involved with environmental assistance for livestock producers for many years," Ross said. "Early studies showed the effectiveness of good manure management practices on the quality of runoff from open feedlots. Good lot-cleaning practices can reduce pollutant discharge. Some temporary impoundment proves effective for many moderate-sized facilities. Discharge from temporary holding basins can be diverted into wetlands, filter strips, buffer strips or surrounding cropland."

The EPA estimated that 1,420 hog operations, 320 dairies, 150 broiler operations and 10 beef operations would "experience financial stress" if the proposed rules were adopted. But Johnson said more stress would occur, especially in the beef industry.

"Cattle feedlots operate on a thin profit margin. We believe that far more than 10 beef operations will be significantly impacted," he said. An Iowa State study of cattle feeding returns in Iowa from 1991 to 2000 showed average estimated net profits for feeding yearling steers was $11.85 per head. The EPA's projected compliance costs for Midwest feedlots is $51.50 per head.

"If the initial investment doesn't encourage producers to exit, the inability to repair and replace their facilities will eventually leave them with little choice other than to divest from their feedlots," Johnson said.

Ross commented on the EPA statement that the additional cost of compliance would be "passed through" in the form of higher prices to producers.

"Unlike manufacturers, Iowa livestock producers sell into a commodity market with competition from other regions of the United States as well as other countries. Higher production costs will not be offset with higher selling prices. The higher costs will cause some producers to quit the business, and prices will rise temporarily due to smaller supplies. But the higher prices will encourage expansion by remaining producers and prices will return to lower levels," he said.

Ross urged the EPA to concentrate its efforts where the cost-benefit ratio is the greatest, focusing on facilities with more than 1,000 animals that are currently out of compliance.

Ross said states should be allowed to implement their own rules as long as water quality meets or exceeds federal requirements. "At least 22 states, including Iowa, have strict environmental regulations already in place. It is highly desirable that those state-specific regulations be honored, as they can effectively target local issues and local environmental threats and conditions more accurately than national regulations," he said.

A public comment period on the EPA proposals ended July 30. All comments submitted will be part of an extensive review process, before final rules are adopted in December 2002.

The full text of the Iowa State comments is available on the Web at: http://extension.agron.iastate.edu/immag/afocafo.html.

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