A Food System Designed For Shareholder Profit

Tom Philpott’s essay on how the pork industry serves as an economic negative to the Iowa communities in which factory farms are concentrated is quite interesting.

In short, since 1982, the number of hog farms in Iowa has declined rapidly while production has skyrocketed. This means more pigs concentrated into huge farms. Those megafarms not only force pigs to live terrible lives but are also massive environmental hazards in places people don’t want to work or live unless they lack the sense of smell. This has happened because the Big Four meatpackers have consolidated control of the hog markets and have forced small farmers out of business in the name of efficiency. One might think that the counties with megafarms would have benefited economically, but this isn’t true. Today, hog-centric counties in Iowa have slightly lower per capita income rates than non-hog counties, a quite different picture from 30 years ago. That’s partially because the corporations have pushed down real wages for meatpacking workers.

Our internalized rhetoric of market efficiency (which even most progressives subscribe to without thinking) means that we think that this consolidation (even with its unfortunate side effects) is obviously worth it because it means lower food prices. But Philpott shows that corporations have little incentive to pass on lower prices to consumers while they have tons of incentive to pass on costs when food prices go up. So essentially, consolidation in the Iowa hog industry has led to more money in the pockets of corporate shareholders at the cost of everyone else involved. Just like the rest of the American economy since the 1970s.