1996Public Service

Money Talks

The Smell of Money
Joby Warrick and Pat Stith
N&O Staff Writers
February 24, 1995

North Carolina's booming hog industry is generating jobs and tax revenue. But some residents say the cost is too high

Stanley Odom was among the Duplin County residents who spoke in Faison recently against a proposal by IBP to build a new hog-packing plant. (N&O photo by Robert Willett)

Three weeks ago, the tiny town of Faison held a referendum of sorts on whether its residents wanted a plant, with 1,500 new jobs, built in their community.

The jobs lost.

Because the industry in question was a hog-processing plant, people packed the local fire station an hour early to blast the idea. They jeered and hissed every time the county's industrial recruiter mentioned pigs or the plant.

"I want to know two things," thundered one burly speaker, thrusting a finger at Duplin County Development Director Woody Brinson. "How can we stop this thing, and how can we get you fired?"

With this story:

The town council's eventual 3-0 vote against the proposed IBP Inc. hog slaughterhouse may have little effect on whether the plant is built. What was striking about the debate is where it occurred: in the heart of Duplin County, an economic showcase for the hog industry.

With a pigs-per-person ratio of 32-to-1, Duplin has seen big payoffs from Eastern North Carolina's hog revolution in the past decade. The county's revenues from sales and property taxes have soared, and Duplin's per-capita income has risen from the lowest 25 percent statewide to about the middle.

Pork production also has spawned jobs in support businesses in Duplin and neighboring counties. People in the hog business say farm odor -- "the smell of money" -- is a small price for a big benefit.

"These hog farms are putting money in people's pockets," Brinson says.

"Duplin County is booming."

But even here, some people bitterly resent the way the industry has transformed the way the countryside looks and smells.

Some say their property has gone down in value. Others note the contrasts in the economic picture. In Duplin County, just 70 miles east of the booming Research Triangle, the population hasn't grown in 10 years. Farm jobs are dwindling despite the rise in hog production.

Derl Walker, a newly elected Duplin County commissioner, says he hears these complaints constantly. If this is prosperity, he says, some of his constituents would just as soon do without it.

"People are absolutely scared to death," Walker said, "that there are just going to be more and more and more hogs."

An unlikely savior

The recent history of Eastern North Carolina has been a succession of efforts to find alternatives to tobacco, the region's enfeebled monarch.

Since the mid-1980s, U.S. cigarette consumption has declined steadily.

Employees of Hog Slats Inc. erect a hog barn in Sampson County. The Newton Grove company employs 500 people in North Carolina. (N&O photo by Robert Willett)

Tobacco growers, who once generated more than half of the state's farm income, have seen their production quotas slashed. Many smaller growers are being forced to drop out. Industry trends say the market will shrink even more over the next decade.

In response, governments have proposed industrial parks, air cargo airports -- anything that that would diversify the employment base and provide a new economic base.

Few of the projects seemed to stick, and as a result, the eastern counties report higher unemployment than the Triangle and the state's other metropolitan areas. In some counties, more than a quarter of the residents live below the poverty level.

Enter the pig.

The state's hog producers tripled their production in 10 years and leapfrogged from No. 7 to No. 2 among swine-producing states.

The industry's annual revenues now top $1 billion, and virtually all that money is being produced in the region between the Research Triangle and the coast. No wonder state agriculture officials contend that hog production is s the long-sought savior that will lift Down East counties to new prosperity.

"North Carolinians are just beginning to realize how important the hog industry has become to the state's economy," U.S. Sen. Lauch Faircloth, a hog farmer, said recently.

The numbers are impressive. Sampson and Duplin counties are now the top hog-producing counties in the nation, with a combined inventory of more than 2 million animals.

The major hog-producing counties can point to statistics showing solid economic gains. Total property values are up; farm income is up; per-capita income has improved. In some cases, the additional tax revenue from hog farms enabled governments to postpone tax increases, according to an informal survey of county managers.

Older firms have benefited from this expansion, and several spin-off companies have been created. The Newton Grove-based company Hog Slats Inc., launched 25 years ago to manufacture concrete slat flooring for hog barns, now employs 500 people in North Carolina and has built a plant in Iowa.

Brinson sees more boom years ahead. The proposed IBP slaughterhouse, which he strongly supports, would add at least 1,500 jobs and open the door to a new phase of expansion.

"For every one who has spoke out against the plant, I've had other people calling me to say they want it," Brinson said. "If people would just try to understand the project and quit responding with incorrect information, I think they'd all support it."

"They're not local people'

Mary Beth Edge heard all the arguments about the economic benefits of pork in 1991, when Smithfield Foods Inc. proposed building a $100 million hog slaughterhouse in her hometown of Tar Heel.

Nearly four years later, with Smithfield's Carolina Foods plant in operation just a half-mile from her house, she still doesn't buy any of it.

"You always hear them use the term "state-of-the-art.' Well, let me tell you, "state-of-the-art' stinks," Edge said.

Edge lives close enough to the plant to smell the stench coming from the Carolina Foods stockyards, rendering plant and dog-food plant. But odors aside, she still doesn't see how the plant or the scores of hog farms it spawned have directly benefited her community.

The plant created jobs, she says, but relatively few of them are held by native Tar Heel residents. Plant officials say about half the workforce is now made up of immigrants from Latin America.

"I don't have anything against them, but they're not local people," Edge said. "And now they're busing in prisoners."

She's right: A local work-release program brings inmates from the county jail to jobs at the plant. Company officials say they need the jailhouse workers because of high turnover at the slaughterhouse.

The complaint about imported labor extends to other sectors of the hog industry as well. Construction is booming and hog companies build scores of new farms around the state, but at one work site, crew members came from as far away as Iowa and Mississippi.

Likewise, the grain for feed and many other supplies are bought in bulk from outside the region, bypassing local merchants. Ray Myers, an auto mechanic, watches the big hog trucks rumble past his Faison garage, but they never stop for service or fuel.

"None of this is doing me any good," Myers said.

Farm owners are clearly benefiting from the new economic order. But because of automated equipment, jobs for farm hands are relatively few.

At a Prestage farrowing farm in Sampson County, eight employees and a manager tended to 2,000 sows and their offspring. Finishing farms, where hogs are raised for slaughter, require fewer employees. In fact, some have no workers at all: the only labor required is checking the equipment daily and cleaning the barns between herds.

The job numbers for hog production are lower than for North Carolina's other agricultural giants, tobacco and poultry, which bring in about the same amount of revenue.

An recent analysis published by N.C. Agricultural Research Service said North Carolina hog production employed about 5,400 full-time workers in 1994. Another 5,900 people worked in the slaughtering and processing part of the industry, the analysis said.

Agricultural economists counted 14,700 full-time jobs in support businesses including construction, transportation and retail and wholesale sales, for a total of about 25,000 jobs indirectly or directly related to hogs.

The most recent numbers available from N.C. State and producers' associations showed poultry with 25,270 farm and processing jobs and a total of 52,000 workers including support businesses. Tobacco employed 34,000 people on farms and in warehouses and cigarette plants, and a total of 99,000 people including direct support businesses such as fertilizer and implement sales.

But jobs aren't the primary impact for people who live near hog farms.

Neil Jackson, a Duplin County auto broker, says prospective buyers for his roadfront property suddenly dried up after an 11-barn swine operation opened across the street.

Frank Hamilton, a real estate appraiser from Lillington, said hog farms "definitely have an affect on value" of neighboring properties, although the amount of loss can be hard to quantify.

"It's comparable to having a junk yard beside a house. The perception of most people is that they wouldn't want to live there," Hamilton said.

Wendell Murphy, founder and chairman of Murphy Family Farms, rejects claims that hog farms devalue nearby property. In fact, he says the opposite is true:

"Property values have gone up, and I mean seriously gone up, as a result of this industry being here.

"If somebody has property near us and they say their property is worth less and they have to leave -- tell us about it," he said. "We'll buy it."

Changing rural society

There's more at stake here than pigs and profits. Inevitable or not, the shift to contracts and corporate farming represents a profound change in the way rural societies are structured, socially and economically.

One noted economist calls the new order "post-industrial feudalism."

"The founding of our country was basically an escape from the feudal system in Europe in which the lords owned all the land and the serfs worked it for them," said Harold Breimyer, extension economist emeritus at the University of Missouri. "Now we're moving toward an industrial situation where the farmers become wage employees, and their masters are a few large corporations."

Breimyer believes the pork industry is in the early stages of this "feudalistic" era, following a trail blazed by poultry producers, retailers, restaurateurs, newspapers and others.

"Each mega farm," Breimyer explains, "replaces many smaller ones, knocking out the profit for individual producers and shifting it to the corporation." The process is clearly well under way in North Carolina, where the number of producers has declined from 23,000 to 8,000 in 10 years while hog production tripled.

Some view the changes as inevitable. Kelly Zering, an agricultural economist at N.C. State University, thinks the older mode of farming is dying out because it relies on methods that are outdated and technology that's obsolete.

"The sense is that those operations will be replaced, one way or another," Zering said. "And the people that are growing have decided that they are going to be the ones who occupy that production capacity."

Jim Graham, state agriculture commissioner, predicts that tobacco, cotton and other commodities will soon follow hogs as part of the march toward corporate ownership.

"Whether I like it or whether I don't like it, that's the way it's going," he said.

Others contend that the state simply never tried.

"By not doing anything, they were probably helping drive me out of business," said Earl Rountree, a Gates County hog farmer and former member of the state Board of Agriculture.

Rountree has cut back the size of his own hog farm by a third while huge superfarms with thousands of animals spring up around him. He says his predicament recalls the words of a country music hit by Larry Gatlin, who sings that "all the gold in California is in someone else's name."

"Over the past six years, the Agriculture Department [was] praising the growth of the hog industry as if it was a boon to the family farm," he said. "Well, what I know, and what my neighbors know, is that the gold in the bank is in someone else's name."