Smithfield is no longer able to disfigure watersheds quite so obviously as in the past: it can no longer expand and flatten small pig farms quite so easily. Several state legislatures have passed laws prohibiting or limiting the ownership of small farms by pork processors. In some places, new slaughterhouses are required to meet expensive waste-disposal requirements: many are forbidden from using the waste-lagoon system. North Carolina, where pigs now outnumber people, has passed a moratorium on new hog operations and ordered Smithfield to fund research into alternative waste-disposal technologies. South Carolina, having taken a good look at its neighbor's coastal plain, has pronounced the company unwelcome in the state. The federal government and several states have challenged some of Smithfield's recent acquisition deals and, in a few instances, have forced the company to agree to modify its waste-lagoon systems.
These initiatives, of course, come comically late. Industrial hog operations control at least seventy-five percent of the market. Smithfield's market dominance is hardly at risk: Twenty-six percent of the pork processed in this country is Smithfield pork. The company's expansion does not seem to be slowing down: Over the past two years, Smithfield's annual sales grew by $1.5 billion. In September, the company announced that it is merging with Premium Standard Farms, the nation's second-largest hog farmer and sixthlargest pork processor. If the deal goes through, Smithfield will own more pigs than the next eight largest pork producers in the nation combined. The company's market leverage and political clout will allow it to produce ever greater quantities of hog waste.
Smithfield points to the improvements it has made to its waste-disposal systems in recent years. In 2003. Smithfield announced that it was investing $20 million in a program to turn its pig shit in Utah into alternative fuel. It now produces approximately 2.500 gallons a day of biomethanol and has begun building a facility in Texas to produce clean-burning biodiesel fuel.
"We're paying a lot of attention to energy right now," says Treacy, the Smithfield vice president. "We've come such a long way in the last five years." The company, he adds, has undergone a "complete cultural shift on environmental matters."
But cultural shifts, no matter how genuine, cannot counter the unalterable physical reality of Smithfield Foods itself. "All of a sudden we have this 800-pound gorilla in the pork industry," Successful Farming magazine warned – six years ago. There simply is no regulatory solution to the millions of tons of searingly fetid, toxic effluvium that industrial hog farms discharge and aerosolize on a daily basis. Smithfield alone has sixteen operations in twelve states. Fixing the problem completely would bankrupt the company. According to Dr. Michael Mallin. a marine scientist at the University of North Carolina at Wilmington who has researched the effects of corporate farming on water quality, the volumes of concentrated pig waste produced by industrial hog farms are plainly not containable in small areas. The land, he says, "just can't absorb everything that comes out of the barns." From the moment that Smithfield attained its current size, its waste-disposal problem became conventionally insoluble.
Joe Luter, like his pig shit, has an innate aversion to being contained in anyway. Ever since American regulators and lawmakers started forcing Smithfield to spend more money on waste treatment and attempting to limit the company's expansion, Luter has been looking to do business elsewhere. In recent years, his gaze has fallen on the lucrative and unregulated markets of Poland.
In 1999, Luter bought a state-owned company called Animex, one of Poland's biggest hog processors. Then he began doing business through a Polish subsidiary called Prima Farms, acquiring huge moribund Communist-era hog farms and converting them into concentrated feeding operations. Pork prices in Poland were low, so Smithfield's sweeping expansion didn't make strict economic sense, except that it had the virtue of pushing small hog farmers toward bankruptcy. By 2003, Animex was operating six subsidiary companies and seven processing plants, selling nine brands of meat and taking in $338 million annually.
The usual violations occurred. Near one of Smithfield's largest plants, in Byszkowo, an enormous pool of frozen pig shit, pumped into a lagoon in winter, melted and ran into two nearby lakes. The lake water turned brown; residents in local villages got skin rashes and eye infections; the stench made it impossible to eat. A recent report to the Helsinki Commission found that Smithfield's pollution throughout Poland was damaging the country's ecosystems. Overapplication was endemic. Farmers without permits were piping liquid pig shit directly into watersheds that fed into the Baltic Sea.
When Joseph Luter entered Poland, he announced that he planned to turn the country into the "Iowa of Europe." Iowa has always been America's biggest hog producer and remains the nation's chief icon of hog farming. Having subdued Poland, Luter announced this summer that all of Eastern Europe – "particularly Romania" – should become the "Iowa of Europe." Seventy-five percent of Romania's hogs currently come from household farms. Over the next five years. Smithfield plans to spend $800 million in Romania to change that.
This story is from the December 14th, 2006 issue of Rolling Stone.
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