A report from the Global Development and Environment Institute of Tufts University argues that one of the major beneficiaries from recent changes to U.S. farm policy has been the industrialized livestock sector.

The study comes at a time when rising commodity prices, due in part to demand for biofuels, has drawn complaints from livestock producers.

"Critics argue that in the ‘food vs. fuel' fight choosing fuel will lead to rising retail food prices. The nation's largest meat companies are some of the most vocal critics, advocating for policies that would increase corn and soybean production and reduce the cost of feed," write the authors, Elanor Starmer and Timothy Wise, in a briefing paper that accompanies the report.

"In fact, these same livestock giants, not farmers, have been among the main beneficiaries of U.S. farm policies since 1996."

As the report explains, changes to farm policy in 1996, in which most remaining supply management systems were dismantled, led to a drop in commodity prices. The subsidies that have been the hallmark of farm bills ever since did not prevent family farms from seeing a decline in income.

However, the GDAE study estimates that factory livestock farms saved an estimated US$ 3.9 billion per year between 1997 and 2005, by purchasing corn and soybeans at prices below the cost of production.

But the situation is changing. The ethanol boom has sent corn and soybean prices near or above production costs, while new EPA regulations set to take effect target surface-water contamination from confined animal feeding operations (CAFOs). According to the report, with these added costs, CAFOs may have difficulty out-competing mid-sized, diversified hog producers purely on cost.

The policy brief, Feeding the Trough: Industrial Livestock Firms Saved $35 billion from Low Feed Prices, is available at: http://www.ase.tufts.edu/gdae/Pubs/rp/PB07-03FeedingAtTroughDec07.pdf

The full report, Living High on the Hog: Factory Farms, Federal Policy, and the Structural Transformation of Swine Production, is available at: http://www.ase.tufts.edu/gdae/Pubs/wp/07-04LivingHighOnHog.pdf