Saundra Traywick by the donkey pen on July 11 (Ben Felder, Investigate Midwest).

The cool morning spring breeze hit Saundra Traywick “like a punch to the face.”

Walking through her wooded 38-acre donkey farm in central Oklahoma, Traywick suddenly found it hard to breathe as the air smelled “toxic” and “like death.”

Less than a mile away, a truck was spreading a chunky dark fertilizer on a hay farm, a familiar ritual in this rural community just beyond Oklahoma City’s northeast suburbs.

But this fertilizer was putting off a smell that Traywick had never encountered. She soon discovered the fertilizer was made from processed sewage.

Converting sewage to fertilizer saves cities money on landfill costs, is a cheaper nutrient-rich fertilizer for farmers, and has become a billion-dollar industry for a handful of companies. However, biosolid fertilizer has been shown to contain chemicals that can harm the environment and human health.

“Essentially anything that goes down the drain ends up on these fields,” said Traywick, who, months after first learning about biosolid fertilizer, urged the nearby town of Luther to ban it, which city leaders did in 2020.

Scientific studies are increasingly warning about the PFAS chemicals found in biosolid fertilizers. PFAS — short for per- and polyfluoroalkyl substances, also called “forever chemicals” — can be found in many water- and heat-resistant products, personal hygiene materials, medication and industrial waste.

But while some states have recently restricted or banned biosolid fertilizer entirely after finding it contaminated farmland and groundwater, Oklahoma lawmakers and environmental officials attempted to take steps this year to protect cities and corporations from liability if new health problems are found.

The EPA estimates that as much as 3.5 million dry metric tons of treated sewage waste is spread as fertilizer across the country yearly — enough to cover the entire state of Missouri.

Oklahoma has one of the most extensive biosolid fertilizer programs in the nation, as more than 80% of the state’s wastewater sludge ends up on crop fields, according to Investigate Midwest’s analysis of state records.

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Synagro, a Goldman Sachs-owned company that spreads most of the biosolid fertilizer in Oklahoma and across the country, has lobbied against new regulations over “forever chemicals” in its fertilizer, even as it faces lawsuits from farmers claiming its product has devalued their land and created numerous health problems. “Biosolids are a nutrient-rich end-product of the wastewater solids treatment process that have been treated to ensure safe use in agricultural land application,” the company said in a statement.

The issue has also taken center stage in an Oklahoma state House race, as a longtime lawmaker who uses biosolid fertilizer on his land risks losing to a challenger who wants to end the practice.

“I’d say it’s one of the main issues,” Traywick said about the upcoming state House election.

While scientists have discovered PFAS chemicals already exist in the blood of nearly every living person and animal on the planet, recent studies have raised concerns about increased PFAS exposure through its presence in biosolid fertilizers, which impacts the air, water and food.

• Air: UCLA researchers found that microplastics in biosolid fertilizer are highly suitable to wind, “thereby increasing … inhalation health risks,” such as lung tissue damage, according to a study published in January.
• Water: Groundwater near biosolid fertilizer-applied fields often have elevated rates of PFAS, sometimes at higher rates than what is deemed suitable for human consumption, according to a 2024 study published by the American Chemical Society.
• Food: In 2022, beef from a Michigan farm was contaminated with high levels of PFAS that officials said came from biosolid fertilizers.

“The scientific community has put a lot more focus (recently) on PFAS and how dangerous they can be even at low levels,” said Jared Hayes, a policy analyst with the Environmental Working Group who specializes in “forever chemicals.”

In response to growing health concerns, the Environmental Protection Agency recently announced it will require municipal water systems to remove nearly all PFAS substances. These regulations, some predict, could cost as much as $3 billion in new equipment nationwide.

However, the new rules don’t change the current standards of PFAS exposure in fertilizer.

“There are a lot of unknowns of what we are going to do with the biosolids,” Hayes said.

Biosolid fertilizer rankled a town and a state House election

Driving down a rolling two-lane road in central Oklahoma, Jenni White lifted her right hand off the steering wheel of her silver Honda CRV to point to another field that uses biosolid fertilizer.

“That field is one of the worst; I mean, I was hacking up a lung when it was spread, I could not catch my breath, it’s so strong,” said White, pointing through her bug-splattered windshield.

As she passed the next field, White recalled that the farmer had recently stopped using biosolid fertilizer when his neighbors complained. “I think he just thought it wasn’t worth the hassle,” White said.

White was mayor of Luther in 2020 when Traywick, the area donkey farmer, approached the town with concerns over biosolid fertilizers. White was already aware of its use but believed Traywick’s activism warranted discussion among Luther’s five elected trustees.

A ban in Luther wouldn’t impact many farmers, as the town is less than five square miles and most of the area farms are outside its boundaries. But the discussion drew a visit from two officials from Synagro.

One of the officials, identified as Layne Baroldi by the Luther Register, gave a presentation on the benefits of biosolid fertilizer.

Baroldi said California had some of the strictest environmental regulations in the country — you “can’t cough without getting cited,” so the fact that biosolid fertilizer is allowed there should be reassuring to folks in Oklahoma. “Putting it on the ground was (the) best practice,” Baroldi told the trustees.

But the presentation wasn’t enough, as the trustees voted to enact the ban.

(Investigate Midwest spoke to five Oklahoma farmers who use biosolid fertilizers but none would speak on the record due to local opposition. Most said their fertilizer costs would increase significantly if biosolid fertilizer were unavailable. “I got an extra hay cutting this year after using it,” one Oklahoma farmer said. )

While the Luther ban only impacted a few farmers, White, whose term as mayor ended in 2021, believes it was an important message from a community where agriculture remains a vital part of the local identity.

“We’ve been called a bunch of crazy environmental activists, but I don’t know how it’s crazy to make sure your food and water aren’t contaminated for your kids,” said White, a Republican who drinks from a Donald Trump-themed thermos while driving.

“A Democrat or a liberal is going to drink the same tainted water that a Republican or conservative is. Everybody is screwed, it’s not a selective screwing,” she added.

But biosolid fertilizer is rankling local Republican politics as it’s become a central issue in the race for House District 32, which is near Luther.

Incumbent State Rep. Kevin Wallace appeared to be a lock for reelection. He has represented the heavily conservative seat for five two-year terms and has risen up the ranks of Republican politics, including as chair of the high-profile House budget committee.

However, Wallace’s use of biosolid fertilizer on his land has drawn criticism from voters. During a June 4 candidate forum, Wallace was confronted by some constituents who asked why he wouldn’t come out against the fertilizer, what they called “humanure.”

“The biosolids sludge is regulated by the Department of Environmental Quality, I have used it twice … it has been legal to use in this state for eight years now,” Wallace said at the forum.

Wallace acknowledged he had received complaints from his neighbors, but “property rights is what I’m for … (and) I’m not breaking the law,” he told the audience.

Two weeks later, Wallace finished second in the Republican primary, advancing to an Aug. 27 runoff against challenger Jim Shaw, who opposes the use of biosolid fertilizer.

Wallace declined an interview request but in an emailed statement said biosolid fertilizer was “heavily” regulated at the state and federal levels.

“I have had the Department of Environmental Quality into the district in the past to answer questions at a forum and the state of Oklahoma has worked directly with top administrators at the EPA in Dallas on this issue to ensure environmental standards are met,” Wallace said in his statement. “The bottom line is, the only alternative to current disposal of biosolids is for more of it to be dumped in landfills, which will create more landfills in rural Oklahoma.”

More than 44,000 metric tons of biosolids were applied on Oklahoma fields in 2023, according to records from the Oklahoma Department of Environmental Quality, which issues permits to apply biosolid fertilizer. Around 40% of all biosolid fertilizer in the state was processed by Oklahoma City waste.

Oklahoma has limits for 10 pollutants in fertilizer, including mercury and arsenic. State laws also require fertilizer to have a solid consistency of greater than 50%, be tested for viruses and to raise the pH level, which is most often achieved through the use of lime.

But Shaw, the District 32 challenger who finished first in the June Republican primary, said if he were elected it would send a message that “the majority of people out here are saying no to this practice.”

“I would say the awareness of (biosolid fertilizer) has significantly increased in recent months, especially during the campaign,” Shaw said. “I’m all for property rights but my right to swing my fist stops where it hits your nose, … and once (the fertilizer) is applied it does reach beyond the four corners of your property.”

Federal regulations spurred a biosolid industry controlled by a few companies

When Congress passed the Clean Water Act in 1974, cities and towns faced stricter rules on how to process sewage. New biosolid materials needed to be disposed of and a handful of companies launched in an effort to fill the need.

Business picked up over the years as new rules were set, including a federal ban on dumping biosolid material in the ocean.

Established in 1986 in Texas, Synagro contracted with hundreds of cities to handle its biosolid waste, including land application as fertilizer. In 2000, the company purchased BioGro, another large biosolid firm, becoming the largest biosolid handler in the nation.

Synagro is a privately held company, so its valuation isn’t publicly available. However, in 2013 a European investment firm purchased the company for $480 million.

Since then, Synagro has acquired several other companies, entered the Canadian market and nearly doubled the number of municipal and industrial wastewater facilities it contracts with.

In 2020, Syangro was sold for an undisclosed price to West Street Infrastructure Partners III, an investment fund managed by Goldman Sachs.

Today, the company operates 24 facilities in the U.S. and Canada and handles 6.5 million tons of biosolid material annually, according to a 2023 company report.

“Biosolids provide multiple benefits to overall soil quality and health, including improved moisture absorption ability, recycling of micro and macro nutrients, carbon avoidance, reduced nutrient leaching, and lower use of industrially produced chemical fertilizers,” a company spokesperson wrote in an emailed statement to Investigate Midwest. “U.S. EPA and state environmental agencies have approved and regulated biosolids for decades and multiple risk assessments and scientific studies have found that biosolids recycling presents little to no risk to human health and the environment.”

Synagro handles much of the biosolid material produced by Oklahoma City’s wastewater system, although it doesn’t contract directly with the city.

Oklahoma City contracts with Inframark to manage its wastewater system. Inframark then sells the biosolid material to Synagro.

“The City of Oklahoma City (does not) have a direct contract with Synagro,” said Jasmine Morris, a spokesperson for the city, when asked why Investigate Midwest was unable to get a Synagro contract through an open records request. “Under contract with (Oklahoma City), Inframark is responsible for the disposal of biosolids. Under said contract, what Inframark self-performs, or who they subcontract to, is at their discretion. Currently, they are using Synagro South LLC for this activity, but the terms of their contract with Synagro are not disclosed to (the Oklahoma City Water Utilities Trust).”

Amid the increased focus on PFAS chemicals in waste and fertilizer, Synagro has also lobbied to ensure cities and companies are not held liable.

In 2022, the company created a nonprofit business association called the Coalition of Recyclers of Residual Organics by Practitioners of Sustainability (CRROPS). Synagro’s CEO, Bob Preston, serves as chairman of the organization, which has spent $220,000 on federal lobbying since its founding, according to lobbying disclosure forms.

Last year, as the EPA considered new rules on PFAS levels in drinking water, the coalition urged lawmakers to shield companies and cities from legal liability.

“We write to urge that any legislation … include a specific provision to ensure that the organizations we represent are explicitly recognized as ‘passive receivers’ of PFAS and afford these essential public services a narrow exemption from liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA),” CRROPS wrote in an Aug. 24, 2023 letter.

But as Synagro attempts to someday prevent lawsuits, legal challenges have already arrived.

Earlier this year, five Texas farmers sued Synagro, claiming their properties were “poisoned by toxic chemicals” in the biosolid fertilizer the company spread on nearby farms. Some of the plaintiffs also claim they began suffering from respiratory problems and skin irritation when the biosolid fertilizer was spread.

Many of the plaintiffs also claim their groundwater has elevated levels of PFAS, with one farmer stating that a serving of one fish from his pond would exceed the EPA’s recommended PFAS exposure by 30,000 times.

For the past five years, Synagro has contracted with the city of Fort Worth to manage its biosolids programs and has spread the processed waste in 12 north Texas counties. The lawsuit claims Synagro should have issued stronger warnings about its fertilizer product.

“Synagro knew, or reasonably should have known, of the foreseeable risks and defects of its biosolids fertilizer,” the lawsuit states, which was filed in Maryland, where Synagro is based. “Synagro nonetheless failed to provide adequate warnings of the known and foreseeable risk or hazard related to the way Synagro (Granulite) was designed, including pollution of properties and water supplies with PFAS.”

In a statement to Investigate Midwest, Synagro denied the allegations, calling them “unproven and novel.”

“As a matter of fact, without any response from Synagro, the plaintiffs have already amended the complaint to drastically reduce the concentrations of PFAS alleged in the complaint when it was originally filed,” the company said in an emailed statement. “The biosolids applied by a farmer working with Synagro met all U.S. EPA and Texas Commission on Environmental Quality (TCEQ) requirements. U.S. EPA continues to support land application of biosolids as a valuable practice that recycles nutrients to farmland and has not suggested that any changes in biosolids management is required.”

Some push for nationwide regulations 

As Synagro lobbies for federal liability protections, lawmakers in Oklahoma recently considered a similar proposal that would protect cities and companies from lawsuits if the biosolids they produce and convert into fertilizer were later found to be harmful.

Oklahoma House Bill 2305 stated that a waste management or disposal company, along with a public wastewater treatment facility, “shall not be liable … for costs arising from a release to the environment of a PFAS substance” as long as state laws are followed.

The bill received overwhelming bipartisan support in both the House and Senate but failed to receive final approval before the legislative session ended in May.

During an April 4 Senate committee hearing, Sen. Dave Rader, a Tulsa Republican, presented the bill and said he wanted to ensure cities were protected from liability since they were not responsible for producing the chemicals found in biosolid fertilizers.

But one lawmaker asked if the bill would still protect polluters.

“Does this create an alibi for the person who pollutes a water source and says, ‘I followed the state procedure, so it’s not my fault?’ ” asked Sen. Dusty Deevers, an Elgin Republican.

“I suppose it could,” Rader answered.

Scott Thompson, then the director of the Oklahoma Department of Environmental Quality, was also in the room supporting the bill.

“(Cities and towns) are receiving this PFAS in the waste stream … what we are concerned about is the future liability under the federal law as they get passed,” Thompson told lawmakers. “(The EPA) is going to very tiny numbers that we have to measure and essentially creating potential liability for everyone that has to receive this and manage it.”

Asked about Thompson’s comments, Oklahoma Department of Environmental Quality officials reiterated their support.

“DEQ would support some version of federal legislation that provides protection for certain passive receivers who provide critical, public health services,” said Erin Hatfield, the agency’s director of communications and education. “As for increased PFAS standards, DEQ would like to see additional research done to further determine health impacts related to PFAS and standards based on scientific findings.”

Other states have said the health impacts are already apparent and biosolid fertilizer should be banned or severely restricted.

In 2022, the Maine legislature banned the use of biosolid fertilizer and allocated $60 million to help contaminated farms, including many dairy farms that were forced to shut down.

In Michigan, where cattle farms have been forced to shut down due to tainted beef, biosolid PFAS standards are stricter than in most states. The state also has an aggressive investigation program to try to identify the specific source of PFAS contaminants.

However, some environmental watch groups have scoffed at a state-by-state approach, calling for nationwide regulations instead.

Earlier this year, the Maryland-based environmental nonprofit Public Employees for Environmental Responsibility, or PEER, sued the EPA over the lack of biosolid fertilizer standards.

“EPA has deemed it acceptable for biosolids containing PFAS and other known toxic chemicals to be applied directly to soil as fertilizer, where these man-made contaminants then build up in the environment, exacerbating the PFAS contamination crisis,” Tim Whitehouse, PEER executive director, wrote in a Feb. 22, 2024 letter to the EPA. “This is not protective of human health or the environment.”

The EPA declined to comment on pending litigation.

While the EPA has made progress on congressionally-mandated PFAS rules related to drinking water, it has yet to complete a risk assessment of PFAS in biosolid, according to tracking by the Environmental Working Group nonprofit.

“We are really hoping to see them finish that up by the end of the year and to really get a good picture of just how much of our overall exposures to PFAS is the result of PFAS in biosolid potentially contaminating our food supply and our environment,” said Hayes, the policy analyst with EWG. “In the meantime, states have been leading the charge and taking action.”

This article first appeared on Investigate Midwest and is republished here under a Creative Commons license.

Jess Bray stands on the dirt road leading into Blue Mountain Farm, which she operates near McCurtin, Oklahoma, on June 17 (Ben Felder/Investigate Midwest).

As Jess Bray pulled up to a 21-acre farm nestled in an eastern Oklahoma valley, she instantly got a warm feeling. “This is the place,” she thought.

After attempting to buy two other properties before being outbid by cash buyers, Bray and her husband Jon began to wonder whether their dream of owning and operating their own farm would become a reality.

“We always wanted to farm, but we aren’t trust fund kids, we didn’t grow up in agriculture … we didn’t have a farm handed down to us, so it wasn’t something that was very accessible to us,” Bray said. “This was a dream come true … but it wasn’t without challenges.”

In 2022, Bray, then 39, purchased the valley property, which they now operate under the name Blue Mountain Farm, growing a variety of vegetables, and raising pigs and a dairy cow near the town of McCurtin.

While Bray eventually realized her dream, the rising cost of farmland has priced out many other would-be farmers and ranchers or forced others into early retirement. The parts of the country where farmland prices have seen the largest increase have also been where the number of agriculture producers has declined the most.

From 2017 to 2022, the average value per acre of all American farmland grew from $4,368 to $5,354, an increase of nearly 23%, according to USDA data on the market value of farmland and its buildings.

But in the 409 counties across the country that saw a producer decline of 15% or greater over the past five years, average farmland values increased by 31%, according to Investigate Midwest’s analysis of USDA reports, land value records and other property data.

Boom or bubble? High Missouri farmland prices encourage investors, concern farmers

In reviewing property records and speaking with more than a dozen officials who closely track farmland values, Investigate Midwest found there are multiple causes for the decline in producers in counties that saw the most significant increase in value:

• Population growth expanding into rural communities has increased prices and reduced farmland as 11 million acres of agricultural land were converted into residential properties from 2001 to 2016, according to the American Farmland Trust.
• The push towards wind and solar energy, often backed by government subsidies, has also raised land rents much higher than for traditional agricultural use.
• Large investment firms, such as Farmland Partners, PGIM and Gladstone Land, are paying top dollar for land and reselling some property at amounts as much as five times higher than the regional average.
• The move towards industrial farms has also meant more corporate land buyers who can pay cash and beat many local offers.

“The biggest competition (for farmland) used to be from the person who wanted a hobby farm but maybe wasn’t farming full time,” said Vanessa Garcia Polanco, a policy campaign director with the National Young Farmers Coalition. “Today, the biggest threat we see is from corporations and hedge funds.”

The increase in competition for farmland has been especially detrimental for young and would-be farmers. According to a 2022 National Young Farmers Coalition survey,​​ 59% of farmers under 40 said finding affordable land was “very or extremely challenging.”

Farmland ownership has received increased attention from lawmakers in recent years, especially concerning foreign-owned companies. Lawmakers in dozens of states have pushed laws limiting foreign land ownership, including from countries like Iran and China, often claiming these buyers drive up costs that push out family farms.

However, U.S. Agriculture Secretary Tom Vilsack recently called that focus misguided and said the growth in American investment firms buying farmland is a more pressing concern.

“Do you know roughly a third of all the farming operations that generate more than $500,000 in sales are owned by investment outfits? Are you concerned about Wall Street owning farmland?” Vilsack said in response to a question about foreign-owned land while speaking at the North American Agricultural Journalists conference in April.

But Paul Pittman, the executive chairman of the investment firm Farmland Partners, said companies like his were not to blame for rising prices and were keeping many farms in production.

“That’s populist B.S. and nothing less,” Pittman told Investigate Midwest when asked about Vilsack’s comments. “And remember, for every farmer who is whining about being outbid, there’s a farm family that owned that farm for 100 years and deserves to get the highest price possible.”

Investment firms significantly increase farmland holdings

In the spring of 2023, the Farmland Partners investment firm spent $8.85 million in cash on 1,840 acres of farmland in Haskell County, Oklahoma. The land was a highly productive swath of soybean, corn and wheat fields with an irrigation system pulling water from the nearby Canadian River.

The Denver-based firm had grown in recent years to become the nation’s largest farmland investor, with a valuation of more than half a billion dollars and a portfolio of more than 180,000 acres across the country.

One of the firm’s land buys in Oklahoma was a 174-acre property for $3 million. At $17,232 an acre, the Oklahoma purchase was five times more than the median for comp sales in the area, based on data from the land value tracking site AcreValue.

However, the firm had shown that its high purchase prices were likely to pay off. It had recently sold nearly 2,500 acres of farmland in central Nebraska and South Carolina for a combined $16.2 million, a transaction that netted Farmland Partners a 24% return on investment, the company announced.

According to data from the National Council of Real Estate Investment Fiduciaries, investment firms increased their farmland holdings by 231% from 2008 to 2023. While traditional real estate property is constantly expanding, many investors see the decrease in available farmland as a partial driver of its value.

Most farmland investment firms lease the land back to producers who operate the entire farming business. In a recent SEC filing, Gladstone Land, which owns 111,836 acres of farmland across 15 states, said it rents most of its land to farmers on a “triple-net basis,” which means the tenant pays the related taxes, insurance costs, maintenance, and other operating costs in addition to rent.

However, Pittman, the chairman of Farmland Partners’ board of directors, said there are signs that more farmers are struggling to afford rents.

“There’s a little more trouble out there than there was 12 months ago … and we’re seeing it in having an occasional farmer come to us and say, ‘Hey, can you re-rent this farm to someone else?’ ”Pittman said on a May 1 investor call, according to a transcript. “When we’ve had that occur, we’ve been able to (re-rent) the farms at the same price or in some cases, a little bit higher.”

Asked about Vilsack’s comments, Pittman said declining commodity prices are pinching some farmers.

“Starting in about 2019, commodity prices started to go up pretty fast, but here we are in 2024, and commodity prices have pulled back,” Pittman told Investigate Midwest. “This is a low margin business … so when you see a little bit of a drop in commodity price, it can challenge (a farmer) financially.”

However, Pittman said his firm’s investments remain solid because, in the agriculture sector, “bankruptcies are minuscule.”  The 2022 farm bankruptcy rate was 0.84 per 10,000 farms, its lowest rate in nearly 20 years.

While most farmland is rented to producers, there are times when an alternative use can fetch even more money. Wind farms can attract lucrative rents and often allow the land to remain agricultural. However, the growth in solar farms, which also attract high rental rates, usually means the land can no longer be used to grow crops or raise livestock because of the large solar panels near the ground.

“In Illinois, for example, a farm that may rent for $400 to $500 an acre a year for agriculture, rents for $1,250 to $1,500 a year for solar, and the farmer cannot compete with that,” Pittman said. “To be honest, (when I’m wearing) my fiduciary obligation to my investor’s hat, if somebody offers us $1,500 an acre, it’s going to go to solar. But wearing my Paul the citizen hat, I’m not sure that’s a great thing.”

Industrial farm growth led to a ‘hollowing out of the middle’

In most counties that lost producers, agriculture production actually increased as the remaining farms often grew larger or were converted to industrial operations.

Wisconsin’s Douglas County, located in the state’s northwest corner, lost 31% of its producers from 2017 to 2022 but saw net cash farm incomes more than double and sales from agriculture products increase by 45% during that same period.

Across the state, five counties saw a producer decline of at least 15% yet also saw agriculture production sales increase.

“Many operators continued to exit, and this happened rapidly among Wisconsin dairy farms,” said Jeff Hadachek, an agriculture professor at the University of Wisconsin. “At the same time, the farms that remained were increasing in size.”

Hadachek said the increase in farm production means the local economy may still be growing even with a loss of producers.

“I think economists would typically say that just looking at the number of farms is not the best way to consider economic health in a community,” Hadachek said. “Certainly, for the people who own land, the increase in value is a great thing … so there are two sides of the issue for sure.”

Like most types of farming, Wisconsin’s dairy industry has seen a move towards more industrial operations to improve efficiency, which can increase profits in a sector with tight margins for smaller dairy farmers.

In 1997, the average Wisconsin dairy farm had 55.6 cows, while the 2022 average topped 203 per farm, according to research from the University of Wisconsin.

Some farmland investors see profit opportunities in the transition to larger farms and are predicting a continued shift toward industrial agriculture.

“An aging farmer generation, fractional family ownership structure and technological advances requiring sizable capital investment will naturally transition farmland holdings from individuals to institutions,” stated a report from PGIM, the $10 billion property asset management company run by Prudential Financial that has increased its farmland holdings in recent years.

Hadachek said the growth in larger operations has led to a decrease in medium-sized farms, what he calls a “hollowing out of the middle.”

“The growth in the larger end reflects consolidation and the economies of scale and size associated with large farms, while the growth in the smaller end reflects growth in specialty foods, farms targeting the ‘local foods’ market, and hobby farming,” Hadachek said.

But Pittman, the executive chairman of the investment firm Farmland Partners, said data on the decline in the number of farms across the country can be deceiving.

From 2017 to 2022, America lost 141,733 farms, but 80% of those lost farms had less than $2,500 in annual sales.

“You and I know those aren’t really farms, I don’t know why they’re called farms,” Pittman said. “If you’re talking about supporting a family or two families on a farm, you are talking about at least a million dollars in annual sales, which would give you about $50,000 in distributable household income to send your kids to school and pay for food and all that.”

USDA data shows the nation lost 10,537 farms with annual sales of $100,000 to $499,999, but farms making more than $500,000 grew by more than 26,000.

Some states, nonprofits work to protect farmland from development

Construction sounds have become a constant echo in McCurtin County, Oklahoma, where cabins and resorts are being built in the pastures and forests between the Ouachita Mountains and Red River. Tourism growth, especially visitors from the Dallas metro, which is within a two-hour drive, has increased local farmland prices much faster than the state average.

From 2017 to 2022, McCurtin County lost nearly one out of every five producers while the average value per acre soared from $1,901 to $2,601 as investors, second-home buyers, and some private equity firms snatched up land to build vacation homes or sit on the land while its value grew.

“When someone’s waving that kind of money at grandpa’s farm, they let ’em have it,” said Brent Bolin, a poultry producer in McCurtin County, who is also a state agriculture commissioner.

In a recent report titled “Farms Under Threat,” the American Farmland Trust found that between 2001 and 2016, more than 11 million acres of farmland was converted to urban and residential use, with Texas, California, Arizona, and Georgia topping the list.

To stall the urbanization of farmland, the American Farmland Trust, a nonprofit that says it wants to expand the “conservation agriculture movement,” has facilitated the purchase of more than 78,000 acres to protect it from nonagricultural uses.

Some states have taken similar measures, including Oregon, where counties must protect some farmland through specific zoning restrictions.

Bolin said zoning restrictions might be worth considering, although he’s hesitant to suggest them.

“It’s something that would be super controversial and I don’t know where I stand on it,” Bolin said. “I know there are some states that help protect farmland, but that is more regulation and we don’t like that here in Oklahoma. But I don’t know what the answer is.”

Even if farmland is protected from being converted into another use, young farmers still struggle to compete with cash buyers. While many of those cash-buyers, including investment firms, rent the land to farmers, critics say that creates a system that lacks stability for farmers and ranchers, especially those looking to start a business for the first time.

“The contract could be a three-year lease or a five-year lease, but that’s not much long-term security for a farmer,” said Polanco with the National Young Farmers Coalition.

Bray, the Oklahoma farmer, said owning land was crucial for her to have the kind of control she wanted over her business. It also allowed her to make more environmentally focused decisions about land use.

But when Bray was looking to buy land, competing with cash buyers was even more difficult because her own financial options took a long time to fulfill.

“Not only did we have to finance but we were kind of forced into a commercial funding route instead of the state program route because the government programs take too long,” Bray said.

The National Young Farmers Coalition has advocated for the Farm Service Agency to be made a loan-making institution with pre-approval and pre-qualification processes to give farmers needing financing a better chance at competing for land.

“This would allow farmers to show they are eligible, especially if the seller wants an offer right away and has a cash offer from a corporation,” Polanco said.

Even when Bray was able to purchase her current property, complications arose from the land’s previous owner, a cash buyer who made a quick purchase.

“Moving in, it took us months and months and months to get in our property because of how it was handled before,” Bray said. “The title had never been transferred, so we had to wait for that to be transferred to the prior owner before it could be transferred to us. And there was official paper that they had run out of stock on, somebody forgot to order the official state paper for the licenses and titles and all of that, so that was another waiting game.”

During the delays, Bray’s Realtor warned them they might have to move on to another property.

“He said, ‘Honey, if you don’t get this, don’t feel bad, we’ll keep looking,’ ” Bray recalled. “But I said, ‘No, we will wait,’ because … I had that feeling when we got here that this was the place. This was our dream, but you know, high interest rates, the prices of the properties and the margins as a farmer, those three things don’t go together, they just don’t.”

This article first appeared on Investigate Midwest and is republished here under a Creative Commons license.

Iowa, North Carolina, Illinois, Minnesota and Missouri had the most pigs born in the country from 2013 to 2023, accounting for roughly half of the nation’s pork supply (Scott Olson/Getty Images).

In 2021, two years before California enacted new hog confinement standards for pork to be sold within its borders, Seaboard Foods said it would “no longer sell certain whole pork products” in the state.

Passed in 2018, California’s Farm Animal Confinement Initiative, often referred to as Proposition 12, required pork producers to give sows, or mother pigs, at least 24 square feet of space per animal.

Nearly 5% of Seaboard’s 7 million hogs produced each year are sold in California but the company said the coming Prop 12 standards would significantly decline how much business it would do moving forward in the nation’s most populous state.

But when the new standards went into effect on Jan. 1, 2024, Seaboard was listed as a Prop 12-compliant distributor with the California Department of Food and Agriculture.

“In our connected food system, our farms raise market hogs born from sows in various housing types based on customer requirements, including … for Prop 12 group housing compliant for California,” David Eaheart, a spokesperson for Seaboard, told Investigate Midwest when asked about the company continuing to sell into California. “Because of this, we can flex between different sow housing requirements to produce pork products based on customer demand.”

Seaboard did not say how its business this year compares to years past. But it’s an example of how many of the nation’s largest pork producers, who once said the new standards would limit or end their business in California, are adapting to the new standards.

Investigate Midwest reviewed financial statements from more than a dozen of the largest pork-producing corporations and California’s new Prop 12 pork distribution lists, along with speaking to several hog farmers to better understand the impact Proposition 12 is having on their industry.

Two months into the new Prop 12 standards, the picture that emerged is one where the nation’s largest pork producers are largely adapting to the new rules in an effort to continue sales in a state that consumes about 15% of the nation’s pork, the highest rate in the nation, according to consumption estimates from the National Pork Producers Council.   

The Biden administration is also concerned that Prop 12 could create a 50-state patchwork of legislation for hog producers.

In 2022, the administration asked the Supreme Court to strike down California’s animal confinement legislation.

At a February Senate Agriculture, Nutrition, and Forestry Committee hearing, U.S. Department of Agriculture Secretary Tom Vilsack said he supported the federal government stepping in to clarify these regulations.

“Farmers don’t need the chaos,” Vilsack said. “They need clarity and certainty.”

While many of America’s largest pork producers and distributors have said they plan to comply with the new law, some have blamed the additional hurdles for recent plant closures and layoffs. More than 230 out-of-state distributors already have been licensed to sell pork in California by the state’s Department of Food and Agriculture, according to the agency’s latest registered distribution list.

Some local hog farmers with compliant pens have found an opportunity to sell into a new competitive market, while those with non-compliant operations have balked at the new standards, claiming it would be too expensive to comply with or is against their principles.

“I don’t like California telling me (that) to be able to sell in this state, I have to raise these pigs this way,” said AV Roth, who owns a 3,000-sow farm in Wisconsin.

Roth, who is also vice president of the Wisconsin Pork Association, said none of his hogs will ever go to California because he’s against another state regulating his business. His sows are housed in 14-square-foot gestation crates.

“If they want to tell their farmers in California how to raise pigs that’s totally fine by me, but this is the great country of the United States and I should be able to sell in all 50 states,” Roth said.

Dan Sumner, a professor of agriculture economics at UC-Davis, said that sentiment is common among many hog farmers.

“Frankly, a bunch of know-nothing Californians who’ve never been on a hog operation think they can tell these guys what’s better for their pigs,” Sumner said. “If I was a hog farmer I’d be pissed off. It’s just insulting.”

Anti-Prop 12 groups, including the National Pork Producers Council, claim hog farmers would have to spend $3,500 per sow to become compliant. The council, along with the American Farm Bureau, has vowed to continue pursuing legal and legislative avenues to overturn Prop 12.

But animal welfare organizations have called the cost estimates overblown and said new confinement standards are the ethical thing to do.

“I don’t think anyone needs to be a rocket scientist to understand that having space to lie down and stretch your legs is necessary for mental and physical well-being,” said Allison Molinaro, U.S. campaigns manager for the nonprofit organization Compassion in World Farming. “Living in a gestation crate is like having a human live in a telephone booth.”

Where’s the pork?

California is the nation’s largest consumer of pork products but pinpointing exactly where the state’s pork supply comes from is not clear.

According to the California Department of Food and Agriculture, before Prop 12, no public data tracked how much pork comes from specific states or companies. To see which states could be impacted the most by Prop 12, Investigate Midwest analyzed U.S. Department of Agriculture data to locate where most baby pigs are born.

Iowa, North Carolina, Illinois, Minnesota and Missouri had the most pigs born in the country from 2013 to 2023, accounting for roughly half of the nation’s pork supply.

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Local chapters of the National Pork Producers Council located in these major states declined multiple requests to comment, but economist Steve Meyer, a consultant with the National Pork Producer Council, told the Des Moines Register in 2022 that less than half the pork sent to California met Prop 12 standards, at that time.

In January, Meyer told Investigate Midwest he estimates there still isn’t enough compliant pork supply in the U.S. to meet demand based on what California consumers have eaten in the past.

While there aren’t available data points to support this claim, Meyer said he was confident the nation is short roughly 250,000 complaint sows to meet California’s historic demand, which would lead to either a price increase or a lack in availability for cuts of pork.

“I believe the covered products are in short supply, and California consumers are substituting exempt pork products and other proteins,” Meyers said.

Premade pork products are exempt from Prop 12 standards, including sliced ham, salami and deli meat.

Most of the nation’s major pork producers have taken steps to become compliant with the new California law, some starting the transition more than a decade ago.

Smithfield Foods, the nation’s largest pork producer and owner of some 885,000 sows, has spent years transitioning to group housing that meets the standards of Proposition 12.

The company owns more than 400 pork production farms in Colorado, Idaho, Illinois, Missouri, North Carolina, Oklahoma, South Carolina, Utah and Virginia, according to Smithfield spokesperson Ray Atkinson. According to the company’s 2021 Sustainability Report, all of the company-owned farms are compliant with large, group housing for sows.

Smithfield Foods, the nation’s largest pork producer and owner of some 885,000 sows, has spent years transitioning to group housing that meets the standards of Proposition 12.

The company owns more than 400 pork production farms in Colorado, Idaho, Illinois, Missouri, North Carolina, Oklahoma, South Carolina, Utah and Virginia, according to Smithfield spokesperson Ray Atkinson. According to the company’s 2021 Sustainability Report, all of the company-owned farms are compliant with large, group housing for sows.

The company contracts out pork production to more than 2,000 contract farmers across the county, and information about the compliance of these farms was not made available.

“We have established supply agreements for Prop 12-compliant pork and will continue to engage customers to expand the availability of compliant products,” Atkinson said in an email.

Still, the company has openly complained about the new Prop 12 standards, and said it was one reason it recently closed meatpacking plants in California.

Atkinson said Smithfield continues to sell into California but its sales numbers are confidential.

“We fully support a federal legislative solution that will resolve a growing patchwork of state-by-state regulations that make it increasingly difficult to keep food affordable,” Atkinson said.

Other major pork producers and grocery chains have said they are compliant with Prop 12 as of the beginning of 2024:

• Tyson Foods did not respond to repeated requests for comment. However, in a 2021 earnings call, Tyson CEO and President Donnie King said that the company is ready and able to provide compliant pork products. “It’s not something we were excited about, but we can align suppliers, and we can certainly provide the raw material to service our customers in that way,” King said.

• Clemens Food Group, a major pork producer based in Pennsylvania, has been Prop 12 compliant since the beginning of 2023. The company has “fully transitioned to group housing for all our sows,” said Brad Clemens, the company’s president, in a statement.

• JBS, the nation’s fifth largest pork producer, purchased an Iowa pork producer in 2022 to expand its Prop 12-compliant sow housing. According to a translated transcript of a November 2023 corporate earnings call filed with the U.S. Securities and Exchange Commission, the Brazil-based company said it took steps to begin transitioning into Prop 12 compliance when there was still “uncertainty” about the legislation becoming successful. The company did not respond to repeated requests for comments.

• The top five grocery retailers in California — Walmart, Albertsons, Grocery Outlet, Kroger and Trader Joe’s — are all complying with the state’s confinement legislation to varying degrees. Albertsons’ website notes that some of their suppliers have decided not to comply with Prop 12 standards, which could limit the pork products sold on store shelves. Walmart’s website notes that it has asked its suppliers to “implement solutions to address concerns regarding housing systems that lack sufficient space, enrichment, or socialization, such as sow gestation crates.” According to Kroger company documents, the chain aims to have all of the pork they sell come from sow group housing by 2025. Trader Joe’s spokesperson Nakia Rohde said the grocery chain has provided gestation crate-free pork since 2018, which is clearly labeled in California and Massachusetts stores. Rodhe said in an email that the company sources its pork from the Midwest, but didn’t further clarify the sourcing. Grocery Outlet did not respond to a request for comment.

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While California is the largest pork-consuming state in the U.S., a growing amount of the nation’s pork is being sent overseas, lessening the impact of Prop 12 on many large producers.

Until 1995, less than 5% of American pork production was exported. Today, 27% of U.S. pork is exported, a higher rate than beef or poultry.

There were some concerns that Prop 12 could have an impact on exports because much of America’s pork destined for Asia passes through California ports. But several weeks into Prop 12, export officials said they haven’t seen any problems.

“The bottom line is that so far exports transiting California for shipment out of the West Coast ports seem to be flowing smoothly,” John Herath, a spokesperson for the U.S. Meat Export Federation, told Investigate Midwest.

Pork industry says it will continue to fight Prop 12

National agriculture groups and major pork producers originally hoped a legal challenge would end Prop 12 before it ever started. But the American Farm Bureau and the National Pork Producers Council’s lawsuit was struck down by the U.S. Supreme Court, where a 5-4 ruling last year upheld the law.

Despite the loss, the groups said they continue to look for ways to overturn Prop 12.

“If we are going to have a patchwork of 50 different rules, that is going to make it very difficult … to produce livestock efficiently in this country,” Jack Irvin, vice president of public policy for the Ohio Farm Bureau, said from the American Farm Bureau’s national convention in Salt Lake City in January.

Prop 12 was a major discussion topic at the convention, Irvin said, where members passed a resolution asking the farm bureau to continue its opposition against the measure, including pushing for a federal law banning state-level confinement standards.

But opponents of a federal law banning Prop 12 claim it would create further chaos.

The Ending Agricultural Trade Suppression Act, also known as the EATS Act, is a proposal in Congress that would prevent states from enacting laws similar to Prop 12. But a Harvard Law School analysis of the EATS Act warned it could have consequences beyond just regulations on animal confinement and jeopardize more than 1,100 state laws related to invasive plant disease protection, food safety regulations, horse slaughter laws and some narcotic laws.

Supporters of Prop 12 believe lawmakers should focus more on helping farmers retrofit their operations.

U.S. Rep. Angie Craig, a Minnesota Democrat, told the Brownfield radio network in January that her office was looking into federal grants to help pork producers adhere to Prop 12 standards.

In Oklahoma, Senate Bill 1325 would create a $4 million fund to provide grants to pig farmers to remove gestation crates and build new structures that meet California’s standards.

Prices still leveling out while producers see new market

Economists are also watching the impact Prop 12 might have on consumer prices, with some estimating the new law will increase the price of pork in California by roughly 25 cents per pound, according to a study by the University of California.

A California Department of Finance analysis estimated that consumers of egg and whole pork products would pay $1.1 million more for the newly regulated commodities in the first year of Prop 12.

Data for the price increases since Prop 12 became law is sparse. In November 2023, the USDA began tracking the average premium paid to producers for hogs sold under California’s confinement legislation. The amount paid to producers for being compliant with the law is negotiated between processors and producers. The average premium given to compliant producers was $6.30 per hundred pounds in the first month of the year, in addition to the base price paid for their hogs.

For some producers, the price increase and growing interest are seen as an opportunity to expand into new markets.

In Clear Lake, Iowa, Chris Petersen has operated a hog farm since the 1970s, raising thousands at a time up until the Iowa hog market crashed in the late 1990s.

Now, he raises a few hundred hogs a year with 30 sows on his farm. None of his animals are in gestation crates or confinement, and they never have been.

“I don’t believe in totally confining any type of livestock down to a small cage,” Petersen said.

Rather than going through large packing companies, he raises a premium breed of hogs known as Berkshires. He said it’s likely that some of his meat wound up in California before Prop 12 was finalized through the supply chain, but now that the ruling is in place, he sees California consumers as a new revenue stream.

“Absolutely I’ll sell to them,” Petersen said.

This article first appeared on Investigate Midwest and is republished here under a Creative Commons license.

(USDA Natural Resources Conservation Service photo by Brandon O’Connor).

Federal records on foreign-owned agricultural land include errors, lack details on subsidiaries and secondary owners, and are not provided to other government agencies in a timely manner, the U.S. Government Accountability Office reported in a recent audit.

Foreign companies are required to disclose land purchases or leases to the United States Department of Agriculture as part of the Agriculture Foreign Investments Disclosure Act (AFIDA) of 1978. Agencies like the Department of Defense and the Department of the Treasury use the information to evaluate potential safety concerns, such as a foreign entity purchasing land near a military base.

“However, according to DOD officials, they need to receive AFIDA information more than once a year, and they need information that is more up-to-date and more specific to help them identify relevant non-notified transactions and consider potential national security risks,” stated the GAO report, which was released on Jan. 18.

Foreign-owned land — which has increased by 40% since 2016 — has received increasing attention from government officials and politicians recently, including specific cases of Chinese companies buying land near Air Force bases in Texas and North Dakota.

Several states have imposed new laws banning foreign ownership of land and some members of Congress have proposed specific bans on companies with ties to China, North Korea, Russia and Iran.

The USDA has said it needs more funding to accurately inspect land ownership records and to meet a 2025 deadline of creating an online submission process. Foreign-owned companies currently submit records via mail or directly to local county offices.

As part of its 62-page report, the GAO audit agreed that more funding may be needed. It also offered six recommendations:

• The Secretary of Agriculture should establish a process to provide detailed and timely AFIDA transaction data relevant to foreign investments in agricultural land to the Committee on Foreign Investment in the United States (CFIUS), an interagency committee that reviews certain foreign business transactions.
• Clearer and specific instructions should be given to USDA staff and county employees for completing AFIDA responsibilities, including reviewing the accuracy of forms and identifying missing information.
• The Secretary of Agriculture should oversee an analysis of whether the USDA can satisfy the requirements of developing an online submission system and public database within its expected budget. If the analysis shows that the agency would be unable to meet the requirements, USDA should report the results to Congress and recommend appropriate legislative changes.
• USDA should improve its verification and monitoring of collected AFIDA data, such as reviewing and validating information throughout the data collection process.
• USDA should continue data mining activities that compare AFIDA information with other records to identify suspected non-filers.
• The Secretary of Agriculture should direct the chief operating officer of the Farm Production and Conservation Business Center to ensure its AFIDA reporting is complete, such as incorporating country information from additional foreign persons beyond the primary investor.

USDA officials said they agreed with most of the recommendations but had concerns about the sixth “without additional financial resources and personnel,” according to a letter from Gloria Montaño Greene, a deputy under secretary at USDA.

The USDA said it already planned to start providing data this year on companies with secondary ownership and other associations with China, Russia, Iran and North Korea. The GAO praised that step but said it was important to start reporting beyond the first tier of ownership, such as subsidiaries.

“This information is key to a comprehensive picture of foreign investments in agricultural land,” the GAO report stated.

Foreign-owned land growth has been most significant in Midwestern states like Oklahoma and Nebraska. Despite attention on Chinese-owned companies, most are European or Canadian companies buying or leasing land for wind and solar energy.

Several states have enacted laws in recent years to limit foreign ownership and the GAO report acknowledged better AFIDA records would help local enforcement.

“Some state laws incorporate AFIDA data into measures to monitor and enforce restrictions on foreign investment in U.S. agricultural land,” the GAO report stated. “However, during a March 2023 congressional hearing, the Secretary of Agriculture explained that USDA is reliant on foreign persons to self-report AFIDA information. The Secretary noted self-reporting is challenging to enforce because deeds are filed in over 3,000 county recorder offices. In September 2023, another USDA official noted that USDA cannot locate AFIDA filings beyond the county level, such as specific localities, and there is currently no system which tracks deeds or leases of agricultural land.”

In Oklahoma, a law approved last year seeks to stop Chinese-backed companies from buying agricultural land for marijuana production.

Arkansas officials recently told a subsidiary of Chinese-owned Syngenta Seeds, LLC, that it must sell 160 acres of land after that state passed its own law banning ownership by companies from China.

The company in Arkansas is not listed in AFIDA records, an example of how records often lack information beyond the primary investor, an Investigate Midwest analysis recently found.

In some cases, land holdings are counted multiple times in AFIDA records, the GAO report stated.

As part of its research for the report, the GAO interviewed two members of Investigate Midwest’s newsroom about their reporting on and analysis of foreign-held agricultural land.

This article first appeared on Investigate Midwest and is republished here under a Creative Commons license.