CAFOs distort markets

• Contract farming
• Why factory farms may be less economical than we think

Pew Commission, 2008

Small Large concentrated animal feeding operations (cafos) tend to have higher fixed costs than variable costs. This means that in hog cafos, large buildings must be kept full in order to minimize costs per animal unit; in the face of falling prices, large cafos will increase production because it lowers their overall cost to produce each pig as the conventional farmers reduce production. The result is that most small conventional farmers are driven out of the market by a glut of industrially produced pork.