KANSAS CITY — Missouri pork giant Premium Standard Farms' plan to install new technology that will prevent odors from its hog confinements from polluting the air outside its farms violates a previously set deadline and the company should expect to pay a fine, state officials said.
State officials said the company's plan to install the equipment in two years violates a July 31, 2010, deadline set in a 1994 court agreement. The company should not expect to get two more years to comply without paying a penalty, Attorney General Chris Koster's office said.
"We don't have in our mind at this point any preconceived idea about how far to take them to come into full compliance," said Joe Dandurand, a deputy attorney general. "Their position is they're in full compliance. Our position is they've not fully complied. We're trying to work out an agreement."
Dandurand said he is "cautiously optimistic" a deal can be reached that satisfies both sides. Failure to strike such a deal by the end of August could result in the state's filing additional lawsuits against the company, he said.
For years, residents near PSF have complained about manure and other rotten egg-like smells wafting off the facilities. Few have complained about health issues, but neighbors say the pervasive smell hurts their quality of life.
Premium Standard agreed in a 1999 consent judgment to invent a means to reduce odors and other environmental problems at its Missouri operations. Since then, the company has spent $40 million to research and field-test at least 13 different types of systems, PSF officials said.
Company officials said they didn't find one that qualifies as "next-generation technology" until April, and it will take until July 31, 2012 to have that technology operating at seven of its 11 farms.
"The attorney general suggests that sanctions should be imposed for failure to install technology that did not exist — this makes no sense," said Jean Paul Bradshaw, a Kansas City attorney representing Premium Standard. "You cannot install what does not exist."
The 1999 judgment was the culmination of a lawsuit filed by then-Missouri Attorney General Jay Nixon, who is now the state's governor. As part of that court ruling, Premium Standard was required to spend $25 million to resolve environmental issues, including odor.
Company president Bill Homann has acknowledged there were problems, including spills and effluent releases, before the 1999 agreement. But he says Premium Standard has done more than any other company in the country since then to find a solution to hog odors.
That work has not insulated Premium Standard from nuisance lawsuits that have resulted in multimillion dollar awards against the company. In March, a group of 15 northwest Missouri residents — including 14 who received $100,000 apiece in the 1999 lawsuit — were awarded a total of $11 million.
Homann said Premium Standard is facing hundreds of additional lawsuits from people who claim their lives have been damaged by the presence of the company's mega-confinements.
After the March verdict, Premium Standard officials warned continued lawsuits could push the company out of the state. Such a move would cost about 1,100 Premium Standard jobs, they said, and jeopardize 1,400 workers at a processing plant in Milan, where about 70 percent of business comes from PSF.
Before any next-generation technology could be installed, it had to be approved as NGT by a three-member "expert team" of university professors from across the country. The team qualified biofilters as NGT in 2007, but Premium Standard said it tried and failed to design one that met odor-reduction requirements in the barns.
The expert team approved a combination of barn scrapers and other previously implemented systems in April, three months before the deadline.
PSF plans to install the new systems at seven of its 11 Class 1A farms. Farms in that category have at least 17,500 hogs, and some of Premium Standard's farms have more than 150,000.
The company plans to do nothing more at one of its farms where an earlier system was deemed sufficient. For each of the other three farms, PSF will reduce the number of hogs to below 17,500 to get them to a Class 1B designation and no longer covered by the 1999 or 2004 decrees.
Premium Standard said it will have to cut 80 percent of the hog population at those farms to reach the 17,500 goal. The company said that will cost some jobs, but it will keep the farms operating until Premium Standard can come up with the $16.5 million necessary to install the new technology.
In its response to Premium Standard's July filing, Koster's office blamed the missed deadline on questionable business decisions, rather than an inability to develop workable technology.
But Bradshaw notes that the last three years have been some of the worst ever for pork producers because of low prices and high production costs.
"When you've lost the kind of money they've lost in the last three years, and the state says it's no big deal to come up with $16.5 million, that shows a fundamental misunderstanding," Bradshaw said.