Pandemic Profiteering: How Corporations Are Capitalizing on the Crisis

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Food SystemClimate and Energy

by Peter Hart and Mia DiFelice
Editor’s Note: This content originally appeared on Food & Water Action’s website (our affiliated organization) at an earlier date.

From the beginning of the COVID crisis, corporate oligarchs manipulated markets to maximize profits. The giants that control the meat industry stoked bogus fears of a shortage to jack up prices on consumers — with lies so egregious that we filed suit against one of the worst offenders, pork giant Smithfield.

Of course, the problems mounted. Inflation spiked across the economy. Shops swung between long waits and huge shortages. Big companies blamed supply chain shocks and increasing production costs, which were certainly part of it.

But when a handful of corporations control markets, they can essentially name their price — and shovel obscene profits to CEOs and Wall Street speculators.

Oil Companies Are Winning

The squeeze on working families intensified with the Russian invasion of Ukraine. Suddenly, global dependence on fossil fuels reached a breaking point. U.S. gasoline prices soared while gas supplies to Europe plunged into chaos. 

In response, politicians and their media enablers demanded a dramatic increase in fracking. But energy giants quietly rebuffed these drilling demands. Not for any new concern for the environment — but rather because they are pulling in billions in record profits. Twisted market logic meant that limiting supply would pay off for their Wall Street investors.

From January to March this year, CEOs of eight fossil fuel corporations saw their share values grow by nearly $100 million. Windfall profits have not resulted in lower prices or better conditions for workers. Instead, these CEOs sold their shares for millions of personal profit.

The horror in Ukraine has created a new global energy crisis. Unfortunately, too many political leaders are clinging to the wrong solution. They want to “fix” a fossil fuel crisis by pushing more fossil fuels. That political support has given frackers a license to spring for long-term gas export terminals. American company EQT even called their mega-polluting gas export scheme “the Largest Green Initiative On the Planet.”

As a result, 25 new LNG projects are currently underway in our country. Fossil fuel companies are not only profiteering from today’s misery — they’re locking us into decades of pollution and emissions. We can’t let this continue. The International Energy Agency warned just last year that fossil fuel production must stop growing immediately if we’re to avoid the worst effects of climate change. 

Cornering the Market at The Supermarket

At the start of the pandemic, broadcasts and news feeds were fixated on one recurring image: empty grocery store shelves. Periodic shortages kept some consumers on our toes, while many were simply forced to go without.

As with oil and gas, we face giant corporations that would rather gobble profits than prioritize the needs of families. Over the course of the pandemic, we’ve seen the cost of meat rise while small farmers’ and ranchers’ profits fell. While COVID ran rampant, we saw corporations limit hazard pay for workers, while investing in stock buybacks to line the pockets of executives.

The meat industry is one of the core players in this problem. A mere four corporations process 85% of all beef and 70% of pork in the U.S. This extreme concentration gives these companies the power to control supply chains, prices and wages. Experts suspect they’re using inflation and supply chain problems as a cover to boost profits. In fact, net profit margins for those top four companies are up over 300%.

Plus, lean supply chains in any industry are dangerous for crises. With one disaster, a few broken links send huge ripples throughout a system without the backups and resilience to recover. For example, a COVID outbreak in a single Smithfield hog plant took out 5 percent of the nation’s hog processing capacity. 

Corporations Are Selling Us Misery

It’s never been clearer: When the essentials for life itself are controlled by corporate cartels, the future of our communities, our families and our planet are at their mercy. For decades, corporate America has told us that bigger is better, that consolidation would lower prices and eliminate inefficiencies. 

We know this is a lie. 

The latest heartbreaking example: the wealthiest nation on Earth is running out of baby formula because of problems at a single factory, thanks to a market controlled by four corporations.

At Food & Water Watch, we know that these problems have solutions. That’s why we’re fighting to break up the grocery cartels and stop corporate water profiteers. It’s why we’re demanding an end to the polluting factory farms that harm communities and farmers. Why we fight on the ground across the country to stop the fossil fuel projects driving the climate emergency. In an era of compounding crises, we must fight to transform the present and protect the future.

We can’t fight Corporate America without you.

How Biogas Factories Could Put Our Lowest State Underwater

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Climate and Energy

by Greg Layton

We know we’re running out of time on climate change. Without a rapid drawdown on fossil fuels, catastrophic effects of global warming will become unavoidable. But in Delaware, the poultry industry and its allies are going in the opposite direction. They’re promoting a new fuel: methane derived from poultry waste. Rather than reduce emissions, biogas will only worsen the climate effects, like sea-level rise, for our country’s lowest-lying state.

Biogas Will Lock in Climate-Warming Emissions

Plans to extract methane from poultry waste in Sussex County threaten to add to  greenhouse gas emissions for years to come.

Delaware currently faces two proposed projects, one by Bioenergy DevCo and one by CleanBay Renewables. These projects would release massive amounts of methane, the greenhouse gas 90 times more potent than carbon dioxide. Emissions from the Bioenergy DevCo project alone would have the same per-year climate impact of a typical car driving almost 100 million miles

Poultry waste itself doesn’t emit significant amounts of methane. However, the biogas projects planned for Delaware deliberately create new greenhouse gases to “capture” for profit. To do that, they need to haul in factory farm waste from around the tri-state area. All that means more emissions, to the tune of more than 20,000 diesel-powered truck trips per year. 

On top of that, it appears that the methane from Bioenergy DevCo would not be used instead of fracked gas; it would be used in addition to fracked gas. This will entrench fossil fuels in addition to factory farms, while allowing the industry to slap the “renewable” label on the same old climate-destroying gas system.

Without serious climate action, here’s what Delawareans can expect.

Hotter Weather

The average temperature in Delaware has risen about 2.5 degrees Fahrenheit since 1895. Within 50 to 60 years, scientists expect the state’s average temperature to exceed its preindustrial average by more than 4 degrees. Extremely hot days will likely also increase. Currently, Delawareans experience an average of two days over 100 degrees each year, but scientists predict we’ll experience as many as 28 days above 100 degrees by 2100. Heat waves are already the leading weather-related cause of death in the United States, and climate change will only make them worse.

Sea-Level Rise

Melting polar ice sheets have caused the world’s oceans and bays to rise, and Delaware, already the lowest-lying state in the nation, is sinking at the same time. (In fact, sea level is rising at Bowers Beach, Del. faster than anywhere else on the East Coast.) Sea level along Delaware’s coasts has already risen more than one foot since 1900. With continued warming, Delaware’s coasts will likely disappear under anywhere from 16 to 48 inches in the next century.

Property Loss

If Delaware’s coastal sea levels rise even two feet, the state will lose about 8% of its land (a little over 110,000 acres) and nearly all of its protected wetlands.  Dozens — if not hundreds — of homes would be destroyed. Currently, about 22,000 Delawareans are at risk from coastal flooding, but that number could surpass 30,000 in just a few decades. Millions of dollars of damage are almost inevitable, and would be devastating to Delaware’s beachside tourism industry.

Pests and Disease 

Climate change will warm the state earlier in the year and bring more rain — and more puddles. This is like rolling out a welcome mat for mosquitos. Though already, researchers estimate that Delaware’s mosquito season has extended weeks beyond its historical average. And more mosquitoes means more opportunity for blood-borne diseases like Zika and West Nile Virus to spread. 

Ecological Mayhem

Finally, climate change will displace wildlife and their habitats. For instance, each spring, nearly a million migratory shorebirds feast on horseshoe crab eggs in tidal flats and beaches. But those tidal flats and beaches will likely disappear underwater. 

Additionally, rising sea levels will bring salt water further up rivers, eventually intruding into aquifers near the coast. Soils might become too salty for crops and trees that currently grow in low-lying areas. Upland, early warm weather could prompt many wildflowers and woodland plants to grow and blossom too soon for the migratory animals that feed on them. 

How You Can Fight Back

Ultimately, we must transition off of carbon-based fuels like methane as quickly as possible. Pursuing new sources is unconscionable. Delaware’s elected officials must instead urgently pursue real solutions to the climate crisis. Biogas has no part in that solution.

The companies behind the biogas scheme need state permits to go ahead with their dirty projects. Governor John Carney has the power to say NO to biogas. Use your voice to tell him that Delaware doesn’t need another source of greenhouse gas emissions.

Tell Governor Carney that Delaware is done with greenhouse gases.

Sussex County Council Approves Up to $60 Million in Bonds to Cover Bioenergy DevCo Costs

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Climate and Energy

Georgetown, DE — Today, the Sussex County Council voted to approve up to $60 million in Private Activity Bonds to cover construction and other costs associated with Bioenergy DevCo’s recently approved biogas scheme. The vote came one week after the Council voted to approve a conditional use permit for the industrial gas production facility to be sited near Seaford in an agricultural-residential zone, despite an outpouring of public opposition.

In order to build their massive gas production and refining project, Bioenergy DevCo will need to secure numerous state pollution permits. If permitted, this Sussex County factory farm gas facility will be the company’s first in Delaware and their fourth project in the United States since joining forces with Italy-based BTS Biogas to enter the US market. A portion of the $60 million in private activity bonds will be exempt from federal income taxes, meaning taxpayers will subsidize the start-up costs of the dirty gas facility, rather than go toward projects that directly benefit County residents. The site is located in a community where a third of the residents currently live below the poverty line. 

In response, Food & Water Watch Delaware Organizer Greg Layton issued the following statement:

“Today’s vote confirms one of our worst suspicions — that taxpayers will subsidize the cost of this polluting facility, all to assure venture capitalists a ready profit. The hundreds of residents who expressed public opposition to the biogas scheme should have been considered in the decision to issue the tax exempt bonds, which are limited in supply, to fund the very project they opposed. Governor Carney must stop this project in its tracks, and direct the Department of Natural Resources and Environmental Control to deny Bioenergy DevCo its pollution permits.”

Smithfield Claims To Be ‘Sustainable’ While Making Its Heavy Pollution Extra Profitable

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Food System

by Tyler Lobdell

We’ve all probably seen them, advertisements from corporate polluters that sound like they could have been written by an environmental protection group. This tactic, called greenwashing, has become all the rage with some of the biggest polluters to cover up their poisoning of the environment and harm to communities. And Smithfield Foods is a prime example, pushing an aggressive greenwashing campaign so that consumers will overlook that it is one of the biggest industrial polluters in the United States.

Instead of cleaning up its act by actually making its products without destroying the environment and health of those unlucky enough to live near its plants and the factory farms that raise its pigs, Smithfield is investing in slick tag lines and doubling down on its devastating factory farm model. Day in and day out Smithfield gets rich while spewing dangerous pollutants into our water, air, and soil. And now Smithfield is partnering with fossil fuel corporations to push factory farm “biogas” schemes to monetize its deliberate mismanagement of the nearly unfathomable amounts of waste it produces year after year. Factory farm biogas is a false solution that expands and entrenches the worst aspects of mega-factory farms and the dirty natural gas industry. But throughout Smithfield’s marketing — on its websites, social media accounts, and elsewhere — it tells consumers that its pork products are environmentally friendly and that it is a sustainability leader and climate champion. It’s grade-A greenwashing at its finest.

Not only is this deception bad for consumers and family farmers, it’s illegal. That’s why we’re calling on federal regulators to hold Smithfield accountable and put a stop to its false and misleading advertising.

Smithfield Is One of the Biggest Industrial Polluters, Making a Mockery of Its Sustainability Claims

Smithfield is one of the most harmful industrial polluters in the United States. It consistently puts profits over people and the environment, with factory farms and processing facilities throughout the country that rack up dozens of environmental violations every year. This is why Smithfield has been hit with tens of millions of dollars in damages as impacted communities have successfully taken the mega-polluter to court for causing conditions that make their homes nearly unlivable. The federal judges did not mince their words, recognizing that “interlocking dysfunctions” are characteristic of how Smithfield produces its products, and that the company willfully and wantonly harmed its neighbors to maximize profits.

Smithfield’s Claims About Factory Farm Biogas Are Quintessential Corporate Greenwashing

Smithfield’s latest scheme to hide its harm to public health and the climate is its promotion of anaerobic digesters to produce so-called “biogas.” These digesters are tanks or lagoons that create an oxygen-free environment where microbes eat part of Smithfield’s manure and emit a mixture of gases, mostly methane and carbon dioxide, that the digester captures. This factory farm biogas can then be refined and burned just like fossil natural gas. Far from showing a “longstanding commitment to sustainability,” as Smithfield claims, building new factory farms and entrenching its irresponsible waste mismanagement to extract biogas only perpetuates the myriad harms caused by its factory farm production model. In fact, Smithfield’s digesters can make its waste even more harmful to waterways than what it started with.

What Smithfield is really doing is doubling down on its legacy of extreme pollution, because its factory farm biogas scheme fundamentally depends on the worst parts of how it has chosen to produce its pork products on the cheap. Smithfield promotes digesters as reducing its methane emissions and producing “renewable” energy, but fails to mention that this methane is the direct result of Smithfield’s preferred waste management practice, where it liquifies enormous quantities of manure and stores it cheaply in rudimentary “lagoons” (pictured in the image above during a flood). In contrast, when animal manure breaks down naturally, on a pasture for example, it does not generate methane. Methane is a potent greenhouse gas that is 90 times more harmful to the climate than carbon dioxide over a 20-year time period. Simply put, Smithfield misleadingly tells consumers its pork is environmentally friendly and that it is a leader in sustainability because it is slapping a bandaid over the climate destroying pollution that it deliberately created in the first place. But we aren’t letting this deception go unanswered.

Taking the Smithfield Greenwashing Case to the Federal Trade Commission

Food & Water Watch and a coalition of environmental and sustainable, family farming groups* have filed a complaint with the Federal Trade Commission (“FTC”) calling for enforcement of federal law against Smithfield’s false and misleading marketing. Under the FTC Act, companies are prohibited from promoting their products in any way that is likely to mislead reasonable consumers. As our complaint makes clear, Smithfield’s sustainability marketing tells consumers that its pork products have environmental attributes that are in stark contrast to the reality of how Smithfield does business, duping them into buying its products.

This unfair and illegal practice not only harms consumers, but also harms truly sustainable family farmers who invest the time, effort, and money into producing products that actually match what conscientious consumers expect. By illegally marketing its products, Smithfield makes it nearly impossible for these honest producers to compete in the marketplace, and for consumers to tell the difference.

Smithfield reportedly brought in more than $11 billion in revenue in 2020, so it can afford to clean up its act and transition away from the factory farm model that takes such a tremendous toll on the environment and local communities. But instead, it has opted for false solutions like factory farm biogas so it can wring more money out of its dangerous and polluting production facilities.

Smithfield’s products are not “sustainable” or “environmentally friendly,” and the FTC must act to hold this mega-polluter accountable for lying to the public and its customers.

Your friends should know about this.

*Along with Food & Water Watch, the FTC complaint is joined by Cape Fear River Watch, Dakota Rural Action, Family Farm Action Alliance, Institute for Agriculture and Trade Policy, Iowa Citizens for Community Improvement, Missouri Rural Crisis Center, Pennsylvania Farmers Union, and Socially Responsible Agriculture Project.

6. WINNING REAL SOLUTIONS

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Food System

Winning real solutions

The change we need won’t happen by slapping a bandaid on the problems caused by corporations.

We were the first national org calling to ban factory farms — we’re closer than ever to winning. 

2.FACTORY FARMS MAKE US SICK

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Food System

Factory farms make us sick

The damage caused by factory farms is insidious and affects everyone.

Factory farms are responsible for a rise in antibiotic resistance.

The True Price of a $4.99 Rotisserie Chicken

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Food System

Forbes recently named Costco to its list of the top 10 Fortune 500 companies most loved by liberals. Maybe that’s because Costco CEO Craig Jelinek has championed important causes like a livable wage and company sponsored health benefits. The company’s starting pay is above the federal minimum wage—$13.00 per hour, and the average employee wage is $21 per hour. Nearly 88 percent of employees have company sponsored health benefits. At the height of the recession Costco actually gave raises to help struggling employees.

And yet, despite this commitment to social responsibility, Costco is about to venture into vertical integration and contract farming—a system that is the antithesis of fair. Why? Because Costco sells a lot of rotisserie chickens. So many, in fact, that they’re planning to build their very own chicken slaughterhouse in Fremont, Nebraska where they will slaughter 85 million chickens annually—or about 1.7 million per week. Where will the chickens come from?

Factory farms. And they’re planning to sign up farmers under a contract growing system.

What’s wrong with this? Well, where do we begin…

As Nebraska Communities United points out, this is not your grandparent’s farm. In a system of vertical integration (how the vast majority of chicken is produced in the U.S.) the “integrator” (usually a company like Tyson or Perdue) delivers the chicks and feed and dictates farm operations through a contract. They often require the growers to build and continually upgrade expensive barns to keep obtaining contracts. Farmers generally take out loans lasting more than a decade to pay for this expensive infrastructure, but the contracts are often flock-to-flock, meaning a grower only has guarantee of income for six or seven weeks at a time. The poultry sector is less like a free market than abject serfdom. Contracts are often unfair or abusive and farmers often have no legal recourse against integrators as John Oliver helped expose in this scathing piece on the poultry industry.

Factory farms like the 100 farms Costco plans to have raise its birds also produce a lot of waste which is spread on farmland at levels far exceeding what is needed to fertilize crops. The contract farms are likely to be constructed upstream from the cities of Lincoln and Omaha—and their drinking water supplies. But evidence of the problems factory farms pose isn’t hard to find. Next door in Iowa, the Des Moines Water Works is in a years-long struggle to treat its water for nitrites discharged from the thousands of factory hog farms in counties upstream. And the city of Tulsa, Oklahoma sued upstream chicken producers in Arkansas for polluting its water, resulting in a legal battle that lasted for years.

Since lots of factory farms are exempt from permitting that would protect communities from waste, pollution often runs unchecked into nearby waterways—where it becomes a costly source of contamination in our drinking water supplies. Cheaper rotisserie chicken just simply isn’t worth the cost of healthy drinking water for hundreds of thousands of people.

We’ve seen this again and again: Corporations, even ones that try to do well by consumers, workers and the environment, fall down when it comes to sourcing their products. But if Costco wants to live up to its progressive bona fides, factory farming isn’t the way to do it.

Ultimately, we need to call on our elected officials to do their jobs: protecting the public’s health. The Lincoln City Council and the mayor need to take action to stop this slaughterhouse, and the City of Omaha should take a hard look at these issues as well—sooner rather than later.