(AP) — Premium Standard Farms spent $40 million over the last decade developing technology after a court ordered it to sharply reduce odors at its Missouri farms, but a looming deadline is threatening another costly lawsuit.
A panel of experts recently approved a barn-scraper system that met goals established under a 1999 court settlement with environmental groups to develop "next-generation technology." But the deadline to implement the system is July 31, and the company — which said it had little success developing the technology until now — needs another two years to get the system in place.
Missing the deadline would allow the state to sue, and the Missouri attorney general's office said July 31 remains its target. The deadline has already been pushed back once.
"It's going to take some time, and people need to be aware of that," Premium Standard President Bill Homann said.
The Princeton, Mo.-based company employs about 1,100 people in the state, mostly in economically depressed communities in northern Missouri. It has roughly 97,000 sows that are expected to produce about 1.8 million market hogs this year.
An expert panel established by the court approved biofilters as next-generation technology in 2008, but Premium Standard called them ineffective and too costly to install at its dozens of farms in northern Missouri.
The three-member expert team turned down all of the company's other plans until April, when it determined the criteria also was met by a system that would use giant scrapers to push manure into gutters, where it would be removed from the barn and trucked away.
The method would replace current systems that use water to flush hog manure from barns and into big lagoons for treatment.
But the panel's decision came barely three months before Premium Standard's deadline to have new technology implemented.
The Missouri attorney general's office must now decide whether to grant Premium Standard another extension or to file a lawsuit against the company. In 2004, the original deadline for compliance, the target date was pushed back to July, 2010.
"Discussions between the parties are ongoing," Attorney General Chris Koster's spokeswoman Nancy Gonder said. "There has not been a resolution. The July 31 deadline remains our target."
But it could get tricky. Premium Standard officials warned in March that the company's Missouri operations could be moved elsewhere after a Jackson County jury awarded 15 plaintiffs more than $11 million in a nuisance lawsuit. Many other lawsuits are pending.
At a mid-March meeting that packed a junior college gymnasium in Trenton, Premium Standard supporters pleaded with the expert panel to look favorably upon the company's latest odor-management proposals.
"Finally we have found a solution amiable to both sides," Homann said Thursday. "We can go back and say the missing link was barn odor control technology. Now it's up to the attorney general's office to agree or offer alternatives."
But the Citizens Legal Environmental Action Network, or CLEAN, has urged the attorney general to stand firm on the deadline.
CLEAN was part of the original lawsuit against Premium Standard and its affiliate, Continental Grain Co., that led to the 1999 court decree and another in 2004 that extended the deadline to 2010.
"CLEAN is frustrated that after a decade of effort PSF's view of next-generation technology to reduce barn odor is about as old-fashioned as a pitchfork," said Rolf Christen, an officer in the group. "We are interested in seeing whether PSF implements the scrapers it is championing on paper and whether the scrapers make a difference in our lives."
Charlie Speer, a Kansas City attorney who has more than 200 lawsuits pending in Missouri courts against Premium Standard, doesn't think the new technology will do anything to alleviate odors at the company's mega-confinements.
"It won't surprise me if nothing's done for five years, and at the end of five years they will say 'let us look at it again' and ask for five more years," said Speer, one of the lead attorneys for plaintiffs in the lawsuit earlier this year.
He criticized Premium Standard's efforts to control odors and likened the farms' waste treatment to "engineering 101."
"It's cheaper to study a problem than to fix it," Speer said. "When the odors stop, the lawsuits will stop."
Homann said the barn scraper system will cost $7.5 million to implement at a time when Premium Standard and its parent company, Virginia-based Smithfield Foods Inc., have been hit hard by the economy and last year's swine flu scare.
Though experts say the U.S. pork industry is showing signs of turning around, producers have lost money in 27 of the last 29 months and their future relies heavily on the country's shaky economic recovery.
"We're making money in the hog industry again," said Ron Plain, an agriculture economics professor at the University of Missouri. "If the economy can continue to improve and generate economic growth, it is probably going to last for a while.
"If, on the other hand, things don't improve in the overall general economy, we'll probably slide back into red ink this fall."
Copyright 2010 The Associated Press.