Animal Feeding Operations – An Overview

Background

Animal feeding operations (“AFOs”) are agricultural businesses and operations where animals are kept and raised in confined conditions. Animals found in these operations are used to produce dairy products, to lay eggs, or to be slaughtered. Rather than sending animals out to graze on farmland, feed is brought to the animals within these operations. This type of agricultural operation operates on a small area of land to perform its functions. The USDA’s Natural Resources Conservation Service (“NRCS”) estimates that there are approximately 450,000 AFOs within the United States.

According to the USDA’s Economic Research Service, animal products account for more than fifty percent of the value of U.S. agricultural products, exceeding $120 billion per year.  The animals and animal products produced in AFOs are a significant component of this $120 billion figure.

AFOs implicate several legal, economic, and policy issues including finance and credit, market concentration, production contracts, animal identification, animal welfare, the Packers and Stockyards Act (“PSA”), impacts on the environment, application of state and local zoning laws, and state nuisance laws.

Federal Regulatory Authority

In animal feeding operations, administrative agencies such as USDA/FDA/EPA have been given authority by Congress to create regulations implementing the requirements of the federal law.  In 2024, the Supreme Court of the United States issued two rulings that are expected to have a major impact on how judges decide cases challenging those regulations and that agency authority.

Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244 (2024) overruled the long-standing doctrine of deference established in Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984). Chevron deference was a two-step process that clarified how and when federal courts should defer to an agency regulation interpreting a statute.  Chevron only applied in situations where a court had determined that the statutory language the agency was interpreting was ambiguous.  If it was ambiguous, the court would consider whether the agency’s interpretation of the statutory language was “reasonable”.  If it was reasonable, the court was required to defer to the agency’s interpretation. If it was not, the court would overrule the interpretation.

Loper Bright formally overturned Chevron. In a 6-3 decision, the Supreme Court held that “courts may not defer to an agency interpretation of the law simply because a statute is ambiguous[.]” Following the ruling, courts are instead required to exercise independent judgment in determining whether an administrative agency has acted within its statutory authority.  Courts may still seek guidance from the agencies involved, but courts will no longer be required to defer to an agency’s interpretation of a statute.

In Corner Post, Inc. v. Bd. of Governors of the Fed. Rsrv. Sys., 144 S. Ct. 2440 (2024), the Supreme Court extended the period of time during which a party may file a lawsuit challenging federal agency actions. According to 28 U.S.C.S. § 2401(a), the six-year statute of limitations began to run when an administrative agency’s action was “final.”  In Corner Post, the Supreme Court ruled that an action becomes “final” when a plaintiff suffers an injury, rather than when a “final regulation” is released. This ruling expands the potential for plaintiffs to challenge federal agency rules and regulations that have been final for over six years.

While the full effect of these two rulings remains to be seen, it is highly likely that the agricultural industry will be impacted by the Supreme Court’s decisions. Importantly, the rulings fundamentally change how courts will resolve lawsuits challenging agency regulations for misinterpreting the agency’s statutory authority. Impacts are most likely to be felt in areas of the law, such as AFOs, dominated by statutes with relatively ambiguous language where Congress has relied on agency regulations to fill in specifics.

The Clean Water Act

The Clean Water Act (“CWA”) defines an “animal feeding operation” as a lot or facility other than an aquatic animal production facility where animals “have been, are, or will be stabled or confined and fed or maintained for a total of 45 days or more in any 12-month period.”  In addition, for a facility to be considered an AFO, crops, vegetation, forage growth, or post-harvest residues cannot be sustained in the normal growing season over any portion of the lot or facility.

The CWA is a central component of the regulation of animal feeding operations.  In particular, the CWA requires Concentrated Animal Feeding Operations (“CAFOs”) to obtain a National Pollutant Discharge Elimination System Permit (“NPDES”) for their “point source” discharges of pollutants into the waters of the United States. CAFOs are AFOs with more than 1,000 animal units. CAFOs are specifically governed by the “CAFO Rule” in the CWA. The CWA similarly applies to “concentrated aquatic animal production facilities.” The Environmental Protection Agency bears primary responsibility for implementing the CWA and its regulations.  For a broader discussion of the CWA, please visit the Clean Water Act Reading Room.

Other Applicable Laws

Other federal statutes also affect AFOs.  These include the Clean Air Act; the Comprehensive Environmental Response, Compensation and Liability Act; and the Emergency Planning and Community Right-to-Know Act.  Each of these federal statutes are accompanied by extensive implementing regulations.

State and local laws may also affect the operation of AFOs, including common law actions under nuisance, trespass, or negligence theories.  In addition, issues related to state and local land use provisions, zoning ordinances, and other such measures have also been raised in the AFO context.  For information concerning nuisance, land use, zoning ordinances, and related issues, please visit the Urban Encroachment Reading Room and the Landowner Liability Reading Room.

Production Contracts

AFOs typically operate under legal arrangements referred to as production contracts. The processor usually owns and supplies the animals raised by the producer.  The contracts require the animals to be raised in accordance with instructions specified in the contract.  For a more complete discussion of the legal issues surrounding production contracts, please visit the Production Contracts Reading Room.

USDA Natural Resources Conservation Service

The NRCS offers a Comprehensive Nutrient Management Plan (CNMP) for AFO and CAFO owners and operators. The goal of this program is to help owners and operators take voluntary steps to reduce the amount of air and water pollutants produced by the operations. The CNMP usually provides financial assistance to support practices that will protect natural resources.

Other Issue Areas

For information pertaining to the application of the Packers and Stockyards Act to AFOs, please visit the Packers and Stockyards Act Reading Room.  Additional information addressing the interrelationship between AFOs and the National Animal Identification System can be found in the Animal Identification Statutes Publication.  The Finance & Credit Reading Room contains resources related to financing issues applicable to AFOs.  For research and information related to the application of federal conservation programs such as the Environmental Quality Incentives Program (EQIP), please visit the Conservation Programs Reading Room.  Finally, for an overview of environmental laws in general, please see the Environmental Law Reading Room.

Farm System Reform Act

In 2019 and 2020, Senator Cory Booker (D-NJ) and Representative Ro Khanna (D-CA) introduced bills to create the Farm System Reform Act. The bills never made it past the introductory stage, but it was re-introduced in 2021 and 2023 in both the House and the Senate. The law would place an immediate moratorium on new and expanded CAFOs, require large CAFOs to stop operating as large CAFOs by 2040, and authorize a voluntary buyout program for AFO operators who want to transition to other activities. The bill has received both support and criticism from the agriculture industry. As of 2024, the Senate version had been referred to the Senate Committee on Agriculture, Nutrition, and Forestry, while the House version was referred to the House Subcommittee on Livestock, Dairy, and Poultry.