The economics of factory farming

Factory farming is an economic model that treats animals as production units, not living beings. While this is true of all animal farming, in factory farming it reaches an extreme.

Factory farming depends on mass production to gain cost efficiency, making more products more cheaply in order to increase profit.

Aside from the harm done to animals, the hidden costs of industrially farmed animals are to consumers themselves, local communities and the environment. 


Efficiencies of production

Strategies to maximise efficiency and profit are found in every part of the factory farming business model:

  • Saving space by keeping animals in the smallest space possible, such as in a cage or crate
  • Low staffing requirements by using crates or cages and mechanisation
  • Selective breeding for faster growth and more productive animals.

Greater profits come from greater efficiencies; for example, birds that produce more eggs and fatter and faster-growing chickens and sows that produce more offspring.

Animals are manipulated physically, behaviourally, sexually and genetically - all to create greater efficiencies of production.


Factory farming is big business

Factory farming often leads to conglomeration, as the bigger the operation grows the more efficiencies of scale can be gained. For example, in the New Zealand egg industry, while the number of hens has grown over the last 20 years, the number of farms has dramatically decreased.

Today, a relatively small number of factory farming operations produce huge amounts of animal products. Just 40 farms produce 90% of our eggs. 

As larger companies have access to more investment they can take over smaller ones. This has other effects, such as the buying out of small family farms and the subsequent loss of rural communities.


Good for business

As prices go down, consumption goes up, which means more sales and greater profits. 

Extensive and widespread marketing also encourages greater consumption. For example, the consumption of chicken has doubled over last 20 years, as it has been promoted as a healthier and cheaper alternative to other kinds of meat.

How does society as a whole benefit from this drive for greater profits? Not at all. High consumption of fast food and highly processed food encourages poor diet and lifestyle habits, which everyone pays for through taxes that support an overloaded health system. Cheap takeaway foods are not really cheap in the long term.


Diversification of our economy is a better way

As long as New Zealand is in the animal business there will be a desire to continue growing production, increasing profits and upgrading operations. All this is at the expense of living animals.

Some economists see a danger of depending on the ‘primary industries' of animal agriculture and recommend that New Zealand diversify away from animal overproduction, developing other income streams that are more in harmony with our ‘clean, green, 100% pure' international brand.