Has the costly impact of Proposition 12 reached California consumers? A new study out of the USDA Chief Economist’s Office suggests it has.
On July 1, California’s Proposition 12, which sets production standards for pork sold in California, officially went into effect. In late June, a California judge extended the time for non-compliant pork that was already in the supply chain before July 1 to continue to be sold in the California market until December 31.
From both a price and volume purchased standpoint, the numbers don’t look good for California pork sales. Not only have prices jumped considerably for fresh pork, the study shows volume purchased dropped drastically, too.
Using Circana scanner-level retail data from California grocery retailers, PhD student Hannah Hawkins of Texas A&M University, has been digging into this data during her internship at USDA. She told AgriTalk’s Chip Flory that she is focusing primarily on the fresh data, particularly pork loin and pork ribs, because those are the two most consumed fresh pork products in California.
“We saw a pretty significant impact on those average sales prices,” she explained. “For pork loin, we saw prices were up 43% in August compared to prices in June, and pork rib prices were also up 25% in August compared to June. For the other pork products that were included in that dataset, we generally saw some price increases, just not as significant as those main products.”
She also studied ground pork price data as well as other pork products not covered under Proposition 12.
“We did not see nearly as significant price changes for those products that are not covered under Prop 12,” Hawkins said.
That’s a key piece of information, Flory pointed out. Hawkins said data shows those price increases aren’t being seen throughout the rest of the country.
“For pork ribs, we actually saw only a 6% increase, and pork loin was 5% lower over that same time period,” she added.
Although the study didn’t evaluate whether pork products were being sold in a way that California consumers desire, she did study the volume purchased and noted a large decrease in the volume sold.
“The volume of pork purchased was down 23% from June to August in California,” Hawkins said. “That volume is 37% lower than the average volume that was sold in California in August from 2020 to 2022.”
She confirmed Flory’s assessment that she can’t confirm if the decrease in pork purchases was driven by price or by availability.
“This is fascinating,” Flory said. “I don’t think consumers had a clue what was coming their way.”
Davis Michelson, co-host of AgriTalk, agreed and said this directly reflects the disconnect between the urban and rural landscape today.
“We grew up understanding how this works out here,” Michelson said. “If you make it more expensive to raise hogs, the pork is going to be more expensive. But many consumers today don’t have the perspective that we do from growing up in that system.”
Read more about the latest in Proposition 12 here.
