The uncertainty surrounding Proposition 12 right now has put all U.S. producers in a challenging position, said National Pork Producers Council (NPPC) president Jen Sorenson of West Des Moines, Iowa, during a recent media briefing following NPPC’S Legislative Action Conference.
Despite discussion of trade, foreign animal disease and labor, the majority of questions centered around Proposition 12 (Prop 12) because of that uncertainty. The questions are still outpacing the answers.
“It will cost producers, individual producers, millions of dollars to make these changes and the ones least able to bear that cost will be small family farms. Loss of this market will put many farmers out of business and ultimately lead to further industry consolidation,” Sorenson said. “We’re in a space where we don’t have clarity, the risk is tremendous, the financial burden is tremendous.”
Pork producers won’t be the only ones hurt by Prop 12, said Michael Formica, NPPC assistant vice president and general counsel. Residents of California are going to be hurt, too. The state has the highest number of people in any state living under the poverty level.
“We’re coming out of this horrific COVID crisis, the economy’s in shambles and Prop 12 is going to remove the protein of choice for 55% to 60% of California residents as a low-cost option. The pork that they will have is going to be significantly more expensive there. Prop 12 will hurt and is hurting hog farmers, but Prop 12 is also going to hurt moms and children and families living in California,” Formica said.
A Waiting Game
NPPC is challenging Prop 12 in court. Oral arguments took place on April 14 before the Ninth Circuit Court of Appeals. Formica said he is cautiously optimistic waiting for how those resolve.
“We’ve also been deeply engaged with the state of California trying to help educate them about the hurdles Prop 12 causes for pork producers, and weigh in with them on what is and isn’t feasible for pork producers to change on their farm,” he said.
California was supposed to release a final regulation in September 2019, clarifying many of these questions. More than a year and a half later, no final regulation has been announced. This lack of communication is causing many logistical challenges for the entire supply chain.
“Our position has never been that all regulation is bad – of course not. But we’re for science-based, commercially reasonable regulation,” said Nick Giordano, NPPC vice president and counsel for global government affairs.
Unfortunately, the smaller producers will have a harder time than the “big folks” complying with Proposition 12. Although most regulation is well-meaning, there are many issues where this dynamic that the strong survive holds true. Policymakers are trying to drive more competition and create more opportunity, but often “it’s the strong, the big, the moneyed, that are able to foot the bill of compliance,” Giordano said.
At What Cost?
Terry Wolters, NPPC president-elect and a Minnesota pork producer, said one of his frustrations with Prop 12 is that even though some producers won’t completely have to rebuild and may be able to retrofit their facilities to become Prop 12 compliant, they are also going to be increasing their carbon footprint another 25%.
“Building costs and materials are in the neighborhood of 30% and 40% higher than they were,” Wolters added. “I know of several projects that have been put on hold because they can’t access the materials to even do projects.”
The other part that is challenging about this proposition, Wolters said, is that the pork industry doesn’t just sell whole hogs to the state of California.
“We sell parts and pieces of a pig all over the country, all over the globe. We don’t just send a specific number of pigs to California. They consume 14% or 15% of the product, but they don’t take them in full pigs,” Wolters said. “So, it is an interesting dynamic that pieces of the pigs will have to be sold at a discount in the event we can get a premium for the pigs or parts that go to California. It does create a very complex dynamic in the food chain.”
And as NPPC CEO Neil Dierks pointed out, all of these things are being said amidst no clear regulatory framework to date.
What’s Best for Pigs and People?
Formica said the devil is in the details when it comes to ballot initiatives like these.
“We don’t want animals to be treated cruelly, producers don’t want them to be treated cruelly. But do voters know what that means? Do they know if the actions that they’re asking for are actually in the best interest of that animal?” Formica asked.
Wolters added the misconception that some California voters have shared that pork production practices are based on what’s cheaper, couldn’t be further from the truth.
“We have designed and built facilities that are extremely convenient to the animal and to the animals’ livelihood. We’ve nearly put out 30% more pigs out of a sow today on an annual basis than we did 20 years ago. That doesn’t happen because we don’t take care of our animals,” he said. “That couldn’t be farther from the truth.”
Wolters said the part nobody seems to want to talk about is worker safety on U.S. pig farms.
“When you have animals loose in pens, and watch them fight, worker safety and animal safety is top of mind for us. So, to say we don’t care, that rips my heart out,” Wolters said.
Watch Farm Journal’s PORK’s webinar on Proposition 12: Where Do We Go From Here? that delves into regulation and compliance, economics and more.
Read More:
Proposition 12 Pressures Aren’t Going Away
On-Demand Webinar: Proposition 12: Where Do We Go From Here?
20 States Back Challenge to the Constitutionality of California’s Prop 12
California’s Proposition 12 Would Cost U.S. Pork Industry Billions
