AgriTalk: CDFA Releases Proposed Rules for Proposition 12
Before long, Proposition 12 will impact hog producers all across the country not just in California, said AgriTalk host Chip Flory on Thursday. Flory was joined by Michael Formica, assistant vice president and general counsel for the National Pork Producers Council (NPPC), and Jennifer Shike, editor of Farm Journal’s PORK.
“On May 28, the California Department of Food and Ag released its proposed rules for implementing Proposition 12. Those rules were supposed to be finalized by September 1, 2019, so the release of these proposed rules has been a long time coming,” Shike said.
What’s Ahead for Prop 12?
After seeing the proposed rules, Shike asked Formica if he saw any surprises in the proposed rules.
“There's a lot to unpack in those rules,” Formica said. “The rules are not just the rules themselves, but as with any proposal, it's the preambles, their statements of what's before them and the reasons for undertaking that.”
Because NPPC is in litigation challenging Prop 12, he said he can’t talk specifics.
“There were more than a few eye-opening factoids that we saw, admissions if you will, from California that we don't disagree with,” Formica pointed out.
There are two court cases currently pending on Proposition 12, he explained. NPPC’s recently had arguments before the Ninth Circuit Court of Appeals. He said they hope to get a decision by mid-July.
“We're feeling cautiously optimistic about our chances there. We've challenged Prop 12 solely as it's applied to the pork industry,” Formica said. “There is another case that's ongoing, which was filed by the North American Meat Institute representing packers and processors. Their case challenges Prop 12 with regard to both pork as well as veal.”
He expects the Supreme Court to make a decision by the end of June. If that case is taken, briefing will take place in the fall, arguments in the fall and a decision sometime next year.
“Neither one of these cases are going to be resolved before 2022 before that implementation date. So, it's a game of chicken. Who's going to blink first?” Formica said.
What Will Prop 12 Cost the Pork Industry?
According to a Rabobank report, Formica said as Prop 12 is implemented, there's going to be a bifurcation or division of the industry.
“You're going to have pork destined for California, which is 15% of the U.S. market, that's not going to be able to be sold in California. There's going to be really high price spikes in California for pork, and all that pork will end up on the U.S. market – flooding it,” he said.
It will likely be a situation where there will be a surplus of pork for consumers, but pork producers who are still struggling over the havoc caused by COVID-19 will see markets crashing, he said.
Listen to the full segment from AgriTalk here:
Watch Farm Journal's PORK's webinar with industry experts Hyatt Frobose of Gestal, Christine McCracken of Rabobank and William J. Friedman of EarthClaims LLC, weigh in on California’s animal welfare regulation, Proposition 12, from an economic, production and compliance perspective.
Read more here:
Pork Industry Braces for Catastrophic Costs to Implement Proposition 12
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