Hog Farmers’ Catastrophic Costs to Implement Prop 12
By Michael Formica, Assistant Vice President and General Counsel for NPPC
U.S. hog farmers are eagerly anticipating a mid-summer federal appeals court ruling on arbitrary animal housing standards being imposed on farms across the country next year, driving up costs for both pork producers and consumers.
California’s Proposition 12, set to go into effect on Jan. 1, 2022, bans the sale of pork from the offspring of sows kept in individual stalls that do not meet its prescribed dimensions. California’s production standards were developed without the input of hog farmers, veterinarians, and others with expertise in animal care, food safety and other elements of pork production.
For these reasons, the National Pork Producers Council (NPPC) and the American Farm Bureau Federation (AFBF) are suing the state of California. In oral arguments before the U.S. Court of Appeals for the Ninth Circuit in April, NPPC and AFBF asked the court to strike down Proposition 12 as unconstitutional. A court ruling is expected shortly.
Proposition 12 applies to any uncooked pork sold in California, whether raised there or outside the state’s borders. Since California has very little hog production within its borders, the burden of Proposition 12’s compliance will be imposed almost entirely on out-of-state producers. According to a recent Rabobank analysis, less than four percent of current pork production can comply with the law. A state that lacks any meaningful hog production is seeking to regulate how farmers across the country operate, imposing onerous regulations, inspection and permitting requirements, and highly prescriptive measures on pork producers.
California, with nearly 40 million residents, represents approximately 15% of the U.S. pork market. The state has large Latino and Asian populations, both of which have long-standing cultural preferences for pork. Proposition 12 will dramatically reduce the supply of pork for Californians, driving up prices for consumers and disproportionately affecting low-income households.
Meantime, hog farmers are going to be forced to incur the costs of extensive renovations or the construction of new facilities – currently estimated at $3,500 or more per sow, according to a recent analysis by Dr. Barry Goodwin, an economist with North Carolina State University. The ones least able to bear that cost will be small family farms. As Goodwin explained, “[O]ne important outcome of Proposition 12 will be an increase in the exit of smaller hog operations. The pork industry will become more concentrated, with fewer, but bigger farm operations. The stresses placed upon the entire production and marketing chain will also favor larger processors, thereby leading to ever-increasing consolidation and concentration of the industry.”
In a recent letter to USDA Secretary Tom Vilsack, NPPC shared a copy of Goodwin’s analysis and warned of hog farmers’ “catastrophic” costs to implement Proposition 12. “The implementation of Proposition 12 will cause irreparable harm to U.S. hog farms and the entire pork supply chain. The unfortunate irony is that Proposition 12 does absolutely nothing to improve animal health or food safety, and it jeopardizes on farm worker well-being,” the letter noted. The letter urged the immediate assistance of USDA and the Biden administration to help hog farmers address the harm caused by Proposition 12.
The tremendous uncertainty surrounding Proposition 12 has put U.S. pork producers in a very challenging position.
Meantime, California’s Department of Food and Agriculture only recently issued its proposed regulations for implementing Proposition 12, even though the rules were supposed to be finalized by Sept. 1, 2019. NPPC plans to submit comments by the July 12 deadline, highlighting the significant damage this rule will inflict on pork producers and consumers.
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:
Proposition 12 Pressures Aren’t Going Away
Pork Industry Braces for Catastrophic Costs to Implement Proposition 12
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
