Prop 12 looms over pork industry

Aug 27, 2021  | 2 min  | Ep4702

The food industry was forced in real-time to change distribution and destinations of many products at the start of the pandemic.

The hog industry is working on a logistics problem of its own as the enactment of a California law passed four years ago approaches.

Here’s Peter Tubbs. Producer Contact:

Having survived another court challenge, California’s Proposition 12 appears more likely to influence every pork producer and consumer in America.
This week, the United States Federal Court for Northern District of Iowa ruled against the Iowa Pork Producers Association in their challenge of Proposition 12. The ballot measure passed in 2018 with two-thirds of the vote.

In a plaintiffs issued this statement, in part:
“The Iowa Pork Producers Association and the individual farmer plaintiffs ... do not agree with the court’s ruling...IPPA and the individual producer plaintiffs are evaluating what steps may be taken in response to the ruling.”

The measure installs minimum space requirements in the raising of all pork, eggs and veal sold in the state of California beginning in January of 2022. The space requirements for hog farrowing, egg laying and veal confinement operations are significantly higher than current practices.  

Analysts believe the Prop 12 rules could create two different pork markets in the United States, one with high prices in California and low prices in the rest of the country.
Consuming up to 15 percent of America’s pork production annually, California could find itself unable to source enough Prop 12 compliant pork to fill customer’s plates. 
Unable to ship to the country's largest state, pork producers may create a glut of hogs that will fill the freezers of the nation's pork processing companies. With an estimated 4 percent of hog farrowing operations in compliance with Prop 12 rules, the industry would require several years to bring the binary markets back into balance. Some analysts believe the entire U.S. pork industry will have to adapt to Prop 12’s rules rather than run two separate supply chains.
Proposition 12 goes into effect on January 1, 2022. 
For Market to Market, I’m Peter Tubbs.


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