National Pork Producers Council (NPPC) reports:
What happened: After being in effect a little more than six months, California’s Proposition 12, requiring pork sold in the state to be from hogs born to sows raised in housing that meets specific space standards, already has raised pork prices for California consumers and decreased pork sales volumes in the state, according to data compiled by economists with the U.S. Department of Agriculture’s Office of the Chief Economist (OCE).
The OCE economists found prices for pork products affected by Prop. 12, including loins, ribs, and bellies, have seen an average 20% price increase in California since before July 1, 2023 – when the initiative was partially implemented – with loin prices averaging 41% higher than before Prop. 12 implementation. Pork not covered by the initiative has not seen a significant increase. The paper’s authors also pointed out that California’s share of fresh pork consumption has “significantly declined.”
Looking at wholesale pork sales data, the economists found Prop. 12-compliant products accounted for just 2-4% of total pork sales in the United States, short of the state’s typical demand for covered products, which is expected to account for 5-6% of total production. OCE also found the price premium end-users paid for Prop. 12-compliant pork compared with non-compliant products at the wholesale level was 22% higher on average, with compliant loins and bellies 30% higher.
NPPC’s take: NPPC has fought against California Prop. 12 since 2018, when it was put on the state’s ballot for approval, arguing among other things that it would increase consumer prices for pork. Along with the American Farm Bureau Federation, NPPC even challenged Prop. 12 in federal courts, including the U.S. Supreme Court. NPPC continues to work with members of Congress on a solution to the problems created by the law.
Why it matters: If pork producers want to continue selling products into the large California market, they must comply with Prop. 12. But for most producers, that means retrofitting existing barns or building new ones, a financial cost many cannot afford given the losses producers had – $30 per market hog on average – in 2023. Also, if Prop. 12 is allowed to stand, other states may approve similar laws, creating a patchwork of regulations across the country.
