Assessing the impact of California's Prop 12 on pork trade

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Can the production rules of one state wag the (curly) tail of pork trade for an entire country?

If the state is California, the answer is: it’s possible.

Prop 12, first passed in the state in 2018 and then upheld by the U.S. Supreme Court this week, sets out space requirements for livestock in production systems. In particular, the initiative requires that all pork sold in the state be produced through Prop-12 compliant production, where sows, for example, must have access to 24 sq ft of space and the ability to turn around, unobstructed.

Upholding the Farm Animal Confinement Initiative, or Prop 12, creates significant market uncertainty as of July 1, 2023, when it becomes law.

Stephen Heckbert, executive director of the Canadian Pork Council, says that it’s unclear how a state can create something like this law that essentially becomes a non-tariff trade barrier at a national level. Whether or not there will be trade implications for Canadian product isn’t clear, either.

Heckbert says he’s not sure how California plans to actually meet the certification or compliance bar they’ve set. Will the state be hiring inspectors to travel Canada and the U.S. to inspect processors and supply chains, he asks?

“Worst case scenario for California is they wake up July 1, and there’s no meat on the shelves. Worst case scenario, simply because producers and processors [may] not [be] able to certify Prop 12 compliance in a way that satisfies California [in time], and therefore there is no one who can sell meat products into California as of July 1,” he says.

The likelihood of bare shelves happening is low, but what’s not uncertain is how a bill such as Prop 12 will add costs to the entire pork value chain. That, in turn, will increase the cost of pork, he says. Changes to infrastructure, the added cost of administration, and paying for compliance oversight all has to be paid for somehow.

“I’m still in a little bit of shock that the decision of the Supreme Court went the way it did,” Heckbert says. “Interstate commerce and international commerce is really the purview of the Government of the United States. [This ruling means] that states can start to play in the interstate commerce world and start to impose regulations and rules on other states.”

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