July 23, 2024

Prop 12 ruling ‘caught us by surprise’

After SCOTUS, Illinois pork producers face tough decisions

EUREKA, Ill. — Even though he was confident of the outcome, Chad Leman faced the unimaginable “what if” scenario.

“We had plenty of time to think about this in case it didn’t go our way,” said Leman, president of the Illinois Pork Producers Association.

For Leman’s farrow-to-finish swine farm, the potential consequences of Proposition 12 would be direct.

“We already made the decision on our farm that it wasn’t going to be feasible to change our barns around to become Prop 12 compliant,” said Leman. The decision was made even before Leman delivered a statement to the U.S. Supreme Court, on behalf of the National Pork Producers Council and their challenge to the 2018 California ballot initiative.

“I delivered a statement about the effect it would have on our sow farms,” Leman said.

Even though he had a plan in place, Leman said the Supreme Court’s 5-4 decision that upheld the 2018 California ballot initiative shocked him.

“I was really surprised by the ruling. We felt pretty confident that we were going to get a ruling in favor and that supported us. It caught us by surprise. It certainly was not what we hoped for,” he said.

On May 11, the Supreme Court upheld the 2018 California ballot initiative that bans the sale of pork, eggs and veal in the state unless the animals that produce those products have a defined amount of space. For pregnant sows, that is at least 24 square feet of usable floor space per pig. The National Pork Producers Council and other groups challenged the ballot initiative.

The justices voting in favor of upholding Proposition 12 were: Amy Coney Barrett, Neil Gorsuch, Elena Kagan, Sonia Sotomayor and Clarence Thomas. The justices dissenting were Samuel Alito, Jr., Ketanji Brown-Jackson, Brett Kavanaugh and Chief Justice John Roberts.

On top of the oncoming regulations, pork producers, already hit by profitability challenges, face a larger supply of pork on the market, which could drive the price they receive for their pigs lower.

“From a producer standpoint, there’s more pork on the market now that is going to need to be sold outside of California. They consume about 15% of our pork in this country. So now there’s going to be a considerable amount of pork on the market that is going to need to be exported or sold domestically outside of California. That’s going to have a negative price impact,” Leman said.

For now, as national and state pork associations begin to sort out the details of Proposition 12, Leman said he will be examining the market opportunities for pork outside of California.

“We are going to continue to operate as we have and continue to sell pork into whatever markets will accept the way we do it. There will be market opportunities for producers outside of these Prop 12 compliance issues and we will work to find them,” Leman said.

With construction of new swine facilities, including sow barns, having slowed in the last few years, Leman said those producers with older barns may be in the best position to comply with the new regulations.

“Siting facilities is very difficult. Coming out of COVID, we have serious labor shortages in our industry. With inflation, the cost of construction has been prohibitive to build any kind of a hog barn. So whether it’s a sow barn or a finishing barn, you had those headwinds against you. I think the sow farms that could probably have the best opportunity for becoming Prop 12 compliant would be older sow farms that were in need of renovation anyway,” said Leman.

Producers who are looking at becoming Proposition 12 compliant also face decisions about their pig numbers.

“If you took a sow farm operating under its current capacity and current square feet per pig, you would basically need to reduce the capacity by 30% in that barn to become Prop 12 compliant,” he said.

Leman said he expects other producers will find a way to make their farms compliant with the California regulations.

“There certainly will be opportunities going forward. I have no problem with other producers seeking market opportunities or premiums for how they raise their pigs — as long as they are allowed to do it voluntarily. What I have a problem with is involuntary enforcement to regulate the way we raise pigs in Illinois. That’s what it comes down to,” he said.

For Leman and other pork producers, the work of caring for their animals goes on, regardless of the Supreme Court decision.

“We know the practices we use on our farms are what’s best for our sows. We already knew that. Just because the Supreme Court ruled against us doesn’t change the fact that we believe what we are doing is best for our animals.”

Here are some reactions from other pork organizations:

Indiana

“We are very disappointed with the Supreme Court’s decison. Misguided regulations generated by one state, but applied nationally, place a strain on both pork farmers and consumers. That being said, the pork industry has dealt with regulatory policy wins and losses for decades. Pork farmers are committed to producing safe, affordable, high quality protein and have always found ways to do so in any regulatory environment. The level of difficulty in accomplishing that goal certainly went up because of this decision, but pork farmers are great at overcoming challenges.” -Josh Trenary, executive director, Indiana Pork, Indianapolis, Indiana.

Ohio

“Ohio’s pork-producing families have always, and will continue to, put the well-being of their animals at the top of their daily agenda. That’s why it’s unfortunate that the recent U.S. Supreme Court decision that upholds California’s Proposition 12 will not achieve better animal care. The enactment of this unscientific mandate, only approved by a contentious 5-4 opinion by the Court, will lead to multiple unfortunate outcomes — including much higher prices for pork for California’s millions of consumers. This decision opens a door for other misguided regulations that further take away more decision-making from our farmers who already face many threats from those who simply don’t have the expertise to know what’s best for consumers, livestock, and the environment. Despite this reality, Ohio’s producers are resilient and will continue to adapt to today’s ever-changing realities as they strive to produce high-quality, sustainable protein for the world’s consumers.” — Cheryl Day, executive vice president, Ohio Pork Council, New Albany, Ohio.

Iowa

“The health and safety of their pigs are a top priority for Iowa pig farmers, and we are frustrated to see the Supreme Court uphold Prop 12. This ruling sets a bad precedent, enabling other states to regulate commerce outside their boundaries. Consumers, especially low-income ones who rely on affordable nutritious pork to feed their families, will ultimately suffer due to higher food prices. Some small and medium-sized producers who are already dealing with high feed costs and inflation, will also sadly go out of business as they struggle to comply.” — Trish Cook, president, Iowa Pork Producers Association, and pig farmer from Winthrop, Iowa.

NPPC

“We are very disappointed with the Supreme Court’s opinion. Allowing state overreach will increase prices for consumers and drive small farms out of business, leading to more consolidation. We are still evaluating the Court’s full opinion to understand all the implications. NPPC will continue to fight for our nation’s pork farmers and American families against misguided regulations.” — Scott Hays, president, National Pork Producers Council, and pig farmer from Monroe City, Missouri.

Jeannine Otto

Jeannine Otto

Field Editor