It’s been eight months since California’s Prop 12 took effect, and pork producers around the U.S. are feeling the effects.
Holly Cook, Economist with the National Pork Producers Council, says it has been a costly transition for producers.
“So, from a production standpoint, we know that Prop 12 can be very expensive for producers to undertake. There’s been a few studies done with data collected from those in the building industry and those that have decided to make adjustments on their farms, which shows that new construction for Prop 12 can be anywhere from $3,600 to $4,000 per sow,” she said. “There’s ways also to convert existing operations, but then we run into maybe losing production having to reduce the number of animals and so no matter kind of what way we slice it, it looks to be very expensive.”
She said that expense ends up costing consumers.
“There’s been data that’s come out of the retail channels in California. USDA economists recently compiled it and put out a report showing that retail prices are up twenty to forty percent for covered pork products in California,” Cook explained.
Cook said some pork producers won’t be able to make the changes at all.
“For this to make economic sense, producers generally need a pretty large premium to offset those added costs. And some of these costs can be ongoing if they’re production related and we’re losing efficiencies with some of the management of this style of farming. So as far as how long this will last, it’s really uncertain,” she said.
She pointed out the industry may have more changes ahead.
“What we do know is that we’re in a bit of a vulnerable state here. We have uncertainty. If other states choose to adopt some similar regulations or even different regulations that are going to require more from producers or maybe conflict with the current standards set by California for their market, that could be even more expensive and challenging.”
